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Managed Care – Unit 4, Discussion 2

Managed care is a system and contract for healthcare providers and hospitals and is agreed upon as a way of payment by the insurance companies (Ryan & Pizzo, 2017). Managed care was first introduced in the United States in the 1970’s as a way to decrease cost in the foreseeable future of rising health care cost (Chan Hong Kit, Abdul Rasid, & Md Husin, 2016). This system is a contact that is upheld by hospitals/medical providers and consists of having access of care for the patients, discussion of clear associated costs, educated clinicians, ongoing data collection and have an established standard of care (Ryan & Pizzo, 2017). This system manages cost by expelling the fee-for-service payment system and using a system that covers a span of treatment with one set fee (Brice, Kimberly, & Woodard, 2017). Brice, Kimberly and Woodard (2017) believe that getting rid of the fee-for-service will decrease the number of unnecessary tests (lab work, CT/MRI scans etc) and thus decreasing cost.

The quality of care would not be affected; healthcare providers would be paid by a salary and would have ongoing education opportunities and incentives (Brice, Kimberly, & Woodard, 2017). Chan Hong Kit, Abdul Rasid, and Md Husin (2016) conducted a study on managed care and quality of care and found a positive impact and feedback on the patient-provider relationship and found that decreasing cost of care did not have an impact on quality of care. Ryan & Pizzo (2017) also point out that in this type of system, quality of care is accomplished by the provider being educated on coding and cost of care and being cognizant of cost for the patient, while keeping the quality of care in the forefront.


Brice, R. A., Kimberly, M. & Woodward, T. (2017). eACOs: Fixing the broken triangle in health care. Benefits Magazine, 54(11), 30.

Chan Hong Kit, P., Abdul Rasid, S. Z., & Md Husin, M. (2016). The impacts of Malaysian managed care on doctor-patient relationships, ethical practice of medicine, and quality of care: A study on primary care physicians’ perception. International Journal of Healthcare Management, 9(2), 119-126.

Ryan, D. L., & Pizzo, J. J. (2017). 6 practices for effective managed care contracting. Healthcare Financial Management, 1.

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