Managed Care

Managed Care

 

Main Characteristics of Managed Care

MCOs manage financing, insurance, delivery, and payment for providing health care:

  • Premiums are usually negotiated between MCOs and employers.
  • MCOs function like an insurance company and assume risk.
  • MCOs arrange to provide health care, mainly through contracts with providers.
  • MCOs manage the utilization of health care services.
  • Commonly used payment methods are capitation and discounted fees.
Source: Exhibit 9.1, p. 214 from Shi & Singh (2013)

See the table below for descriptions of the three types of manages care plans: Health Maintenance Organization (HMOs), Preferred Provider Plans (PPOs) and Point of Service plans (POS).

Main Differences in Managed Care Structures

  1. Choice of Providers
  2. Delivery of Services
  3. Payment and Risk Sharing Source: Exhibit 9.2, p. 223 from Shi & Singh (2013)

 

Differences in Managed Care Structures.png

For more on managed care and the differences between HMOs, PPOs, and POS plans watch the Humana video below and read Bodenheimer & Grumbach (2005) Chapter 6 and Chapter 4 (pg. 32-33).

PPOs versus HMOs

The distinction between HMO and PPO is important. PPOs offer more consumer choice and control. There is generally a price for this choice, and that comes in the form of an increased premium.  If you are not completely clear on the difference between HMOs and PPOs I recommend watching the video below.

PPOs versus HMOs

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Source: Humana http://www.humana.com/resources/videos/healthcare_education/ppos_hmos.aspx

 

 

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 Toggle open/close quiz question

Match the items.
The task is to match the lettered items with the correct numbered items. Appearing below is a list of lettered items. Following that is a list of numbered items. Each numbered item is followed by a drop-down. Select the letter in the drop down that best matches the numbered item with the lettered alternatives.
a. An agreed upon fee paid for medical benefits for a defined period. The fee can be paid for by the employer or the employee, or the fee can be shared.
b. A government health insurance program primarily for people over age 65.
c. A government health insurance program for people with low income.
d. A type of medical cost sharing in which the consumer pays a fixed amount each time a medical service is provided.
e. One bundled payment is made for each patient's treatment during a month or year.
f. A fixed amount during a benefit period that the policy holder must pay before the insurer pays benefits.
 

 Toggle open/close quiz question

Match the items.
The task is to match the lettered items with the correct numbered items. Appearing below is a list of lettered items. Following that is a list of numbered items. Each numbered item is followed by a drop-down. Select the letter in the drop down that best matches the numbered item with the lettered alternatives.
a. Specified dollar amount that an insurer will pay for hospital care for all service provided in one day.
b. Services covered by the health plan, but not included in the capitation rate.
c. A physician or group is paid for each visit, procedure, or other service based on a predetermined reimbursement formula.
d. A system of reimbursement under Medicare in which providers are reimbursed a fixed amount based on the diagnosis.
e. If a patient incurs high costs beyound the capitated fee given to a physician or group, the insurer agrees to pay for costs beyound a specified dollar amount.
 

 

Source: developed by Mary Palaima, PT, MBA, EdD, Clinical Assoc. Professor at Sargent College of Health and Rehabilitative Sciences

 


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