The Pros and Cons of a Managed Care Arrangement | Feldman Legal Group (2024)

FAQs

What are the pros and cons about managed care organizations? ›

Unlimited care is not an advantage of a managed care organization, as these organizations often have limitations on the amount of care provided. Managed care organizations (MCOs), such as Health Maintenance Organizations (HMOs), provide a range of advantages related to healthcare delivery and insurance coverage.

Health Maintenance Organizations (HMOs)

HMOs usually use capitation, risk pools, and withholds to control physician and patient behavior, consequently control overutilization to achieve cost containment.

Patients also have less choice, as their health care covers only a predetermined network of providers. Even within the network, managed care requires patients to see a primary care physician before being referred to a specialist. These restrictions vary according to each managed care organization.

Patients have raised concerns that managed care plans deny necessary coverage or provide access to mainly lower quality services. Physicians and other providers have expressed concerns that managed care plans may dictate care, monopolize the marketplace, and exclude independent practitioners.

One explanation is that the practices of purchasers (including government and employers), the tax laws, and other market imperfections have reduced the demand for real cost containment, depriving managed care plans of an adequate incentive to cut cost and price.

The term “managed care” is used to describe a type of health care focused on helping to reduce costs, while keeping quality of care high. The most common health plans available today often include features of managed care.

Managed care plans include health maintenance organizations, preferred provider organizations and point-of-service plans.

A major criticism of managed care is that the quality of care may be sacrificed. Managed care organizations, such as Health Maintenance Organizations (HMOs), are controversial because they often impose restrictions on the choice of physicians and the types of medical exams and procedures that patients are allowed.

What are three ways that a managed care plan differ? ›

According to the Academy of Managed Care Pharmacy (AMCP), the goals of managed care include: disease prevention, enhancement of quality of life, increased clinical outcome benefits, improvement of quality and accessibility of care, and to ensure appropriate therapy for patients.

Managed Care Has Reduced Costs and Limited Deficiencies.

The Medi-Cal managed care system has saved money for the state because the capitation rates paid to plans result in an average cost of care per Medi-Cal beneficiary that is less than the equivalent cost of fee-for-service coverage.

Copayment – A fixed amount (for example, $15) you pay for a covered health care service, usually when you receive the service (sometimes called “copay”).

The principle behind managed care is that all health care provided to a patient must have a purpose. What qualifies one to receive Medicare?

PPO plans are more comprehensive in their coverage and offer a wider range of providers and services than HMOs. However, the costs associated with PPOs include higher insurance premiums, copays, and deductibles.

HMOs are usually more affordable than preferred provider organization (PPO) plans, but they offer patients less flexibility. HMO participants must choose a primary care provider (PCP) to coordinate their care. They must see only in-network providers; if not, they'll have to pay for those visits entirely out of pocket.