Managed Care



Managedcare refers to a healthcare delivery system structured to manageutilization, cost, and quality. Although the extent to which themanaged care can influence costs remains unclear, the program plays asignificant role in healthcare costs reduction. Firstly, managed carehas spillover effects on the other sectors of the healthcare marketthus reducing the system-wide costs by increasing competition or bypromising promulgation of conservative medical practice styles(Milstead, 2008). Additionally, the managed care leads to increasedhealthcare savings owing to its ability to provide care for theenrollees in a highly efficient and cost effective manner. Indeed,the managed care lowers costs for its enrollees, primarily byreducing hospitalization and reducing costs among the non-managedcare providers. Importantly, by contracting with several types of Organizations (MCO) to deliver Medicaid programhealthcare services to the beneficiaries, states reduce Medicaidprogram costs considerably. The healthcare providers get a set amountof funds each month based on the number of people covered by theprogram. In fact, some states are coordinating a wide range ofinitiatives to incorporate care beyond the traditional managed care(Mason, 2012). These initiatives focus on enhancing care forindividuals with complex and chronic conditions, aligning paymentsincentives with performance goals in an effort to manage healthcarecosts.

Despitethe managed care ability to manage costs, the quality of healthcarehas significantly diminished. The individuals have fewer optionsconcerning the locations where they can get treatment (Milstead,2008). In this regard, in a case a managed care agency closes, peopleunder that plan must shift to other care providers under a newprogram, which interrupts ongoing treatment. In this way, careproviders often feel that the managed care program denies theirclients critical care in favor of saving money. Additionally, themanaged care leads to conflicting loyalties for the healthcare(Weissert, 2010). Providers want to safeguard quality healthcare fortheir clients. On the other hand, care providers feel motivated todeliver the least amount of care possible to realize financialbenefits. As a result, the managed care leads to a powerful potentialfor inappropriately addressing patients’ needs and thus a reducedhealthcare quality.


Mason,D. (2012). Policy &amp politics in nursing and health care (6thed.). St. Louis, Mo.: Elsevier/Saunders.

Milstead,J. (2008). Health policy and politics: A nurse`s guide (5th ed.).Sudbury, Mass.: Jones and Bartlett Pub.

Weissert,C. (2010). Governing health the politics of health policy (2nd ed.).Baltimore: Johns Hopkins University Press.