What is Managed Care Plan?

Managed care plan is a variety of techniques that is designed to help reduce the cost of providing improved quality of care and health benefits to organizations. The techniques that may be used are as follow: providing economic incentives for physicians; increase in the cost of beneficiary sharing; establishing cost-sharing incentives for outpatient surgery, intensifying management of high-cost health care cases and controlling inpatient admissions and their length of stay.

Health Maintenance Organization Act of 1973
This is more popularly known as the HMO Act of 1973 which was passed as a result of the discussions conducted in the Congress of the United States with Paul Ellwood. This Act provided loans and grants to help begin, provide and expand the Health Maintenance Organizations of the country. The number of employees that can take advantage of this service was reduced to 25 and certain state restrictions were also removed. This further solidified the offers of HMO and provided HMO a greater access to different employers of the market.

Typical Managed Care Techniques
The most significant characteristic of managed care is the use of network or panel of health care providers which can assist the listed and approved enrollees. It shares the following integrated delivery systems:

1. It has explicit standards for the selected health care providers.
2. It emphasizes on preventive care.
3. It provides financial incentives to further encourage the efficiently use the services offered by the managed care organization.
4. It has a selected list of health care providers that provides a comprehensive array of health care services to its enrollees.
5. It has a regular set of formal utilization review that aims to help improve the quality of its programs.

Different types of Organization which Offers Managed Care Plan

Health Maintenance Organization (HMO)
This is the most inexpensive and basic type of health maintenance organization which provides basic healthcare coverage to its members. It has attracted many small businesses because of its relative affordability without compromising the services of its enrollees. In this type of managed care plan, the enrollees are given the liberty to choose a primary care physician (PCP) who is tasked to take care of all the basic needs of the enrollees. The task of the PCP is to coordinate the member’s care and for him to provide referrals to other specialists who can assist the health care needs of the enrollees.

Point of Service Plan (POS)
This is more comprehensive in comparison to an HMO plan. This is offered by companies and business owners to cater to the needs of its employees who seek aid of physicians who are outside of the health plan’s network. Through this managed care plan, the enrollee is still expected to choose a PCP who will handle and coordinate the health care services needed by the enrollee but it is not limited to health care providers of the managed care plan organization.

Preferred Provider Organization (PPO)
This is the most comprehensive type of managed care plan which gives utmost liberty to its enrollees in selecting health care providers. Enrollees are given freedom to choose services either from inside or outside health plan networks but of course the payment for out-of-network services is still higher.