Strategic Management Process for Implementation of Medicare Term Paper

Pages: 12 (3248 words)  ·  Bibliography Sources: 8  ·  File: .docx  ·  Topic: Healthcare

¶ … Strategic Management Process for Implementation of Medicare Advantage Product in Health Maintenance Organization

The Medicare Prescription Drug, Improvement and Modernization Act of 2003 was signed into law in December 2003. This law makes changes of a major nature to Medicare, which is the health insurance program for those 65 years of age and over as well as some individuals with disabilities. One of the changes made by this Act is the alternation of the program dealing with private health plans in Medicare specifically Medicare+Choice. Medicare Part C (Medicare+Choice) has been renamed to Medicare Advantage and is the method of obtaining Medicare coverage through a private health plan, which are likely to be less expensive than original Medicare and as well may provide benefits that are not covered under Medicare. The Medicare Advantage may be in the form of:

Health Maintenance Organization (HMO)

Point of Service (POS);

Private Fee-for-Service (PFFS) plan; or 4) Local Preferred Provider Organization (PPO).

For the purpose of this study, the Health Maintenance Organization (HMO) will be the focus of study. This plan is ran by a private company and the private company makes the rules of benefit coverage and payment. This company will decide each year whether to offer the Medicare Advantage plan. The individual can choose each year whether to stay in the plan choose another plan or return to traditional Medicare. (Medicare Advantage, How Does it Relate?, nd; paraphrased)

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The Health Maintenance Organization provides each member with a primary care physician that sees the patient for all of their health care needs. Within the framework of the HMO the primary care physician is the one who makes the decision as to whether the patient needs to see a specialist, whether the patient is admitted to the hospital, or needs any special tests or procedures.

Term Paper on Strategic Management Process for Implementation of Medicare Assignment

The work of Hoadley (2006) entitled: "Medicare's New Adventure: The Part D Drug Benefit" relates that the greatest challenge faced by the Medicare program is "...educating beneficiaries about the new benefit." The first step in the decision of beneficiaries to enroll in Medicare advantage is learning "enough about the program to decide whether to enroll." (Hoadley, 2006) Secondly, the individual must "determine their possible eligibility for the low-income subsidy." (Hoadley, 2006) Third, 'beneficiaries who enroll in Part D must sort through the array of choices - both the standalone prescription drug plans and the MA plans." (Hoadley, 2006) a study conducted in October 2005 by researchers at the Kaiser Family Foundation and the Harvard School of Public Health states that beneficiaries "are expected to turn to a variety of sources when deciding whether to enroll in a Medicare drug plan." (Hoadley, 2006) Top among these were Medicare, doctors, and pharmacists.


The Medicare Prescription and Drug Improvement and Modernization Act of 2003 became law in 2003 and has, among other provisions the Part D drug benefit. Prior to the MMA there were no outpatient drugs covered under Medicare creating a huge gap in the coverage. Medicare Part D is reliant on private drug plans that are in competition in 39 regions for availability of the benefit covered under Medicare. MA organizations are required to make an offer of at least one plan accompanied by a drug benefit to those enrolled in the areas in which they serve. The following chart illustrates the range of premiums for all stand-alone prescription drug plans for 2006.

Range of Premiums for all Stand-Alone Prescription Drug Plans

Source: Covering Health Issues (2006)

Depending on the situation of the beneficiary, the role of Medicare Part D differs in a substantial manner. There are almost 6.6 million beneficiaries who are dually eligible and who have been receiving drug coverage from Medicaid and who were furthermore required to switch to Part D plans. These dually eligible individuals were "automatically enrolled for the low-income subsidy and were randomly auto-enrolled in a Part D plan with an option of switching to a different plan." (Covering Health Issues, 2006) the beneficiaries of Medicaid who were enrolled in eligible Medicare drug plans are not required to pay premiums or deductibles and subsequently do not have a coverage gap to deal with. The following chart shows the number and percentage of plans covering top 10 brand name and generic drugs for 2006.

Number and Percentage of Plans Covering Top 10 Brand-Name and Generic Drugs (2006)

Source: Covering Health Issues (2006)

The analysis is stated to be based on: "...coverage of 152 drugs from Drug Plan Finder for 35 different stand-alone Medicare Prescription Drug Plans offered by 14 sponsor organizations, representing 1,222 of the 1,429 plans nationwide." (Covering Health Issues, 2005) it is related that a great challenge Medicare faced in the education, marketing and enrollment of beneficiaries in this plan was the education of beneficiaries about this benefits. Confusion about this drug benefit has posed a major concern related to implementation of this plan. Forty percent of beneficiaries stated that the "process of researching a plan selection to be difficult." (Covering Health Issues, 2006)

The work of Jones, Jones and Miller entitled: "The Medicare Health Outcomes Survey Program: Overview, Context and Near-Term Prospects" relates that: "Medicare managed care plans are an important source of health care services for beneficiaries. At present, 5.3 million beneficiaries receive care in these settings, of whom 4.6 million are enrolled in Medicare+Choice plans (since renamed Medicare Advantage plans)." (2004) the ability of the managed care organization in providing quality health care is very important to the Medicare program as Medicare provides services to 34.6 million elderly and six million young beneficiaries with disabilities. (Jones, Jones and Miller, 2004; paraphrased) Many of these individuals are poor and approximately 40% having incomes "of 200% of the poverty level or lower. Chronic conditions are prevalent, with 57%a of non-institutionalized beneficiaries self-report arthritis, 55% reporting hypertension and 37% reporting heart disease." (Jones, Jones, and Miller, 2004)

The Centers for Medicare & Medicaid Services initiated the Medicare HOS program in 1996, which is a survey that "measures a health plan's ability to maintain or improve the physical health of its Medicare beneficiaries over time." (Jones, Jones and Miller, 2004) the HOS is comprised of the SF-36 questions concerning the Activities of Daily Living (ADLs), chronic health conditions, demographics, and survey administration. HOS is used in collection of health outcomes and is stated to mirror: "...national trends in quality improvement activities to utilize outcome-based measures of quality." (Jones, Jones, and Miller, 2004) Jones, Jones and Miller state:

The HOS is based on a longitudinal cohort research design, in which a baseline and 2-year follow-up surveys are administered to a sample of beneficiaries in each plan. The survey is primarily a mailed questionnaire that is sent to selected participants, with a series of reminder postcards and telephone interviews among non-respondents and incomplete survey respondents in efforts to increase the survey response rate.. The HOS survey instrument consists of three primary components: 1) the SF-36®, 2) case-mix and risk-adjustment questions, and 3) demographic and other questions required by the 1997 Balanced Budget Act the SF-36®, as previously noted, is a multipurpose short-form general health survey, which provides eight scale scores of physical and mental health attributes, as well as two summary measures of physical and mental health status, the Physical Component Summary (PCS) and Mental Component Summary (MCS), both of which are weighted combinations of all eight scale scores the responses to the SF-36® are scored as eight Likert scales, summarized using standard weights, and then normed using 1998 U.S. general population data to produce the PCS and MCS scales." (2004)

All HMOs are responsible to align their standards of practice to meet the requirements set out so that they are able to meet the standards when Medicare applies the testing measures as related. The work entitled: '2007 Medicare Products" published by the Harvard University Mossavar-Rahmani Center for Business and Government" relates the description of the Medicare 'Part D' plan as shown in the following table.

Description of Medicare 'Part D' Plan

Source: Harvard University Mossavar-Rahmani Center for Business and Government (2007)


The work of Ginter, Swayne and Duncan entitled: "Strategic Management of Health Care Organizations" defines the Health Maintenance Organizations (HMOs) as the "organization interposed between providers and payors that attempts to manage the care on behalf of the health service consumer and payor." (2003) Therefore the strategy formulation of the HMO for implementation of the Medicare Advantage program for its patients will involve first and foremost the education of the patients as to what benefits are offered to them through this program.


It is the mission of the Health Maintenance Organization to provide patients with the information and education needed to access the benefits of the Medicare Advantage program.


The vision of the Health Maintenance Organization is that all patients will receive the optimal health maintenance care possible.


Values of the Health Maintenance Organization include:

1) Educating all patients so they are enabled to assess the… [END OF PREVIEW] . . . READ MORE

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APA Style

Strategic Management Process for Implementation of Medicare.  (2007, December 7).  Retrieved January 24, 2021, from

MLA Format

"Strategic Management Process for Implementation of Medicare."  7 December 2007.  Web.  24 January 2021. <>.

Chicago Style

"Strategic Management Process for Implementation of Medicare."  December 7, 2007.  Accessed January 24, 2021.