Managed health care

Managed care is a healthcare delivery system that coordinates the financing and provision of health services to enrolled members with the aim of delivering cost-effective quality care. In the United States, managed care is the predominant form of health insurance coverage and administration.

Overview

Managed care plans establish contracts with healthcare providers and medical facilities to provide care for members at predetermined prices. These contracts create networks of providers, which are fundamental to the managed care system.

Objectives

The primary goal of managed care is to control healthcare costs while maintaining a high standard of care. This is achieved through various strategies such as provider networks, oversight, prescription drug tiers, and other managed care features.

Features of Managed Care Plans

• Provider Networks: Managed care organizations create a network of healthcare providers who agree to serve members of the plan.
• Provider Oversight: These plans have mechanisms for overseeing and coordinating patient care to ensure quality and eliminate unnecessary services.
• Prescription Drug Tiers: Managed care often uses a tiered formulary where drugs are priced differently based on their tier to encourage the use of cost-effective medications.

History and Evolution

Originally, managed care referred to prepaid health plans, especially health maintenance organizations (HMOs). Over time, the term expanded to include other models like preferred provider organizations (PPOs), which offer more flexibility in choosing providers.

Types of Managed Care Plans

• Health maintenance organization (HMO): A plan that typically limits coverage to care from doctors who work for or contract with the HMO.
• Independent practice association (IPA): An organization of physicians that contracts with HMOs to provide services.
• Preferred provider organization (PPO): A type of health plan that contracts with medical providers to create a network of participating providers.
• Point of service (POS): A type of plan where patients pay less if they use doctors, hospitals, and other healthcare providers that belong to the plan’s network.
• Private fee-for-service (PFFS): A plan where payments are made directly to healthcare providers for services rather than prepaying for care.
• Indemnity insurance plans: Also known as fee-for-service plans, they offer more freedom but often come with higher out-of-pocket costs.

Criticisms and Challenges

Managed care has faced criticism for limiting patient choice and the autonomy of providers. Constraints such as the inability to freely choose one's healthcare providers and the requirement to follow care coordination can be seen as disadvantages.

See Also

• Health insurance in the United States
• Healthcare in the United States
• Healthcare reform in the United States
• Patient Protection and Affordable Care Act
• Independent medical review
• Medical care ratio
• Medicaid managed care
• URAC

Managed health care Resources
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