MEMORANDUM ON MANAGED CARE
TO: Dr. Forney Fleming and the Class of Fall’14 for American Healthcare System
FROM: Iyappan Somasundaram
DATE: September 10, 2014
RE: Managed Care, Markets and Rationing Briefing Paper MANAGED CARE: An organized way to deliver healthcare services by efficiently utilizing healthcare resources to provide quality patient care. Managed care principles have been used for over 100 years in the U.S. The major goals of managed care include improving quality and accessibility of health care, improving outcomes and overall quality of life for patients and containing costs. The growth of managed care in the U.S. was spurred by the enactment of the Health Maintenance Organization Act of 1973. The organizations that use the above techniques or provide them are called “MCO” or “Managed Care Organizations”. Managed Care organizations are broadly classified into two categories viz. HMO, PPO & POS. During the last quarter of the 20th century, HMOs emerged as an important alternative to traditional medical indemnity insurance plans, and largely supplanted them. This was largely known as the “managed care revolution”. HMOs have had a profound effect on every aspect of the practice of medicine-professional, scientific, social, economic, and legal.
HMO (Healthcare Maintenance Organizations): HMOs are comprehensive health care delivery systems that offers a wide range of healthcare services through a network of providers who agree to supply services to members. With an HMO you'll likely have coverage for a broader range of preventive healthcare services than you would through another type of plan. As a member of an HMO, you'll be required to choose a primary care physician (PCP). Your PCP will take care of most of your healthcare needs. Before you can see a specialist, you'll need to obtain a referral from your PCP. HMO plans typically