Managed care

Managed care is a health care delivery system organized to manage cost, utilization, and quality. Managed care provides for the delivery of health care services, from the most basic to the most complex. By emphasizing wellness and prevention, managed care reduces the need for more expensive hospital care.

History

The concept of managed care is not new. It has been in existence in some form since the early 20th century when Industrial Health Insurance was introduced in the United States. The growth of managed care in the U.S. was spurred by the enactment of the Health Maintenance Organization Act of 1973.

Types of Managed Care

There are several types of managed care plans:

• Health Maintenance Organizations (HMOs) - These are organizations that provide comprehensive health services to their members for a fixed fee.
• Preferred Provider Organizations (PPOs) - These are groups of health care providers who contract with an insurer or a third-party administrator to provide services to insured individuals at lower than retail rates.
• Point of Service (POS) - This is a type of managed care plan where you pay less if you use doctors, hospitals, and other health care providers that belong to the plan’s network.

Advantages and Disadvantages

Managed care has both advantages and disadvantages. Some of the advantages include lower costs, emphasis on prevention, and improved quality of care. Some of the disadvantages include restrictions on doctors and other providers, limited coverage, and potential for decreased quality of care.

See Also

• Health care in the United States
• Health insurance in the United States
• Health Maintenance Organization Act of 1973
• Healthcare reform in the United States