MEDICINE: Types of managed care organizations and how they differ

Running head: HEALTH AND MEDICINE
Healthcare
Name:
University:
Course:
Tutor:Date:

Types of managed care organizations and how they differ
Managed care involves health insurance companies contracting medical facilities and providers of health care to avail care to members at a cheaper rate. Their main aim is to administratively control cost and quality of medical services provided to their covered customers. These plans cover all or some costs of acquiring health care services. Members are required to get services from a stream of health providers who are approved by the specific insurance company. On the other hand, some plans permit members to get services from providers who are not approved thus providing less cover.
There are four main types of managed care organizations and they all differs in terms of cost because the more flexible the plan is, the higher the cost and vice versa. They are:
Health maintenance organizations restrict their care to providers who are within the network. It was established in 1960s by Dr. Paul Elwood. It is a coordinated system of delivery that incorporates both the delivery of medical services and financing to enrollees. Each and every enrollee is assigned a primary care physician who attends to members under him/her .if a patient needs special care he/she is referred by the physician to a specialist. However, if services are provided by a physician not approved by the organization, they are not covered (Hansen, 2006). In order to prevent services which are not necessary and also costs, health maintenance organizations have put into place refund systems among other methods.
Preferred provider organization aims at lowering medical costs by signing a contract with health care providers. Each provider in the network agrees to provide low cost services than the usual reimbursement charges. There are specific standards to be met by network providers in order to fit in the program. These organizations get funds by charging access costs to the insurance company. Unlike in HMO, PPO does not charge any fee when the service is being rendered instead it deducts later. PPO has been found to be the least expensive among the other plans. There are two types of PPOs i.e. a “gateke...