Managed Care Organizations and Health Programs

Managed Care Organizations
Name
Institution
Managed Care Organizations
A managed care organization (MCO) is an integrated entity that offers controlled care health programs. It is a group that works with self-insured employers or insurers to deliver health care by applying specific provider networks and particular products and services. Managed care organizations endeavor to lessen healthcare costs (US Legal, n.d.). MCOs have shaped healthcare performance in the United States since the 1970s. They have executed their mandate through treatment guidelines, financial provisioning, and preventative medicine strategies.
A managed care system was established to manage health care quality, utilization, and cost. The system works through such plans as Health Maintenance Organizations (HMO), Preferred Provider Organizations (PPO), Point of Service (POS), and Exclusive Provider Organization (EPO) ("Managed care introduction," n.d.). All these plans are designed to meet specific patient needs. In managed care organizations, the employer and the managed care system negotiates a fixed cost per enrollee and the health services rendered in the agreement. Through the plans they offer, they reduce health care expenditure while offering improved care quality. Using selective contracting, the managed care organization contracts hospitals and health care providers at a lower cost in exchange for a guaranteed volume of patients.
Managed care organizations have various advantages and disadvantages. For instance, in the program, a patient is offered multiple coverage plans to choose from. The three types of health plans available have different co-payment rates, giving the client a flexible healthcare approach. Another benefit that clients get from the managed care system is Better Drug Costs. With the system in place, more Americans currently spend less on their prescription medication bills. The system ensures patients utilize cheaper unbranded generic drugs,...