Free Essay Sample «Managed Care»

«Managed Care»


The issue of Managed Care in the US health care system is one that has received controversial reactions from users, policy makers, the government and other stake holders. Originally intended to benefit care providers and policy users through enhancing quality while reducing costs, the scheme has come under attack from critics as being responsible for discouraging providers, leading to lower cost but inefficient medical care as well as raising the overall health care bill (Clay, 2011). This paper will critically evaluate the impact of managed care in Behavioral HealthCare and will find out whether MCOs (Managed Care Organizations) have had a positive or negative impact on the diagnosis and treatment of behavioral health issues.

Managed Care

Managed care was developed in the 1973 by Health Maintenance Organization Act (HMO), and since that time has been used in health care schemes. Its main initiative is to reduce cost of care, without necessarily compromising the quality of care. Consumer reports since mid-1980s to date have shown a progressively diminishing rating for the service (Clay, 2011). To be effective, the service has employed certain techniques, such as implementation of harmony in the basic care standards in order to avoid sub-standard service delivery, establishment of a provider network responsible for industry supply with the view of harmonizing logistics and quality of service, managing comprehensive service review channels, among other incentives. Managed care is most commonly provided through Managed Care organizations.

MCOs (Managed Care Organizations) are organizations that provide managed care either as hospitals, care providers, individual physicians or a combination of these. They are categorized either as group practice, management service organizations or independent service associations.

Impact of Managed Care on Behavioral Healthcare

Behavioral health as a concept incorporates all aspects of human behavior that affect their health status. It may include such elements as mental health, substance use and behavioral medicine. Managed care has had diverse effects on the state of behavioral health. In 2012, the US government announced a plan to expand managed care so as to cover behavioral health issues better (Community Counseling Services, 2013). Other than through medication, managed care is supposed to cater for behavioral health cases through therapeutic, personalized cared, informational, preventive and curative intervention.

Managed care, however, is aimed at saving costs as a first priority, while behavioral health is almost always based on intensive follow-up, inclusion, and extensive therapy-all of which have cost implications. Managed care in behavioral health will imply cutting costs through one way or another, and as the government proposal states, behavioral health benefits will require strict management if the plan is expected to bend the cost curve. One way through which managed care may reduce costs in behavioral health is through offering alternatives in the various elements covered under behavioral health (Community Counseling Services, 2013). For instance, the new plan may recommend a reduction in therapy time for behavioral health patients in order to cover a higher number of patients within the standard time. In addition, the new scheme is likely to subscribe less expensive medicine in order to reduce costs of medicine. While it is true that managed care can facilitate purchase of equally effective medicine to conventional medicine at a cheaper cost, such a plan is open to manipulation and misuse, or at least to genuine ineffectiveness owing to contrasting interests (between better health at higher costs and substandard cover at cheaper costs) that may arise with the administrators (The National Academic Press, 1997). Therefore, while it is true to expect that this scheme will cover a higher number of people and avail basic behavioral health assistance to a larger part of the population, it is  expected that the general state of this cover will be of lower standard in comparison to conventional behavioral health care.

Impact of Managed Care Organizations (MCOs) on Diagnosis and Treatment of Behavioral Health Issues

Managed care organizations are mandated with diagnosis, treatment and general cover of behavioral health cases. In this regard, the primary incentive is to offer good cover, or most comprehensive diagnosis, and best cover to their customers. At the same time, Managed Care Organizations are under performance scrutiny, while the Key Performance Indicator (KPI) is cost saving. The success of their services is measured by the regulatory authority mandated by the Federal as well as the State governments, as well as the patients covered in their schemes. A general controversy thereby arises in the fact that a high score for the MCOs with regard to cost saving translates to a low score for quality of service, and vice versa (Brisson, Frank, Notman  and Gazmararian, 1997). This means that in the general state, MCOs are likely to succeed either in terms of quality of service, or cost saving, but not both. The easier way for MCOs would appear to be cost saving, as their licensing and rating depend on the government appointed regulatory bodies. On the other hand, patients lack a strong representative body, other than survey organizations and lobby groups, which lack a comprehensive legal mandate to demand better standards in managed care (Brisson, 1997).


Managed care is an important scheme as it avails medical coverage for a larger number of needy patients while reducing costs of cover. This is particularly so in cases of general outpatient cover where most covered issues do not require expensive follow-up. Behavioral health, however, is different both in general cost and in terms of intensity of care required. MCOs operate under performance markers which depend on cost saving, while cost saving in cases of behavioral health is almost always difficult to manage due to the sensitive nature of patient dependency. Therefore, it is true to say that managed care has a mainly negative impact on behavioral health. MCOs operate under a conflicting set of requirements and are more pressured to save costs than ensure quality service, and are likely to have a negative impact on behavioral health care.



Our Customers' Testimonials

Current status


Preparing Orders


Active Writers


Support Agents

Order your 1st paper and get discount Use code first15
We are online - chat with us!