A Discussion on a Managed Care Organization

A managed care organization refers to a healthcare delivery organization that provides patients with quality healthcare in a cost-effective way while maintaining the standards of the industry (Ferenc, 2014). However, the following are the characteristics of a managed care organization. First, a managed care organization exhibits accountability for quality and cost. The promise of a managed care organization to healthcare purchasers is cost savings. The managed care organization monitors and control healthcare resources, and prevents unnecessary utilization of resources by requesting prior authorization for expensive drugs and procedures.

Second, participants of a managed care organization share the financial risks. The financial and contractual link allows shareholders and members of a managed care organization to bear financial risks involved (McConnell, 2010). Similarly, they have control or influence over medical decisions such as the use of services and costs incurred. Third, a managed care organization limits on choice of providers. The plan requires participants to use predetermined healthcare provider (McConnell, 2010). Failure to use providers affiliated with the plan would result in members paying additional costs. The fourth feature of a managed care organization is quality improvement initiative. The organization ensures proper selection and monitoring of providers to ensure they consistently deliver quality care.

Regarding the future of a managed care organization, my prediction is that it would still be around in another 10-20 years. Currently, managed care organizations are the primary economic and social choice in the country. The healthcare delivery system would be in existence for another 20 years because of its ability to manage a larger proportion of cost and care in the United States. The organization controls the utilization of healthcare resources (Mullner, 2009). Patients would like to utilize healthcare providers that save their costs; therefore, they would prefer using a managed care organization to provide quality care in a cost-efficient manner.


Ferenc, D. P. (2014). Understanding hospital billing and coding. St. Louis, Mo: Elsevier.

McConnell, C. R. (2010). Umiker’s management skills for the new health care supervisor. Sudbury, Mass: Jones and Bartlett Publishers.

Mullner, R. M. (2009). Encyclopedia of health services research. Thousand Oaks, Calif: Sage Publications.


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