Also known as managed care or managed health care, are services introduced in the US with the aim of reducing healthcare costs while improving the quality of healthcare. Since the beginning of its implementation in the early 1980s, managed health services have become the exclusive systems for delivering and receiving health care. The Affordable Healthcare Act of 2010 has not affected managed health services.

The enactment of the Health Maintenance Organization Act of 1973 played a very significant role in the growth of managed care in the US. Managed health services were started by health maintenance organizations, but today they are used in some private benefit programs.

Almost every healthcare organization in the US has adopted managed health services. However, this has had mixed results because the overall goal of controlling medical costs has attracted a lot of controversies. The overall impact of managed care on the quality of US healthcare delivery has divided the proponents and critics of managed care.

Managed health services techniques

Managed health services are usually delivered by a panel or network or healthcare providers. Integrated delivery systems mostly include one or more of the following:

• Emphasizing on preventive care
• Clear standards for choosing health care providers
• Financial incentives to encourage enrolled parties to use care efficiently.
• Formal reviews on the utilization of healthcare services and programs which improve the quality of services.

Services provider networks can be used to reduce costs. This can be achieved by selecting service providers who are cost effective, negotiating with providers for favorable fees and creating financial incentives for services providers.

A survey conducted in 2009 by America’s Health Insurance Plans revealed that patients opting for out-of-network providers are charged extremely high fees at times.

Other managed care techniques include patient education, case management, wellness incentives, disease management, utilization management and utilization review.  These techniques apply to benefit programs, but they are based both on the network and out of the network. Managed Indemnity is the use of managed care techniques without a provider network.

The impacts of managed health services

Just like managed IT services, the overall impacts of managed health services are still debatable. Supporters argue that managed health services significantly contributed to increased efficiency, improvement in overall healthcare standards and led to a better understanding of the relationship and quality.

They argue that there is no consistency, direct correlation between the cost of health care and its quality. They base this argument on the 2000 Juran Institute study which revealed that the cost of quality because of misuse, overuse, and waste contributes to 30% of all direct health care spending.

Evidence-based medicine is an emerging practice being used to determine the situations in which lower-cost medication may be more effective.

Critics of managed health services argue that the program has been an unsuccessful health policy. They say that:

• Health care costs have increased as a result of the policy,
• Managed health services have contributed to surging numbers of citizens without insurance cover
• Some healthcare providers have been forced to quit the industry and
• It has led to decrease in the quality of healthcare.

Others argue that managed health services mostly emphasizes on financial implications, not the health care itself.

Capitation is the most common managed health services financial management. It delegates the role of micro-health insurers to the health care providers. This makes them assume the responsibility of managing future healthcare costs of their patients. The annual costs of small insurers, like individual consumers, tend to escalate far more than the costs of larger insurers.

Professional Caregiver Insurance Risk is the term which explains healthcare finance inefficiencies which come as a result of inefficiently transferring insurance risks to health care providers. These providers are usually expected to cover such costs for their capitation payments.

Providers cannot be sufficiently reimbursed for their insurance risks without forcing managed care organizations to increase their prices. Small insurers have small probabilities of making profits compared to large insurers, and higher chances of making losses than larger insurers. The insurers normally provide lower benefits to their policyholders, and their surplus requirements are far much greater.