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What is Managed Care?

Managed Care Definition: health care coverage plans, such as Health Maintenance Organizations (HMOs) and Preferred Provider Organizations (PPOs), designed to lower medical costs through several methods. Managed Care providers employ cost-saving tactics that include discounts for doctors and patients who use less expensive forms of care; medical necessity review programs for costlier or overused procedures; cost sharing amongst beneficiaries; limits on frequencies and durations of hospital visits; contracts with selective health care partners for their services; and more.

‘Cutting Costs’ is the Name of the Game

Some of the largest patrons of Managed Care health insurance are state Medicaid systems. Previously, most Medicaid systems used fee-for-service but as Medicaid transitioned from a generally healthy population of patients to being more inclusive of the disabled, chronically ill and seniors, the cost-cutting and aspects of Managed Care programs began to make more sense.

Many Medicaid enrollees with disabilities are difficult and costly to serve, primarily because of the wide-ranging needs within the target population; hence the importance of coordinating and synchronizing services and supports across multiple service delivery systems.

In short, "Managed Care" is a general term describing health care organizations that integrate the practice, administration and financing of health care. Some forms of managed care include health maintenance organizations and independent provider associations, but there are many variations and other Managed Care Organizations.

Managed Care Vs. Tradition

Managed care is differentiated from previous forms of traditional medical practice that call for doctors to make all medical decisions and bill patients without the involvement of outside payers or financial managers. Health care coverage used to be based on indemnity, security or protection against a loss, much like the insurance one has on a vehicle.

This point allows for another definition of Managed Care which characterizes it as health care coverage programs that employ a range of interventions, such as those listed in the introduction of this entry and by using information technology, quality measurement and reporting of performance and integration of services to care for patients to improve outcomes.

Emergence of Managed Care

Managed care experienced a huge boom in growth from the mid 1980s to the mid 1990s. HMOs increased to 63 million enrollees by 1996, from only 15.1 million in 1984. By 1999, 104.6 million people were using HMOs. During the same time, traditional indemnity insurance went from three-quarters of all patients in the mid 1980s to less than one third by the mid 1990s. By 2000, their share of the market had dwindled to single digits.

Closely related to the development of Managed Care is the concept of Case Management. Case Management is the coordinated efforts of medical professionals, i.e., nurses, doctors, specialists and other staff, to treat the overall health of a patient, rather than each specific symptom or condition. Again, the theory is that intervention and prevention at the patient level can save money for the overall system.

Nurses and Managed Care

When it comes to coordinating all the professional health care providers, along with staff, and financial managers that are intrinsically part of Managed Care delivery, experienced, passionate nurses make the best coordination officers. Their experiences on hospital and private medical practice floors entail a lot of coordination between patients, professional staff and administrative staff.

Managed care nurses are skilled multi-taskers, medical caregivers and delegators, equipping them to lead health care as it continues down toward its future in the further development of Managed Care. As the natural leaders of the medical world, managed care nurses will continue to conduct, develop and refine Managed Care and Case Management systems because they are most equipped to lend insight to the inter-workings and peripheral considerations of delivering patient care.

Riding the Future of Medicine 

So, how does a nurse ride the Managed Care wave of the future of health care delivery? It’s simple: a Doctor of Nursing Practice. Request more information or call 866.789.9809.