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What You Should Know About Managed Care
Gail Carlson, MPH Ph.D, State Health Education Specialist, University of Missouri Extension
While legislative health reform seems to be progressing slowly, the health care industry is rapidly reorganizing itself in an effort to control costs. Managed care is the result. Managed Care is a system of health care that controls the cost of services, manages the use of services and measures performance of health care providers. There are different types of managed care plans. Therefore, it is important for individuals to know the details of their specific plan. In general, managed care differs from conventional health insurance in some of the following ways.
1. Choosing a Doctor
- Conventional insurance - individuals can choose any physician they want at any time they want. This includes choosing a specialist of their choice.
- Managed care - individuals choose a physician from a list provided by the plan. When using specialists some plans allow members to select any specialist from the provided list. In others, the individual's primary care physician must make a referral.
2. Deciding about the quality of care
- Conventional insurance - the individual is responsible for determining if her physician is qualified to provide the kind of care that is needed. The individual is also the one to determine if she is receiving quality health care. The health insurance plan usually does not get involved in this decision.
- Managed care - the plan typically determines if a doctor is qualified before the doctor joins the managed care network. Annual surveys of patients and chart reviews are done to maintain the quality of care. Some plans also have a grievance procedure which members are encouraged to use if they are not satisfied with the quality of the care.
3. Paying for Care
- Conventional insurance - the usual method of payment is called fee-for-service. The physician is paid for each appointment. The bill increases as more services are provided, or as more expensive services are substituted for less expensive ones. Typically, the individual pays the bill and is partially reimbursed by their insurance company.
- Managed care - the usual method of payment is known as "capitation". Providers are paid a fixed amount for each person (member) enrolled in the plan. For example, the plan might agree to provide care for $100 per member per month. Whether a member never sees the doctor or sees her 20 times, the provider does not get any more (or any less) than the agreed upon amount. The capitated (fixed) amount is usually paid by the employer or Medicare. Some plans also have members pay a small co-payment for each visit.
Last Updated 05/05/2009