Managed health care came into being during the mid-1980s as a response to rising health-care costs. The term "managed care" defines a prepaid health plan that incorporates access to health-care services at controlled costs. It's designed to limit a patient's access to expensive services unless considered and determined medically necessary, as well as to establish basic fees for services and health-care providers prior to services being rendered. Managed care offers consumers several choices when it comes to health care, including health maintenance organizations (HMO), preferred provider organizations (PPO) and point- of-service Plans (POS).
Health Maintenance Organization
Health maintenance organizations, also known as HMOs, are a common form of managed care, where consumers pay monthly membership premiums for various health-care services as defined by their specific health plan. Most employees today join HMOs offered by their employers, benefiting from lower out-of-pocket expenses because costs are shared by all employees enrolled in the HMO plan.
Consumers are given a list of medical professionals in a variety of fields who offer services within the network of providers offered by specific health plans or carriers. The consumer is expected to select a primary care physician, to whom he must go for care, or in order to be referred to another physician or specialist before some services may be scheduled.
Preferred Provider Organization
A preferred provider organization, commonly referred to as a PPO, gives consumers the chance to choose their own physicians from a list of health-care providers participating in programs offered by specific health insurance carriers or health-care providers. There's not a significant difference between a PPO and an HMO, except that consumers don't have to choose a primary care physician or request that their physician make referrals for specialized care. Members of PPOs pay predetermined co-pays or deductibles as long as they stay within the network of health-care providers. If a consumer chooses a health-care provider out of the network or preferred partner list, she will pay more for services.
Point-of-Service
Point-of-service managed care, sometimes called POS, is very similar to an HMO plan because the consumer must choose a primary care physician (often called a PCP). This physician literally acts like a gatekeeper, states the American Heart Organization. With a POS plan, the consumer may choose whether or not he wants to utilize an HMO or PPO for his health-care needs. POS plan members are not required to choose a primary care physician and are allowed to select health-care professionals outside the network, as is the case for a PPO -- though again, he or she may pay more for doing so. The point-of-service managed care plan is designed to offer consumers more say in their choice of providers.
Integrated Delivery Systems
Managed care also offers integrated delivery systems (IDS), which provide consumers access to a blend of health-care providers and services, such as clinics, hospitals, ambulatory surgery centers, physicians and acute care hospitals, just to name a few. Kaiser Permanente and the Mayo Clinic are examples of integrated delivery systems. Multi-specialty groups with integrated links to labs, pharmacies, doctors' offices and hospitals are designed to offer a complete circle of care, from point of contact with a physician throughout the care plan to resolution for a specific fixed dollar amount.
Exclusive Provider Organization
Managed care also offers what is called an exclusive provider organization, which, while it may be similar to a PPO, only allows consumers to receive health care from a network provider. If a person goes outside the network, all fees for services must be paid by the consumer. In addition, all care of the patient in such a plan must be coordinated and approved by the person's primary care provider.
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