Managed Care


A method by which cost containment features are applied to a health plan either by limiting the reimbursement levels paid to providers or by reducing utilization


You have probably heard the term many times. When Traditional Health Plans in the 1980s were common place, the amount of money the insurance companies were paying out was increasing very rapidly. They therefore wanted to find a way to reduce the total amount they were spending on health care. Managed Care initiates more control over the payment and utilization process, which is why you now see HMO and PPO plans prevalent in the 1990s.

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