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Managed Care
Definition
An arrangement whereby a third-party payer (e.g., insurance company, federal government, or corporation) mediates between physicians and patients, negotiating fees for service and overseeing the types of treatment given. Managed care has virtually replaced unmanaged indemnity plans, where payment is automatic and oversight procedures are minimal. Whereas 96% of American workers had unmanaged indemnity in 1984, only 28% did in 1988. Typically, in managed care, the third-party payer requires second opinions and pre-certification review for patients requiring hospital admission. They obtain wholesale prices from doctors, and carry out cost-containment measures, including auditing hospitals and reviewing claims. Managed care has figured heavily in the national debate over health care. (NCI Thesaurus)
More information
Managed care plans are a type of health insurance. They have contracts with health care providers and medical facilities to provide care for members at reduced costs. These providers make up the plan's network. How much of your care the plan will pay for depends on the network's rules.
Plans that restrict your choices usually cost you less. If you want a flexible plan, it will probably cost more. There are three types of managed care plans:
• Health Maintenance Organizations (HMO) usually only pay for care within the network. You choose a primary care doctor who coordinates most of your care.
• Preferred Provider Organizations (PPO) usually pay more if you get care within the network. They still pay part of the cost if you go outside the network.
• Point of Service (POS) plans let you choose between an HMO or a PPO each time you need care. (NIH)
Also called: Health Maintenance Organizations, HMO
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