Managed Care

Definition

Managed care is a healthcare delivery system designed to manage the cost, utilization, and quality of healthcare services. This approach integrates the financing and delivery of healthcare, often through contracts with healthcare providers to ensure that patients receive appropriate care while controlling expenses. It played a significant role in shaping healthcare policy in the US, particularly in addressing issues related to rising healthcare costs and access to services.

5 Must Know Facts For Your Next Test

1. Managed care originated in the US in the 1970s as a response to rising healthcare costs and was intended to provide more coordinated and efficient care.
2. The introduction of managed care led to the development of various models, including HMOs and PPOs, each offering different levels of flexibility and cost control for patients.
3. One major goal of managed care is to promote preventive care by incentivizing providers to keep patients healthy, thus reducing the need for more expensive treatments later.
4. Managed care organizations often negotiate lower rates with healthcare providers, which can lead to reduced costs for patients but may also limit their choice of providers.
5. The rise of managed care has had significant implications for healthcare policy in the US, influencing debates around access to care, quality of services, and the overall structure of health insurance.

Review Questions

• How does managed care influence the relationship between patients and healthcare providers?
  • Managed care affects the patient-provider relationship by introducing structured networks and guidelines that both parties must follow. Patients often select from a limited network of providers, which can streamline communication and coordination of care but may also restrict their choices. Additionally, managed care emphasizes cost-effectiveness, which may lead providers to prioritize preventive measures over reactive treatments, fundamentally changing how care is delivered.
• Evaluate the impact of managed care on healthcare costs in the US.
  • Managed care has significantly impacted healthcare costs in the US by promoting more efficient use of resources and negotiating lower prices with providers. By focusing on preventive care and requiring prior authorization for certain services, managed care aims to reduce unnecessary expenditures. However, while it has helped contain some costs, critics argue that it may compromise the quality of care due to restrictions on provider choice and treatment options.
• Discuss how managed care has shaped recent healthcare policy reforms in the United States.
  • Managed care has played a pivotal role in shaping recent healthcare policy reforms in the United States by emphasizing cost containment and coordinated care. The Affordable Care Act incorporated elements of managed care by promoting Accountable Care Organizations (ACOs) that incentivize quality over quantity in service delivery. This shift reflects a broader trend towards value-based care models aimed at improving patient outcomes while controlling spending, making managed care a central theme in ongoing discussions about health reform.

Related terms

Health Maintenance Organization (HMO): A type of managed care organization that provides health insurance coverage through a network of doctors and hospitals, requiring members to choose a primary care physician for referrals to specialists.

Preferred Provider Organization (PPO): A managed care plan that offers more flexibility in choosing healthcare providers, allowing members to see any doctor but providing incentives for using a network of preferred providers.

Capitation: A payment arrangement in managed care where providers are paid a set amount per patient for a defined period, regardless of how many services the patient uses.