An Article on Managed Care

The Definition
Managed care is a system in which health plans, such as health maintenance organizations (HMOs) and preferred provider organizations (PPOs), attempt to control health care costs by reducing unnecessary medical services and limiting the access to medical care, while focusing on preventive medicine. Managed Care has been somewhat successful in reducing medical expenses.  In the 1980s, yearly double-digit premium increases were reduced to increases of less than 1 percent by the mid 1990s.

The Benefits of Managed Care
Today, one-third of the United States’ citizens do not have health insurance, or have limited medical coverage. Managed Care has provided consumers with an affordable option in obtaining a health insurance policy. Though there are restrictions on approval for certain services, HMOs and PPOs do offer comprehensive medical insurance coverage to satisfy a patient’s needs.  When selecting a health plan, a person must realize the importance of deciding on a good health insurance policy. A bad policy can cause financial burden for an ill or injured individual, or can severely limit access to good medical care. A good policy should keep personal out-of-pocket expenses to a minimum and have a wide panel of physicians available who are contracted with the plan.

The Problems with Managed Care
The issue with Managed Care is that the health plan now assumes a greater role in the medical care you provide to your patients.  receive. For instance, employers are constantly looking for better rates on health plans.  If they change plans, some of your patients may be affected because HMOs prohibit people to see physicians not in their HMO network.  If your patient's group changes their plan and you are not a member of this new plan, then either you can apply to become part of the HMO network or the patient must pay out of their own pocket.  PPOs do allow a patient to continue to see a physician not within the PPO network, but at a higher deductible, copayment and/or co-insurance to the patient.

HMOs also limit the availability of referrals to specialists.  If you are a Primary Care Physician who acts as a "gatekeeper", you must review the requested referral to deem whether it is medically necessary and cost permissible.  This is where it gets complicated.  If the HMO's physicians are bonused at the end of the year by limiting the number of referrals to specialists, then this may influence a physician's decision and potentially limit a person's access to receive medical care.

Managed Care has significantly reduced the amounts being paid to physicians.  As a physician, you want to get paid fairly and quickly for the work you perform and we don't blame you.  However, sometimes insurance companies drag their feet when they review the medical necessity, usual & customary, pre-existing, ineligible expenses, etc.  The best protection against being taken advantage of by your health plan is to know your rights, have a professional and talented staff and fight for every penny as negotiated in your contract.  Education in how the health insurance industry works is the best prevention against loss of revenue.

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