Managed care is a health insurance plan. The strategy involves a contract with health care providers or medical facilities to offer health services to the members at reduced costs. Managed care aims to reduce the cost of healthcare provision and increase the quality of services offered.
Over the years, managed health care has helped in the containment of health care costs. The cost that an individual will pay is entirely dependent on the plan that he or she has chosen. There are three major plans that an individual can adopt, these are;
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Health Maintenance Organizations (HMO): The plan requires an individual to pay for care within the network. An individual selects a primary care doctor who organizes most of his or her care.
Preferred Care Organizations (PPO): The individual pays more for care within the network, but the plan still pays part of costs if care is outside of the network.
Point of Service (POS): The plan allows an individual to choose between the other two plans for health care. It is more costly than the HMO and PPO.
The managed care plans are less costly alternatives and therefore has led to a reduction in healthcare costs. Members can choose among the alternatives for the most affordable plan and dependent on the extent of their illness. Fee for Service plan, which had been in use for a long time, was more expensive since there was no external control of the expenditure.
Managed care has led to a reduction in the quality of health care. The service providers in managed care are given a fixed amount per month per member according to the plan of the enrollee. The capitation limits the service providers in the quality of services they offer. This is because if they spend more on health services than what the capitation per month provides, they face a financial crisis (Mechanic, & Schlesinger, 1996). The healthcare providers, therefore, spend less on health care provision, and this may compromise quality.
The Affordable Care Acts requires that the health insurance plans spend a minimum of 80% of the premiums contributed by the members to pay for the health expenses (Rak, & Janis Coffin, 2013). This means that the health care providers will receive more payments per month for treatment expenses of the individual patients. Under this Act, managed care will have a huge impact on the healthcare quality offered to the individuals since the health providers will have enough funds to facilitate quality treatment. However, the financial impact may hurt the managed care industry hence crippling its operations.
Works Cited
Rak, S., & Janis Coffin DO, F. A. A. F. P. (2013). Affordable care act. The Journal of medical practice management: MPM, 28(5), 317.
Mechanic, D., & Schlesinger, M. (1996). The impact of managed care on patients' trust in medical care and their physicians. Jama, 275(21), 1693-1697.
