Managed Care: What It is and How It Works

Abstract

Managed Care: What It Is and How It Works, by Wendy Knight (Aspen Publishers Inc., 1998). As suggested by the title, Managed Care: What It Is and How It Works is an introductory tome designed for professionals unfamiliar with the managed care concept. As described in the preface, the book's intent is to give professionals, both in health care organizations and in nonhealth industries that are increasingly interfacing with managed care companies, a broad overview of managed care without excessive detail. This book would also be appropriate as supplemental reading in an undergraduate or graduate-level course that includes managed health care or health insurance among its covered topics. Because of space limitations that preclude comprehensive coverage of managed care in the typical principles textbook, Managed Care could be used to fill in any gaps in a principles course as well. An interactive learning process is facilitated through the use of exercises and discussion questions found in each chapter of the book. A health care consultant with 11 years of experience in managed care operations, health care communications, and health policy authors the 255-page paperback. Despite the author's affiliation with the managed care industry, I found the book to be fairly objective, with both criticisms and acclamations of managed care throughout its pages. The book opens with a surprisingly rich history of managed care and its evolution. For example, concepts such as managed care plans and prepaid medical care had their beginnings in the 1800s. The chapter continues with the birth of health maintenance organizations in the early 1970s, including the HMO Act of 1973. It continues with the development of the managed care market throughout the 1980s and 1990s and concludes with a brief description of the market as it existed at the end of the decade. Chapter Two is loaded with definitions and descriptions of the basic models of managed care. In addition, the principal participants in managed care arrangements are covered, along with the different products and services offered by managed care organizations (MCOs). A discussion of the differences between managed care and traditional insurance is also included in this chapter. Although most of the facts contained in Chapter Two can be found in a good principles of risk management and insurance textbook, Chapter Three is packed with distinct information on the infrastructure of managed care. After reading this chapter, one should have a basic understanding of how MCOs price, market, and sell their products. The operational functions of MCOs, along with an explanation of how they provide services to customers and members, are also included here. Rating, underwriting, and claims management decisions applicable to managed care can be found in this section and are amply illustrated via four tables and three exhibits. …