The Pros and Cons of Managed Care
With every plan, there are limitations and steps that the patient and caregivers must consider in order to find the plan that best suits their needs.
Traditional health insurance coverage involves the person choosing any doctor or hospital at the time service is needed. A referral is not needed. With traditional health insurance, providers bill the person or their insurance company for each service performed. The individual usually pays a deductible and percentage of the provider’s fees and is usually reimbursed for 80 percent of the usual charges for covered services. He or she is liable for additional billing if the health plan does not pay the full charges.
There are three general types of managed care systems; Health Maintenance Organization (HMO), Preferred Provider Organization (PPO), and Point of Service (POS). HMOs contract with a network of hospitals, doctors and services to provide treatment. The person goes to a Primary Care Physician (PCP) who controls the services the patient has and does the referrals. The patient must use only the facilities and doctors in the network. In a PPO, the company contracts with a network of facilities to have a “provider network”. There is no PCP and the patient can choose services in the network. However, they do not have to use network providers. A POS plan lets the patient decide which option, HMO or PPO, at the time of service through network providers. The patient is encouraged to choose a PCP, but is not required. The patient can still use the network facilities with referral or not.
There are good plan aspects and bad plan aspects for both the patient and the caregiver. Let’s look at the advantages. In traditional insurance, the coverage is simple and straightforward. The patient can go to any facility or doctor that accepts the plan. The patient pays a deductible and is after it is reached is reimbursed 80% of eligible medical expenses. In some plans, once a certain...