The Application of Managed Care Systems in the Healthcare Industry

Managed care is system in healthcare that conducts the quality, utility and cost of health care in an organized manner. This system utilizes contractual agreements with various institutions to deliver health benefits to the population. These contracted organizations are regarded as managed care organizations and they cater for a certain capacity of people for an agreed on amount monthly. By so doing, states can contract various health institutions to carry on the program and ease the burden of medical costs from the states.

This system also manages healthcare in a more effective and efficient way than the state does. The system's key objectives are to improve the quality of healthcare given to patients as well as adjust the health plans given to them so that they can be accommodative and affordable. Many states are trying new initiatives on healthcare that will be more promising than the traditional managed care. The new systems cater for people with chronic illnesses in a better way and they help to align payment with the quality of care that is provided.

Many bills have consistently been staged to the congress aimed at regulating managed care. Some bills target particular elements in the delivery of the system while other address bigger concerns based on the provider and consumer views on the system since it is gaining popularity. States in particular are more vibrant on the issue where they have staged thousands of bills to revise the system and how it functions. The regulation of this system however depends on the plan's sponsor. There has to be one side that bears the risk and pays for the insurance services. The federal government generally controls health care plans including the managed care system (Scott, 2014).

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The states on the other hand regulate all the insurance services which include the Health Maintenance Organizations. It is important to note that these insurances offer managed healthcare services to the purchaser. Federal governments sponsor plans that are purchased by private sectors and those that are not associated with the managed care organizations. Still, when an employer purchases and healthcare insurance from an MCO provider, the regulation of the service shifts to who bears the risk. If the MCO provider is the one to bare the risk, the state government takes accountability for the service but where the employer bears the risk, the federal government takes accountability of regulating the service (States, 2011).

The division of regulatory responsibilities between the state and federal governments emanated from the several laws and decisions made by the federal courts. The federal courts have established certain standards within the HMOs than operate under the federal government while most of the other healthcare systems fall under the state's laws. There are however certain federal requirements that state-insurers should meet even if the managed care is fully under the state government.

Regulation on managed care is vital but it varies across all states (Connecticut, 2014). Many states have regulations on healthcare that are in accordance with HMO models. This has helped them to adopt more rigorous systems that have enabled the states to respond to different emergencies and to manage health risks in a better way. The state's managed care organization is better in that healthcare systems are centralized in the same state and residents can easily access the services from the hospitals are within their states at affordable and fulfilling ways. The managed care system has also helped in development of networks in procedures of executing health care at the state level (Scott, 2014).

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