Managed Care

Definition

Managed care is a system of healthcare delivery that aims to control costs and improve the quality of care by actively managing the utilization and provision of healthcare services. It involves the coordination and integration of various healthcare services and resources to ensure efficient and effective patient care.

5 Must Know Facts For Your Next Test

1. Managed care aims to control healthcare costs by emphasizing preventive care, early intervention, and efficient utilization of resources.
2. Managed care organizations often use utilization review, pre-authorization requirements, and financial incentives to influence the healthcare decisions of providers and patients.
3. Capitation, where providers receive a fixed payment per patient, is a common payment model in managed care systems to encourage cost-effective care.
4. Managed care plans typically have a network of preferred providers, known as a Preferred Provider Organization (PPO), that offer discounted rates and better coverage for patients.
5. The goal of managed care is to balance the need for cost-effective healthcare with the provision of high-quality, evidence-based medical services.

Review Questions

• Explain how managed care aims to control healthcare costs and improve the quality of care.
  • Managed care aims to control healthcare costs by emphasizing preventive care, early intervention, and efficient utilization of resources. This is achieved through various mechanisms, such as utilization review, pre-authorization requirements, and financial incentives that encourage healthcare providers to make cost-effective decisions. At the same time, managed care organizations strive to improve the quality of care by promoting evidence-based practices, care coordination, and the use of preferred provider networks that offer discounted rates and better coverage for patients.
• Describe the role of capitation in managed care and how it incentivizes healthcare providers to manage costs.
  • Capitation is a payment model commonly used in managed care systems, where healthcare providers receive a fixed amount per patient, regardless of the services provided. This model incentivizes providers to manage costs and deliver efficient care, as they are financially responsible for the overall health of their patients. By receiving a predetermined payment per patient, providers are motivated to find ways to provide high-quality care while minimizing unnecessary utilization of healthcare resources. This payment structure encourages preventive care, early intervention, and the efficient use of healthcare services, which can ultimately lead to cost savings for the managed care organization and its patients.
• Analyze how the use of preferred provider networks in managed care plans can impact the quality and cost of healthcare services.
  • Managed care plans often utilize preferred provider networks, known as Preferred Provider Organizations (PPOs), which offer discounted rates and better coverage for patients when they use in-network healthcare providers. This structure can have a significant impact on the quality and cost of healthcare services. By negotiating lower rates with a network of pre-approved providers, managed care organizations can offer more affordable healthcare options to their patients. Additionally, the requirement to use in-network providers can incentivize those providers to maintain high-quality standards and adopt cost-effective practices to remain part of the preferred network. This can lead to improved quality of care and better patient outcomes, while also helping to control overall healthcare costs for the managed care plan and its members.

Related terms

Utilization Review: The process of evaluating the appropriateness, necessity, and efficiency of healthcare services to ensure that patients receive the right care at the right time.

Capitation: A payment model in which healthcare providers receive a fixed amount per patient, regardless of the services provided, to incentivize them to manage costs and provide efficient care.

Preferred Provider Organization (PPO): A type of managed care plan that allows patients to choose from a network of pre-approved healthcare providers, with lower out-of-pocket costs when using in-network providers.