Managed Care (HMOs, PPOs) (rules, rules, rules)
Health insurance companies contract with medical providers and medical facilities to provide care for their members at a reduced cost. The details of what type of health care is provided and at what cost is determined by the specific rules of the plan. Similar to home insurance, car insurance, or most other insurance, managed care spreads risk among many people, creating predictable and low costs for those covered.
Although HMOs and PPOs, and managed care in general provides good access for many people throughout the U.S., one of the single biggest drawbacks and a primary reason for talk of needed change, is the administrative costs of these programs. Hundreds of rules define who can receive care, where that care can be received, and what type of care can be given. Millions of dollars are spent every year assuring that the right people get the right care in the right place at the right time at the right cost. Rules often change annually, or more frequently, and keeping up with these rules takes a significant amount of time for everyone involved.
HMOs and PPOs work for individuals, but they only contribute to the fragmentation and administrative costs of our current system. And, increasingly, fewer people can afford them.