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Managed care

Updated on March 6, 2015


Managed care is a significant part of healthcare today. However, there are lingering questions about whether it is an effective policy for a society to control healthcare costs. The evaluation of the system shows that it has advantages and disadvantages. Most individuals do not understand the implications of managed care health insurance. Under managed care insurance, companies try to control the cost of healthcare for employers by introducing specific guidelines or protocols that health care professionals must follow. In addition, they seek to improve the ways that both employees and employers select their medical providers and facilities. The assumption is that the plan will enable financial accounting practices that show the results of various medical treatments used in both patient responses and quality of life issues. The system was motivated by a belief that a managed care system will enable both employers and employees to improve their selection of quality health care providers (Claxton, Rae, Panchal, Damico & Lundy, 2012).


Managed care plans emerged during the 1920s. However, their origins can be attributed to the efforts of non-profit organizations during the 1940s. The growth of managed care was slow until healthcare costs began to increase in the 1970s and 1980s. Consequently, employers were forced to seek managed care as an alternative to the high-priced health care options. The significant increase in competition within the health care industry led to the birth of profit making organizations that offered new and innovative managed care techniques (Southfield, Lee & Patton, 1997). In addition, a lot of the states pursued a policy that involved the reorganization of their Medicaid plans to accommodate managed care plans. The enrollments in managed care increased significantly and by 1999 it had become a mainstream practice in the American healthcare sector.


The insurance companies benefit from managed acre in two significant ways. The first one involves money. The banding together of a group of healthcare providers places the focus on providing healthcare that will save money for the employer that have health insurance plans for their employees. Saving money on health insurance enables employers to reduce their healthcare costs. In addition, it enables them to increase the scope of the coverage for their employees (Claxton, Rae, Panchal, Damico & Lundy, 2012).

The second benefit involves the quality of service. Insurance companies and employers feel that they can assist their employers in the selection process by having a network of medical providers that they have already evaluated by the insurance companies. The selected network of providers has been vetted. As a result, they have the credentials and the experience that is needed to benefit the needs of their subscribers.

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Although the advocates of managed care believe that a patient should deal with one health care provider who will decide if they need to receive specialized attention, some patients feel that the system locks them into using a doctor that they are not comfortable with ( (Sekhri, 2000). The observation is especially true if they change employers or the employer decides to change their health care plans while the current physician is not involved in the new plan. The move can result in expensive personal expenses if the employee decides to consult a physician who is out of the network.

Another problem that some people have with managed care plans is based on a lack of trust in the healthcare system. In order to save money, some primary physicians may decide to forego the necessary testing until the disease gets out of control. In such instances, most physicians simply recommend over the counter medications for conditions that should be treated suing prescription medicine. As a result, it is clear that managed acre introduces vested interests into the healthcare process.

Although there are concerns over managed care, employees should embrace the system. First, it enables them to access doctors and healthcare institutions that have been thoroughly vetted (Sekhri, 2000). Second, it enables them to save funds that they would have otherwise used in case they got seek. Furthermore, managed care enables employers to expand the scope of their coverage.

Employees can opt out of managed care. The move will ensure that they have the ability to determine the doctors that they can see. In addition, it is recommended for freelancers and other individuals that are not on permanent employment.

A point of sale combines the features of HMOs with some characteristics of Preferred Provider Organization (PPO). For example, the capitulation or risk-sharing payment arrangement with providers and gatekeepers. The practice aims at retaining the benefits of tight utilization management. In addition, it seeks to provide an alternative to the unpopular feature of restricted choice.

In contrast an HMO is the most common type of MCO. Five characteristics differentiate it from the rest. First, it provides care during illnesses but focuses on wellness management. Second, individuals can choose from a panel of PCP. The PCP acts as a gatekeeper. Third, it provides capitated fee. Fourth, patients receive healthcare from hospitals within the network. Furthermore, HMO is responsible for establishing quality standards.

Preferred Provider Organization plans involve one of the significant plans for individuals and families. The plans enable a person to visit whatever in-network physician that they like. In addition, it allows individuals to seek treatment in healthcare providers of their choice. The process is made efficient by making it unnecessary to have a referral from a primary care physician.

Physicians believe that managed acre has both positive and negative effects. They need to find a balance between financial mechanisms and the need to provide competent and compassionate care ((Southfield, Lee & Patton, 1997). Healthcare institutions benefit from having a list of potential patients.

Patients believe that some forms of managed care create a financial incentive that encourages doctors to spend less time with the patient. For example, under preferred provider plans physicians may compensate for a decrease in reduced fees-for-services by attending to more patients. As a result, the time available for discussing and exploring the problems of the patient is reduced. In addition, it becomes difficult to maintain a meaningful relationship with the patient.


In conclusion, employers should remember that they can reduce healthcare expenses for themselves and their employees through managed care. However, they have to ensure that they make good choices when choosing their healthcare providers. The move will ensure that they receive the best acre from their physicians and the specialists within the network. Unfortunately, the PCP is limited in the choices that they can choose. As a result, the patient must ensure that they take an aggressive role in ensuring that the PCP knows all the symptoms that they have. The move will enable them to determine if the patient should receive more aggressive treatment.


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