Managed Care

Posted in Human Resource Terms, Total Reads: 582

Definition: Managed Care

Managed Care is a healthcare system which is widely followed in the United States. The objective of the system is to provide better quality health care at lesser costs. Through this system, patients associate themselves with certain network organizations who in turn are in contract with physicians/hospitals (health care providers) & insurance companies. Today in the US, this system manages the health care of 90% people who are insured.

There are primarily 3 main types of managed care programs:

[1] Health Maintenance Organisation (HMO)

In this model, patients are required to pay a regular amount monthly to the HMO and become members. The subscribed HMO then assigns each member to a primary care physician (PCP) who will take care of the patient’s regular health care. The PCP can sometimes also refer the patient to a specialist depending upon the case.

[2] Preferred Provider Organisation (PPO)

This plan consists of an agreement between the PPO (who are basically a group of physicians/ hospitals) and insurance companies. The health care providers provide service at a discounted rate to the clients of the insurance companies according to the contract. Under this method, the providers are assured of fixed patients who can choose their preferred physician/hospital. This has been emerging as the popular choice of managed care program in the US.

[3] Point of Service (POS)

In this plan, both the features of HMO & PPO are combined. The patient needs to first get enrolled with a POS plan (as in a HMO). After that, the patient gets to choose from a network of providers (as in a PPO).


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