The term “managed care is” used in the United States to describe activities intended to reduce the cost of providing for-profit healthcare and provide health insurance while improving the quality of that care. Managed care plans are a type of health insurance, which include contracts with healthcare providers, medical facilities, and physicians to provide care for their members at reduced costs. These providers make up the plan’s network, and how much of the care provided is paid for by the plan, depends on the network’s rules.
Plans that restrict choices usually cost less, while more flexible plans cost more. There are three types of managed care plans:
● Health Maintenance Organizations (HMO) generally pay for care within a set network of physicians. The patient chooses a primary care doctor who coordinates most of his/her care.
● Preferred Provider Organizations (PPO) usually pay more of the cost of care if the care is within the network. PPOs still pay part of the cost if the care is outside of the network.
● Point of Service (POS) plans allow the patient to choose between an HMO or a PPO model each time care is needed.