Managed Care is a healthcare delivery system designed to manage cost, utilization, and quality. This system employs a variety of techniques intended to improve the value of health services, which involves the coordination of care and services provided to patients. Managed care plans typically have contractual agreements with a network of healthcare providers and facilities to provide care for members at reduced costs. These providers make up the plan’s “network.”
The managed care model emphasizes preventative care and may require patients to select a primary care physician who acts as a gatekeeper, controlling access to specialists and diagnostic tests to prevent unnecessary treatments and manage overall healthcare costs. Members might need to get a referral from their primary care physician before seeing a specialist or having certain medical procedures done.
There are several types of managed care plans, including Health Maintenance Organizations (HMOs), Preferred Provider Organizations (PPOs), and Exclusive Provider Organizations (EPOs), each with different rules and structures. HMOs often require members to use healthcare providers within their network and choose a primary care physician, while PPOs offer more flexibility, allowing members to see providers outside of the network for a higher cost. EPOs are similar to PPOs but typically do not cover any out-of-network care except in an emergency.
Managed care plans also focus on measuring performance and improving quality through standards and guidelines. They may use various incentives, such as financial rewards or penalties, to encourage adherence to these guidelines. The overarching goal of managed care is to provide cost-effective healthcare without sacrificing quality, ensuring that patients receive appropriate, timely care while controlling healthcare spending.