Managed Care

Running Head: MANAGED CARE
Managed Care
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MANAGED CARE
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Managed Care
Introduction
Managed care dominates healthcare not only in the United States of America but also in
the entire planet. It is any system of health delivery which integrates the roles of health insurance
as well as the definite delivery of care in which the application and costs of services are managed
by means like case management, gatekeeping, and utilization review (Appold, 2018). In the
United States of America, various types of managed care plans were established by three vital
factors. Such factors various ways of arranging the service delivery, choice of providers as well
as risk and payment sharing. Currently, the Kingdom of Saudi Arabia does not have managed
care and thus is exploring various avenues and legal framework to establish a well structured and
functional managed care. In this paper, I will critically analyze the concept of managed care for
the kingdom of Saudi Arabia, the advantages and disadvantages of this concept, the healthcare
sectors which are highly affected by the managed care, the impacts of managed care on facilities,
physicians as well as the patients. Lastly, I will evaluate how managed care is working and being
implemented in other countries like the United States of America.
The concept of managed care
Managed care can be defined as a process applied to deliver cost-effective health care
without restricting access or quality (Eijk & van Eijk, 2017). The concept describes a host of
healthcare payment and delivery systems, entailing Preferred Provider Organizations (PPOs),
health maintenance organizations (HMOs) and the Point-of-Service plans (POSs). Health
Maintenance Organizations (HMOs) are described as entities which offer as well as manages
health service coverage which is provided to plan members in return for a fixed and prepaid

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premium (Ryan & Pizzo, 2017). HMOs have four types of models which include group, staff,
network and independent practice association models. The Point-of-Service (POS) is a controlled
healthcare plan which offers flexibility for individuals enrolled in the plan to receive a service
from a non-participating or participating provider having the equivalent penalty or co-pay benefit
and is dependent upon the extent of the benefit expected. The aim of such a plan is to promote
and encourage the use of participating providers. Preferred Provider Organizations (PPOs) are
descried as groups of healthcare providers, either institutional or professional, which agree to
offer services to a particular sample of individuals at a generally accepted upon, fee-for-service
discounted rate. Individuals hold the free choice of providers yet are offered financial incentives
for using healthcare professionals within the healthcare organizations (Keohane, Rahman,
Thomas & Trivedi, 2018).
The concept is speedily dominating the health care delivery as well as financing in the
U.S. Most of the Americans having private health insurance are presently enrolled in various
managed care plans (Ellis, Jiang & Kuo, 2013). It is important to note that managed care
normally relies on basically on three strategies for its implementation and success, that is,
utilization review, innovative economic and selective contracting. To effectively develop
selective contracts, organizations dealing with managed care use data and information on health
claims to compare the prices which various hospitals, as well as physicians, charge for the same
service to identify the providers with lowest charges. In a very competitive environment having
numerous providers, big managed care organizations having many enrollees may selectively
contract people with individual healthcare centers and physicians and receive considerable
discounts for offering healthcare services to their members. Managed care organizations mostly
offer innovative economic incentives to physicians and patients to encourage and motivate them