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Managed Care Organizations
What is managed care? Managed care is defined as a health care system under which doctors, facilities (hospitals), & other such healthcare professionals are grouped into a network through which they manage all aspects of health care including cost, quality, and access. In short, managed care organizations are in the business of reducing health-related costs by putting the focus on primary and preventive care. Another objective sought by managed care organizations is to lower the overall costs of healthcare through a more efficient method of delivery by the treating physician. In short, managed care organizations are solely accountable for the health of all its members.
There are 2 primary types of managed care organizations, those being:
- Health Maintenance Organization (HMO)
- Preferred Provider Organization (PPO)
HMO: Within a Health Maintenance Organization, all members are referred to the HMO provider who gets paid a fixed amount of money for services. (There are approximately more than 60 million Americans who have an HMO policy)
PPO: Within a Preferred Provider Organization, members can choose to go to a provider outside of the PPO network, however, the PPO will not cover the total cost of the health services, only part.
The main difference existing between HMOs & PPOs is the method of payment that the member makes to the provider for the service(s) received. Originally, managed care was a private institution, provided by private insurance groups such as Kaiser Permanente. There has since been a shift in this type of traditional form of managed care from the private sector to the public sector through the intervention of both State and Federal government who have seen a sizeable increase in their annual healthcare budgets. These State and Federal outlets have been exploring managed care through the implementation of programs such as Medicare & Medicaid, two programs that have become the single largest providers of health care coverage in the US.
Some well known managed care providers are as follows:
- Aetna US Healthcare
- Cigna Healthcare
- Blue Cross & Blue Shield Association
- United Healthcare
- Prudential Insurance Company
- Kaiser Foundation Health Plans, Inc. *
* Kaiser Permanente is the world's single largest health maintenance organization with more than 8 million members served throughout 9 states.
Learn everything you need to know about : HMOs :
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