Firstly, it is important to note that managed healthcare or managed care is a delivery method framework designed to improve the healthcare system in the United States. It is “an organizing principle of care delivery that aims to upgrade the patient’s experience of services through enhanced coordination across and between settings” (Jankowski et al., 2021, p. e007800). A thorough analysis reveals that it first began to be practiced in the U.S. due to the Health Maintenance Organization Act of 1973 (Winthrop et al., 2019). It seeks to reduce the costs of healthcare by enabling outpatient surgery cost-sharing incentives, creating inpatient admission controls and providing incentives for physicians and their patients to choose cheaper care formats (Winthrop et al., 2019). The core techniques of managed care include patient education, preventative care, disease management, and provider network incentive (Winthrop et al., 2019). Cost-sharing is done through reference price schemes for insurers to cover only a specific price amount and high-deductible health plans offered by insurers to reduce costs.
As a result, managed care has facilitated the transfer of health services to outpatient and other nontraditional settings of care since they are cheaper than traditional inpatient hospitals. Key health insurance organizations create a network of providers to which the patients are directed. Since high-deductible health plans and reference price schemes incentivize the use of low-cost healthcare services, outpatient care formats become more attractive due to their significantly lower prices. Other nontraditional settings of care are made more appealing options as well if they are cheaper than traditional inpatient settings (Winthrop et al., 2019). Stricter control over lengths of stay and inpatient admissions makes it more difficult for patients to have their insurance cover inpatient alternatives of care. Such arrangements can be made only under a specific set of circumstances and conditions, where serious healthcare services are necessarily unavailable in outpatient settings.
Secondly, the overall impact that managed care has on the access, financing, and delivery of healthcare in the United States is positive despite some criticism. It is stated that “the health spending slowdown associated with the managed care revolution in the 1990s suggests that managed care may have been successful in controlling health care spending” (Pinkovskiy, 2020, p. 59). In other words, the most significant indicator of managed healthcare was the fact that it was able to control price surges. It was found that “restricting managed care causes a large and significant increase in hospital spending, which cannot be explained by changes in hospital market concentration” (Pinkovskiy, 2020, p. 59). Therefore, both financing and accessibility factors of managed care improved primarily due to more extensive use of outpatient and nontraditional care settings. Since the latter two tend to be less expensive compared to inpatient hospitals combined with insurance plans incentivizing their use, healthcare service costs decreased or did not increase drastically. These changes increased access to health services as well as facilitated the financing of low-cost alternatives.
Moreover, the delivery of healthcare in the U.S. has fundamentally changed as a direct result of managed care. It enabled health service delivery through integrated delivery systems, which are built on the basis of collaboration and cooperation between various elements and parties of a larger provider network (Wong, 2020). In other words, there is a group of healthcare facilities and designated doctors comprising the provider network, and the patients are incentivized to use their services primarily. This means that individual provider does not need to compete with each other since they are part of a network. They can focus on delivering care within the price range negotiated by the insurer instead of engaging in a compromise of quality or attempting to offer more expensive solutions.
Thirdly, the role of managed care in promoting health is positive since it incentivizes patient education, preventative care, wellness programs, and disease management. It is derived from a simple logic since preventing a health issue is cheaper than treating it at a later stage. Due to the fact that managed care heavily emphasizes the cost reduction of healthcare services, it is only natural for providers to actively engage in preventative care. It was found that managed care improved the prognosis for acute myocardial infarction survivors (Jankowski et al., 2021). Similar prevention and disease management improvements were observed among nontuberculous mycobacterial lung disease patients and people with Alzheimer’s disease (Winthrop et al., 2019; Wong, 2020). It is evident that it works outstandingly at preventing disease complications and exacerbations by educating patients on how they can prevent developing illnesses.
Thus, one can see that the managed care framework was successful at demonstrating that it can excel at preventing disease complications and hospitalizations. The reason is that even a mixed or partial integration of managed care provided positive outcomes for the patients. For the quality of care metric, it is evident that the key emphasis of managed care on prevention makes it more appealing since it delivers better patient outcomes. Cooperative provider communication and their effort coordination enhance both the quality of delivery as well as access to care.
References
Jankowski, P., Topor-Madry, R., Gasior, M., Ceglowska, U., Eysymontt, Z., Gierlotka, M., Wita, K., Legutko, J., Dudek, D., Sierpinski, R., Pinkas, J., Kazmierczak, J., Witkowski, A., & Szumowski, L. (2021). Innovative managed care may be related to improved prognosis for acute myocardial infarction survivors. Circulation: Cardiovascular Quality and Outcomes, 14(8), e007800. Web.
Pinkovskiy, M. L. (2020). The impact of the managed care backlash on health care spending. The RAND Journal of Economics, 51(1), 59-108. Web.
Winthrop, K. L., Marras, T. K., Adjemian, J., Zhang, H., Wang, P., & Zhang, Q. (2019). Incidence and prevalence of nontuberculous mycobacterial lung disease in a large U.S. managed care health plan, 2008–2015. Annals of the American Thoracic Society, 17(2), 178-185. Web.
Wong, W. (2020). Economic burden of Alzheimer disease and managed care considerations. The American Journal of Managed Care, 26(8), 177-183. Web.