Managed Care Programs Analysis

Managed health care refers to the various types of health care insurance programs that aim at providing the people with health care services at the lowest price possible. The focus of the various programs employed differs depending on the type of the managed health care in question for instance some have been known to focus on prevention of diseases thereby keeping the members healthy. Managed care system function by tying the service delivery to the financing of the services delivered and this is normally done by the having the organizations covering all or part of the services to be delivered.

It then convinces its members to obtain health services from its health providers. Other organizations allow the members to obtain help from their health provider of choice, although if the member chooses to obtain services from the organization, then the organization will cater for a larger portion of the cost (North Carolina Institute of Medicine, n.d). The managed health care systems are normally composed of a program that help in deciding the cost and the type of health care to be used and a physician reimbursement that prevent the provision of unnecessary care by the physicians, some even give the physicians incentives so as to do away with the provision of unnecessary care.

The managed care provisions programs are normally varied and they include Preferred Provider Organizations (PPOs), which normally sign contracts with health providers who are willing to receive lower rates of payment so as to manage the health care cost. Although they normally allow the members to choose their health provider of choice, they will have to pay more if they go for a provider outside the organizations network (North Carolina Institute of Medicine, n.d). The POS are mainly preferred by the old insurance firms.

Health Maintenance Organizations (HMOs) use gate keepers to organize the referral of a patient to a hospital or the admission of a patient to a given hospital. However, some of them allow the selection of the physician within the organization’s network. There are normally reimbursement programs to make the physicians to be cost conscious when giving managed care (American Hearts Association, 2009). The HMOs can contract the physicians who are in the community or a contract organization where the physician works; this is referred to as network or IPA model HMO. Others may consider having their own physicians (whom they will pay salary) or may contract, giving rise to a group or staff model.

Point of Service (POS) organizations allow their members to see physicians outside their network, although just like the above two; members who use providers within the network pay less than those that use providers outside of the network.

Primary Care Case Management (PCCM) is a managed health care organization that operate within the Medicaid health program Under this kind of arrangement, Medicaid pays the health provider a monthly management fee to manage the patient; or members care though the physician is paid for the services they deliver on a fee for service terms. The health care provider is also mandated under this arrangement to authorize all the non emergency visits to hospitals and all referrals to specialists (American Heart Association, 2009).

Earlier insurance companies always employed the fee for service tactic in which the members were allowed to use the care provider of their choice; while the managed healthcare tends to limit the member to its network of care providers. Sometimes, they even give the members discounts so as to have them use their providers. HMOs are different from the old insurance covers since they tend to lay emphasis on prevention as well as cover the annual physical checkups including child checkups; they also carry out an analysis of the quality of care given to its members. The HMOs have also been criticized for restrictions imposed on its members to its network of providers.

They have also been claimed to entice their providers to give necessary and quality care, which is likely to make the physicians hold some crucial service needed by the patient. However, there have been arguments that the fee for service mode of payment by the other insurers encourages physician to give unnecessary care. The HMOs normally require that the members use their network of care providers and if a member does otherwise, then he bears the cost. They also do not demand that their members pay deductions if services are received outside the network, even though there is a payment of similar amount made when services are given. The PPOs on the other hand allow the member to visit their providers of choice once the deductions are made.

The organizations normally pay reimbursement for the services delivered through salaries and this is normally for the permanently employed staff; this is especially used by the HMOs. Some of the organizations like PPOs and PCCMs use the fee-for-service arrangement which involves the organization paying the physician for only those services he or she has delivered. This may result in the physicians giving unnecessary services to the patient. Another mode of payment is Capitation mode of payment, which involves paying the physician a fixed amount of money on a monthly basis regardless of the amount or type of service rendered to the patient (Hogan, 2003).

To manage the costs of health care, the organizations give inducements to the care providers to avoid unnecessary care that may end up increasing the cost of care. Some of the contracts signed by the care givers also limit the physician to the choice of services prescribed by the organizations; most of which is rather keen on lowering the cost of care.

Managed health care is very crucial as far as health management in the country is concerned; this is because it enables a number of people to get health care services at subsidized prices. It also offers a variety of services that enable people to make a choice on one that suits them. It is therefore important that steps are made into ensuring that costs are minimized and the quality of services improved. In his writing, Kongstvedt (2003, p. 130) explains that the major complain by most physicians is that, the needs of the managed care organizations and the patient are in conflict, and therefore the physician is tied up between not knowing whether to prioritize the patient’s needs or those of his or her employer.


North Carolina Institute of Medicine. (N.d). Different Types of Managed Care. Web.

American Heart Association. (2009). Managed Health Care Plans. Web.

Hogan, B. M. (2003). Capitated Managed Health Care: Is There a Difference among Ethnic Minority Physician. Web.

Kongstvedt, P.R. (2003). Essentials of managed health care. Volume 1. Ontario, Jones and Bartlett Publishers.

Find out your order's cost