Question

1. What is managed care? 2. What was the first type of managed care plans to appear on the market? 3. How does a PPO differentiate itself from an HMO?

Answer 1

Ans) 1) The term managed care or managed healthcare is used in the United States to describe a group of activities intended to reduce the cost of providing for profit health care and providing American health insurance while improving the quality of that care.

2) The origins of managed care in the United States can be traced to the late 19th century, when a small number of physicians in several U.S. cities began providing prepaid medical care to members of fraternal orders, unions, and other associations of workers.

- The growth of managed care in the U.S. was spurred by the enactment of the Health Maintenance Organization Act of 1973. While managed care techniques were pioneered by health maintenance organizations, they are now used by a variety of private health benefit programs.

- Sometimes cited as the first example of a health maintenance organization (HMO), the Western Clinic in Tacoma, Washington, began in 1910 to offer, ex- clusively through its own providers, a broad range of medical services in return for a premium payment of $0.50 per member per month.

3) An HMO is a Health Maintenance Organization, while PPO stands for Preferred Provider Organization. The differences, besides acronyms, are distinct. But the major differences between the two plans is the cost, size of the plan network, your ability to see specialists, and coverage for out-of-network services.