The Cost and Quality of Healthcare and Managed Care

Topic: Administration
Words: 273 Pages: 1
Table of Contents


The presence of managed care organizations has impacted the healthcare delivery for both managed and non-managed care patients (Maniam, 2018). Through the provision of financial incentives to the providers of healthcare, and efficiently managing patient care, managed care organizations have proven to affect the processes, the cost, and the quality of care. Studies have indicated there exists a relationship between the managed care presence in the healthcare industry and the medical expenditures that have created a spillover effect.


Managed care has generated spillover effects by creating competition in the healthcare industry, changing the healthcare delivery structure and physician practices. A high level of managed care presence in the healthcare market is associated with lower rates of medical costs, reduced physician fees, and the size and the structure of physician workforce. However, no research has linked managed care with positive care outcomes.

Under managed care, physicians are employed and placed on a salary basis like any other staff instead of on a fee-per-service basis. Through this model, the medical clinics are offered the same amount of funds regardless of the number of patients visiting the hospital. Since there is no connection between the medical service offered and the fees paid, the aim is to keep the costs down.


In conclusion, the managers of such organizations, or the non-medical personnel managing such entities often try to maintain low costs at the expense of the provision of quality healthcare (Fernandes, 2020). For instance, replacing highly trained nursing or physician employee with lesser trained assistants to save costs. Therefore, the cost and quality of healthcare have significantly declined as a result of managed care.


Fernandes R., Fess E. G., Sullivan S., Brack M., DeMarco T., & Li D. (2020). Supportive care for superutilizers of a managed care organization. Journal of Palliative Medicine.23(11), 1444-1451.

Maniam, G. (2018). Effect of managed care systems on healthcare quality of low-income women. Journal of Business and Educational Leadership, 7(1), 72-85. Web.

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