Health System Management

Health System Management Essay Sample


There has been increased argument on whether the term managed care in essence describes the new generation of health care delivery and financing mechanisms (Kongstvedt 2007, Pp.21). Those arguing about the subjects do wonder if it is the individuals’ medical care that is being managed or if the organization simply manages the composition of the provider delivery systems. This kind of negative perception about the term-managed care has made many people in   the health care industry not to use the term.


            Many of the federal specialist services require authorization, hospitalization, and many other procedures. A higher authorization system requires a greater ability to manage the utilization. Authorization on its own cannot manage utilization; the management has to be involved for some procedure of authorization to take place. Therefore, there is need for a provision of such events to be accommodated for.

            “Authorization also implies that it is the PCP that authorizes coverage (subject to the service actually being a covered benefit), where as precerntification implies that it is the health plans that authorizes coverage”. (Kongstvedt, 2007, pp 201).

Most of the time, the treating physicians have been using the authorization to manipulate the reimbursement that was redeemed necessary for their patients. There are certain procedures that allows for authorization to take place. For instance, the PCP has to give authorization that entails referral specialists, and hospitalization, and other procedures. But the PPO’s and all other types of MCO’s that do not fall under HMO’s do not require any authorization to see a specialist, but can use differential copay so that they can encourage members to access the PCPs preferentially (Kongstvedt 2007, pp 201).

Prospective – this is where the authorization is issued before giving the service, it is commonly used in plans that need prior authorization for effective services (Kongstvedt 2007).  A more prospective authorization requires more hospital management involvement to intervene where necessary.  A manager should be able to understand all other authorization so that he cannot undertake a prospective authorization that is under other methods.

Concurrent authority goes hand in hand with the time the service is rendered.  Such cases include for instance emergences that cannot wait for authorization to be undertaken.

This method allows for timely data gathering and anything that can affect the outcome, but does not give room for the manager to intervene at the initial stages of decision-making. This can either cause a situation that the care is not properly delivered or if delivered, it will be in a mode that is not cost effective. Concurrent systems helped improve cash in hospitals immediately a patient was discharged. The system kept more accurate data hence improved revenue.  It was also able to remove the barriers that could lead to cost effectiveness and high standard of quality for the patient while still admitted. Furthermore, it was very useful as it can help the management to identify patients, who are most resourceful immediately after admission

Retrospective takes time after the fact. For instance, a case that a hospital admits treats and discharges patients without the management’s knowledge. In the case, authorization for payment may be denied or reduced. The problem with retrogressive authorization is when a manager thinks that this kind of authorization is to be given at cases of emergency only, but some cases can lead to retrospective authorization, e.g. when the participating providers do not cooperate.

Pended-this is a kind of authorization in purgatory. This occurs when a situation is not known if it will be authorized or not, hence is left pending.

Denial refers to a case whereby authorization is bound to fail or not forthcoming.

There are some claims that can come into the plan without authorization but still be paid.  In health maintenance organization (HMO) denial will imply that there is no payment to be made but in preferred provider organization(PPO) ,payment may be made (though not always) but at a lower coverage if felt that the service is still of medical necessity or payment may be denied completely if the service is considered medically unnecessary.

In the cases that for instance involves preventive measures and the involved party (provider) is not approved, there can be denial, regardless to whether they were ordered by PCP (primary care physicians)

Sub authorization.  This category is very important as it allows one authorization to hitchhike another (Kongstvedt, 2007). it is mostly of hospital based professional services.  For instance in the HMO case, a referral specialize may use authorization to diagnose or give therapeutic services depending on the initial order of the specialization.  This system at a time can course problems as clerks may take advantage at one point and create a subauthorisation for their own benefit.


Despite the negative perception about the health care management system, the entrance of the old line insurance companies in the issue of health care management systems in the 1990’s brought about some changes in the industry. For instance, the focus shifted to cost control from earlier concepts that included maintaining of health, undertaking preventive measures and putting in place a good environment for health provision.


Kongstvedt P.R. Essentials of managed Health Care, (5th Ed). ISBN 0763739839, Jones and Bartlett Publishers, 2007.

Leave a Reply

Your email address will not be published. Required fields are marked *