Managed Care

What is managed care?

Managed care is a system of health care delivery and financing that aims to manage and control costs while also improving the quality of care. It typically involves a network of providers, such as hospitals and doctors, that have agreed to provide services to patients at a discounted rate. Managed care plans often require patients to choose a primary care physician who acts as a gatekeeper, referring patients to specialists and other providers as needed.

Managed care plans include Health Maintenance Organizations (HMOs), Preferred Provider Organizations (PPOs), and Point-of-Service (POS) plans. These plans are usually less expensive than traditional insurance plans and offer more coverage than a high-deductible plan. They can also provide additional benefits such as wellness programs and disease management services.

Managed care plans are often used by employers as a way to provide health insurance to their employees at a lower cost. Managed care plans are also used by government programs such as Medicare and Medicaid to control costs and improve the quality of care for beneficiaries. HBR’s healthcare benefits research

What are the benefits of managed care for employees?

The benefits of Managed Care for employees include:

1. Lower costs: Managed care plans typically have lower costs than traditional insurance plans, which can be beneficial for employees on a tight budget.
2. More coverage: Managed care plans often have more coverage than traditional insurance plans, which can provide employees with more comprehensive coverage for their health care needs.
3. Wellness programs: Many managed care plans include wellness programs, such as gym memberships, health screenings and other health-related activities that can help employees improve their overall health and well-being.
4. Disease management services: Some managed care plans offer disease management services, which can help employees better manage chronic conditions such as diabetes, heart disease and asthma.
5. Coordination of care: Managed care plans can help employees coordinate their care by having a primary care physician who acts as a gatekeeper, referring patients to specialists and other providers as needed, which can help to ensure that employees receive the right care at the right time.
6. Reduced paperwork: Managed care plans typically have fewer administrative requirements than traditional insurance plans, which can help employees save time and reduce stress.
7. Choice of network providers: Employees can choose from a network of providers that have agreed to provide services to patients at a discounted rate.

How does managed care differ from traditional insurance plans?

Managed care plans differ from traditional insurance plans in several ways: SHRM’s managed care and health benefits guidance

1. Network of providers: Managed care plans typically have a network of providers, such as hospitals and doctors, that have agreed to provide services to patients at a discounted rate. Traditional insurance plans, on the other hand, may not have a network of providers and may not offer discounted rates.
2. Primary care physician: Managed care plans often require patients to choose a primary care physician who acts as a gatekeeper, referring patients to specialists and other providers as needed. Traditional insurance plans may not have this requirement.
3. Cost: Managed care plans are typically less expensive than traditional insurance plans.
4. Coverage: Managed care plans often have more coverage than traditional insurance plans.
5. Additional benefits: Managed care plans can provide additional benefits such as wellness programs and disease management services.
6. Prior Authorization: Managed care plans often require prior authorization before receiving certain treatments or procedures, Traditional insurance plans may not have this requirement.
7. Choice of providers: In traditional insurance plans, the members have more freedom to choose their providers, in contrast, in Managed care plans, members have to choose from the network of providers provided by the plan.

Understanding managed care options helps HR design health benefit plans that balance employee choice with cost management. Using objective assessments and a structured hiring plan drives improvement, helping organizations attract and retain top talent.

Frequently asked questions