Managed care

Definition

Managed care is a system of health care delivery that aims to manage cost, utilization, and quality of services through coordinated care and provider networks. It often involves a variety of health plans that provide comprehensive services at lower costs while emphasizing preventive care and disease management. This model is significant in understanding how health care financing operates and the economic implications for both providers and consumers.

5 Must Know Facts For Your Next Test

1. Managed care aims to reduce health care costs by emphasizing preventive services and coordinated care among providers.
2. The growth of managed care in the U.S. began in the 1980s as a response to rising health care costs and inefficiencies in the traditional fee-for-service system.
3. Managed care organizations often negotiate lower rates with providers, which can lead to lower out-of-pocket costs for patients who use in-network services.
4. Quality assurance programs are integral to managed care, focusing on improving patient outcomes and ensuring compliance with established standards of care.
5. Managed care has been associated with both positive outcomes, like improved access to preventive services, and criticisms related to restricted access to specialty services and provider choice.

Review Questions

• How does managed care influence the relationships between health care providers and patients?
  • Managed care significantly influences relationships by creating a structured environment where providers are incentivized to focus on cost-effective, preventive care rather than fee-for-service models. Patients are often required to choose from a limited network of providers, which can impact their access to specialists and treatment options. This model encourages collaboration among providers but may limit patients' autonomy in selecting their caregivers.
• Discuss the economic implications of managed care for health insurance companies and patients.
  • Managed care has considerable economic implications, as it allows health insurance companies to control costs through negotiated provider rates and incentivized preventive services. For patients, managed care can lead to lower premiums and out-of-pocket expenses when using network providers. However, these savings can come at the expense of reduced choices regarding healthcare providers and potentially longer wait times for specialty services.
• Evaluate the effectiveness of managed care in improving health outcomes while controlling costs, considering its impact on patient access and satisfaction.
  • The effectiveness of managed care in improving health outcomes while controlling costs is complex. On one hand, managed care has been successful in promoting preventive health measures and managing chronic diseases, which can lead to better overall population health. However, this success is tempered by concerns about patient access to specialized services and overall satisfaction with the limited choices available. While some studies indicate improved efficiency and cost savings, there is ongoing debate about whether these trade-offs ultimately benefit patients or create barriers to necessary care.

Related terms

Health Maintenance Organization (HMO): A type of managed care organization that requires members to receive most or all of their health care services from a network of providers in exchange for reduced fees.

Preferred Provider Organization (PPO): A managed care plan that offers more flexibility in choosing health care providers, allowing members to see any doctor but providing higher benefits for using network providers.

Capitation:

A payment arrangement in managed care where providers receive a set amount per patient for a defined period, regardless of the number of services provided.