Managed care

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 (“managed care techniques”). It has become the essentially exclusive system of delivering and receiving American health care since its implementation in the early 1980s, and has been largely unaffected by the Affordable Care Act of 2010.

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. Managed care is now nearly ubiquitous in the U.S, but has attracted controversy because it has had mixed results in its overall goal of controlling medical costs. Proponents and critics are also sharply divided on managed care’s overall impact on U.S. health care delivery, which ranks among the best in terms of quality but among the worst with regard to access, efficiency, and equity in the developed world.
Before healthcare plans emerged, patients would simply pay for services out of pocket. In the period between 1910 and 1940, early healthcare plans formed into two models: a capitated plan (essentially an HMO), and a plan which paid service providers, such as the Blue Cross and Blue Shield Plans. One of the earliest examples is a 1910 “prepaid group plan” in Tacoma, Washington for lumber mills. Blue Cross (hospital care) and Blue Shield (professional service) plans began in 1929 with a prepaid plan with Baylor Hospital, spreading to other hospitals over the next several decades; these plans were largely independent of each other and controlled by statewide hospitals and physicians until the 1970s, when they became nonprofits before being converted into for-profit corporations such as Anthem.