Question

Explain the growth of managed care that began in the 1980s.

Answer 1

Managed care began to grow after the failure of the Maintenance Organization Act, 1980, employers where no longer able to afford to carry the burden of increasing health insurance premiums. The profits of their company were threatened, and they started switching from traditional health insurance to managed care plans. Competition led to new forms of managed care plans, such as the preferred provider organizations (PPOs) emerging during 1980. The main driver: was managed care's ability to control the costs.