Amil and the Health Care System in Brazil

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HCMG 859 Amil and the Health Care System in Brazil Brian Belsky November 20, 2014 1. What are the advantages and disadvantages of a vertically integrated MCO, relative to an insurer that contracts with independent private providers, from the perspective of (a) the insurer and (b) the patient, in general and in the context of Brazil. When it comes to building and operating a vertically integrated MCO such as Amil in Brazil or Kaiser Permanente in the United States there are both potential advantages and disadvantages. For the insurer or the MCO, there are two major advantages that come from running a vertically integrated healthcare organization: cost control and quality improvement. When running a vertically integrated MCO the economic friction that comes from negotiating reimbursement between an insurer and a provider is eliminated with the benefit accruing to either the company or potentially the patient through a reduced premium. Additionally, there are other economies of scale that come from controlling the patient’s medical experience in a vertically integrated fashion. Specifically in the case of Amil, preventative care and chronic disease management became a large focus of the company, in the hopes of both reducing the long-term cost of care and also improving the quality of care that it provides to patients. This increase in the quality of care provided is also a benefit to the patient of a vertically integrated MCO. Such an undertaking is much more possible in a vertically integrated organization where patient information can be easily and freely shared between physicians and over time. Kaiser Permanente has had similar success with the vertically integrated model. Amil was also able to utilize another specific care delivery model that had both economic and clinical benefits that would only be possible in a vertically integrated
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