12 Advantages and Disadvantages of Managed Care

Managed care is the most common form of health care in the United States. It is available to individuals in three common formats: preferred provider organizations, health maintenance organizations, or point-of-sale care.

The primary advantage of managed care is that it provides health care solutions for people whenever they want to speak with a medical provider. Immediate services can be rendered, allowing people to take their care into their own hands with a reasonable level of certainty.

This access does come at a disadvantage. Without health insurance, the costs managed care can be extremely high. In the United States, CNBC reports there are nearly 650,000 bankruptcies declared every year because of medical bills that are owed.

Here are additional advantages and disadvantages of managed care to consider.

What Are the Advantages of Managed Care?

1. It lowers the costs of health care for those who have access.
The goal of a managed care system is to keep the costs of health care as low as possible without sacrificing the quality of the care that is given. This is done by creating a network of providers that can provide care and referrals whenever there is a health need which needs to be addressed. When people stay within their network for care, procedures and services are usually provided at a discounted rate.

2. People can seek out care from within their network.
Referrals can be made quickly when services or procedures need to be completed and there is a network provider. Someone can visit their primary care provider one day, get a referral to a specialist and make an appointment for the next day, and potentially have a procedure completed the day after that. The speed at which managed care can provide an outcome is incredibly fast when it is well-managed by the patient.

3. Information moves rapidly within a network.
In the past, a patient would need to take copies of their medical records with them when referred to a specialist. If they did not, then they’d need to give their authorization to have their medical file transferred to the specialist. With the modern structures of managed care, one single authorization allows the network to access your file when seeing a provider. Even if your primary care provider is in one city and your specialist is in another and with a different company, you can still instantly access your data so that a treatment plan can be developed.

4. It keeps families together.
Managing health care requires the development of a relationship between patient and provider. Without this relationship, doctors and care providers don’t have all the information that may be necessary to make an accurate diagnosis. Because patients can choose their providers within a network, it is much easier to have an entire household or family see the same doctor.

5. There is a certain guarantee of care within the network.
Managed care networks require their providers to pass various accreditation processes so that patient care can be provided as effectively as possible. Although there is sometimes a push to hire younger, more inexperienced providers as a cost-savings measure, the accreditation mandate still provides patients with the peace of mind knowing that there must be at least a certain minimum guarantee for the care that they need.

6. Prescription management is much easier.
Many networks work with pharmaceutical agencies to ensure that needed prescriptions are available and affordable to those who need them. This process simplifies the refill process and, in some instances, can even lower costs.

What Are the Disadvantages of Managed Care?

1. It limits care access for those who do not have insurance or provider coverage.
If you’re poor and living in a system with managed care, then your options are limited. Many people in this situation are forced to go to an emergency room for care because it cannot be denied there. Finding a provider in private practice is virtually impossible, even with sliding scale fee schedules, when there is an inability to pay for health care services.

2. The rules of managed care are extremely rigid.
In a system of managed care, your options are very limited when it comes to choosing your own doctor. Even if you’re not fully satisfied with the care that you are receiving, you may not have another in-network provider that can be accessed through your HMO or PPO. If you want a second opinion, then you’re forced to go out of your network and your insurance will not typically pay for that expense.

3. People are forced to advocate for themselves.
Because referrals are necessary for advanced levels of care, especially if they must go outside the network, people must be extremely proactive and aggressive as they advocate for their health care. They must follow-up with their insurance provider to ensure out-of-network procedures are authorized. Scheduling, appointment follow-ups, file reviews, and treatment plans require intense personal attention to make sure the best possible outcome can be achieved. Managed care can lower costs, but it also increases the personal time involved in making sure the right care is received.

4. Patients often come down to dollars and cents.
Common complaints within the managed care network involve unreasonable services being offered by medical providers. Patients complain that their doctors order needless tests to maximize the billing that can be submitted to their insurance. Some patients complain that their doctors refuse to order tests that may be needed to avoid needing to send them out-of-network for care. Add in the pre-authorizations that an insurance provider may require before a treatment can begin and it makes health care seem like patients are products instead of people.

5. There is a loss of privacy.
Managed care organizations receive summaries of a patient’s medical file as part of the treatment planning and payment process. This creates a lack of privacy in regards to individual medical issues or concerns that take place. The information is intended to stay private, but there is no guarantee that it will remain private once the data has been reviewed.

6. Busy networks can have long wait times.
Since the passing of the Affordable Care Act, more patients have been accessing local networks to receive care. Without more doctors entering those networks, longer wait times for appointments have become necessary in the busiest networks. This can make it difficult to speak to a doctor about regular checkups or to get kids in for their required vaccinations because some networks schedule appointments up to 6 months in advance.

The advantages and disadvantages of managed care show that it can be an effective system of health care management, but it must be proactively managed with constant attention to be beneficial. For those who are on the lower end of the socioeconomic spectrum, this can be a difficult action to take.

Blog Post Author Credentials
Louise Gaille is the author of this post. She received her B.A. in Economics from the University of Washington. In addition to being a seasoned writer, Louise has almost a decade of experience in Banking and Finance. If you have any suggestions on how to make this post better, then go here to contact our team.