13 Advantages and Disadvantages of Managed Care Plans

There is no question that the healthcare system in the United States is failing. It has become an expensive and bureaucratic field that is challenging to access if a family is not living in poverty, but they are also not relatively rich. People in the U.S. are dying at a younger age than the rest of the world, receive less care when they do see the doctor, and face more restrictions when trying to access specialist coverage. That has led to a significantly high dissatisfaction rate.

The average family spends about $1,500 more in the United States for their healthcare needs per person than households in Western Europe or Canada per person. That means a couple with four children can expect to pay $9,000 more for less healthcare access as Americans than they would if they lived somewhere else in the world.

That is why the debate about the pros and cons of managed care continues to gain momentum in the United States. Although there are whistles of socialism that float across the Internet whenever this option is proposed, the fact remains that the system is broken, and something needs to be done to fix it.

This solution attempts to bridge the gap between a 100% free-market system and the type of government-sponsored care that many Americans want to avoid.

List of the Pros of Managed Care

1. Managed care can help to lower the costs of health care.
The goal of a managed care system is to reduce the expenses that families face when they must access healthcare services by as much as possible. At the same time, there is a point of emphasis to maintain the quality of care that is available to each person who requires assistance. This advantage usually takes shape as a network of providers that can offer referrals to specific doctors to treat conditions that may arise. Assuming that the family stays within their network, the services and procedures are often provided at a discount.

2. It offers immediate healthcare solutions for families.
If you work with the healthcare system in Canada, then there are geographic locations where you might be asked to wait over 40 weeks to see a specialist about an injury. Non-life-threatening conditions may have even longer waits to endure. That is why one of the most significant advantages of managed care is that it allows families to have immediate access to a doctor if they require it. Although there can be a high price to pay to receive these services, you can visit a doctor anywhere and have confidence in knowing that you will receive expedited services for your health need.

3. There is better information management available through managed care.
In the 1990s, trying to transfer your medical information to a different provider in the United States was problematic at best. If you were lucky, then your doctor would give you permission to take a copy of your file to the specialist or new doctor that you wanted to see. Many people simply went to the new office and filled out their own file to the best of their knowledge. Now that we have networks of managed care available that use EHRs, it is easier than ever before to transfer specific medical information from one provider to the next. All it takes is a single authorization to ensure that everyone who needs to know about what is going on can have access to the data they need.

4. Managed care can also help to keep families together.
The best healthcare solutions occur when doctors and patients can form close relationships. This process makes it possible for the medical provider to identify potential health issues before someone even realizes that there may be a threat to their wellbeing. When this connection does not exist, then care providers may not have access to all of the data they need to formulate an accurate diagnosis. The system of managed care that exists in the U.S. makes it possible (under regular circumstances) for an entire family to visit the same doctor. That reduces the likelihood that necessary appointments will be skipped.

5. Patients are guaranteed a specific level of care.
The Daily Mail reported on the story of Shamus Burns in 2009 when he found an unusual lump in his groin. After seeing his general practitioner, he was told that it was just a small hernia. About 25% of men experience this health condition (compared to just 3% of women). Over 100,000 operations are performed in the UK to correction this issue annually. Outside of managed care situations, many providers are taking a watchful waiting approach instead of an immediate surgery, only intervening if pain develops or the hernial grows.

Thanks to the processes involved in the managed care system, you can elect to have a non-required surgery to correct this issue if you feel that it is bothersome, even if your general practitioner thinks that a different solution is necessary.

6. You have a specific guarantee of care when using the managed approach.
Although some might think of managed care as a universal healthcare option, it would be more accurate to describe it as a method of access that allows you to receive a guaranteed level of quality. Medical outcomes are unpredictable, but the services that a doctor and their staff provide to you are fully in their control. You will receive access to medical professionals with specific accreditations that can help you to determine what is creating an adverse health condition, and then develop a treatment plan to help care for the situation.

7. It is more affordable to manage prescriptions with this healthcare option.
Managed care networks often include local pharmacies within their territory to give patients access to the economies of scale. Because the medication is purchased in bulk to assist with care needs in the community, the prices that consumers pay at the counter can be reduced without cutting into the profit margins of the providers. There is usually discount or sliding scale options provided at the same time to provide assistance for low-income families or those without insurance.

List of the Cons of Managed Care

1. Managed care can often extend the wait times for all patients.
One of the most common complaints that people have about universal healthcare is that it extends the waiting time that people must endure to see a doctor for routine conditions. Even when facilities leave emergency appointments open for as-needed healthcare problems, it can sometimes take weeks (or months) to see your general practitioner. This happened in the United States when the Affordable Care Act was fully implemented. In some rural communities in the state of Washington, the wait time to see a doctor when from four weeks to 4 months.

2. This option creates a general lack of privacy for patients.
When managed care is the point of emphasis for a healthcare system, then there is a higher risk that a privacy issue will occur during the management of the patient’s information. Even when policies are in place that limit the access to this information to an as-needed basis, more people equate to additional sharing opportunities. Once the medical information of a patient is reviewed, then there is no guarantee that the data will stay private.

3. It turns people into commodities.
Under a system of managed care, patients are often treated more as a commodity than they are an individual. One look at the profit statistics for hospitals in the United States provides evidence of this potential disadvantage. In 2012, there were 5,000 short-term, general community, and non-federal hospitals operating in the United States. They posted a cumulative profit of $64.4 billion for the year, which was a 21% increase from the year before. This figure was partially led by an 11% increase in outpatient revenues, while the average profit per inpatient hospital bed was over $80,000 for the year.

How can managed care continue to push these profits? Because they can require multiple visits to address the same issue. Let’s say that a patient sees their general practitioner because they have a sore elbow. Their doctor will refer them to x-ray service, an MRI, or possibly a CT scan. Then a radiologist will look over the images before referring a potential diagnosis to the doctor. That’s when a follow-up appointment occurs. Then there may be casting, physical therapy, and other appointments to keep. Each comes with a specific charge and no guarantee that the injury will improve.

4. Managed care forces the individual instead of the doctor to advocate for their health.
A system of managed care, whether it is in a free-market system or one that is centralized, will usually require referrals if a patient requires an advanced level of care to treat their condition. This disadvantage is especially true for those who must access a provider outside of their regular network. Patients must review every bill to ensure that there is no duplication occurring. Then they may need to advocate for their benefits through their insurance provider. At the same time, there is also a need to schedule new appointments, review their medical file, and follow whatever treatment plan was implemented.

Although it is true that managed care solutions can lower the overall cost of healthcare, this outcome is usually possible because it places more of the responsibility for service acquisition and management in the hands of the patient.

5. There are specific rules which must be followed in managed care.
Whether you have a universal system to follow or are using a PPO/HMO solution, there are rigid rules that must be followed to the letter when deciding which doctor to see, what services to obtain, and which prescriptions to use. Patients who are not satisfied with their care may have the option to see a different provider, but then they would be asked to pay for those services out of their pocket. Even though there are more choices available, they are typically accessed only by those who have the means to pay for them.

6. It is a structure that can limit care to specific parties.
The system of Medicare in the United States is an excellent example of this disadvantage. The Henry J. Kaiser Family Foundation notes that over 90% of primary care physicians in the United States accept patients on Medicare, which is similar to the rates found with households who carry private insurance. Their acceptance of new patients is considerably lower, at only 72%. Medicaid acceptance is even lower, with only two-thirds of doctors saying that they accept patients with this option. Only 45% of doctors say that they are accepting new patients with that insurance type.

These managed care pros and cons provide a glimpse of what an effective healthcare system could be if the disadvantages could be managed or regulated in some way. As it currently stands, this structure typically provides more benefits to those in advantaged financial situations because they can pay for the additional options that are available. For those living at or near the poverty line, then it continues to be a wait-and-see proposition to see their doctor.