Managed care

What is managed care?

The managed care health insurance model was developed as a method of containing health care costs. The managed care system is based on the concept of trading a reduced level of reimbursement in exchange for directing patients to contracted network facilities and physician practices. Resulting largely from the impact of costly traditional or indemnity plans in the 1980's and 90's, managed care plans were developed to save insurance companies and consumers money. Since managed care allows insurance companies more control over the payment and utilization process, HMO, PPO and POS products have penetrated more than 90 percent of the Chicago market.

HMO plans

Under the standard HMO plan, individuals must choose a physician as their primary care physician, or PCP. As a "gatekeeper" for medical services related to the patient, only the PCP can authorize patient referrals to other providers for specialized care or tests. Should the patient choose to use any non-referred physician or facility, the HMO will not provide any benefit coverage. The goal of this type of medical plan is to be more effective in controlling and monitoring treatment costs. To some, significantly lower premium costs may outweigh the perceived negatives of an HMO.

PPO plans

A PPO plan, in contrast, allows a person to see any physician they like. Maximum benefits are paid only if the member utilizes a physician/facility within their contracted (PPO) network and complies with any applicable policies or procedures required by the PPO. Each member receives access to a directory of contracted providers either through their employers or the Internet to assist them in choosing the appropriate medical provider. In a PPO, participants do not choose a primary care physician, and there is no referral process.

POS plans

POS plans were developed from the HMO and PPO plans and allow a patient to use in-network or out-of-network providers and still receive some level of benefit. In-network benefits are designed like an HMO in that members must go through their PCP to get a referral for any service (such as elective surgeries, specialist visits). By doing so, members are usually liable for a small copayment and/or coinsurance amount. If patients choose to go out-of-network by not utilizing their PCP, they will have larger out-of-pocket expenses similar to what they would experience as an out-of-network benefit under a PPO.

In short, plans with few restrictions, like PPOs, tend to offer greater choices at higher patient costs, while plans that limit provider choices tend to have lower costs to the members and a lower premium for employers.

Managed care at Children's Memorial

Since its beginning, managed care has played a significant role at Children's Memorial Hospital. Currently, the managed care patients served at our facility has grown to approximately 50 percent of the hospital's total patient volume, with a portion of the remaining population covered under managed care Medicaid HMOs.

Managed care contracts at Children's Memorial

Click here for a listing of managed care insurance partners.

The managed care departments at Children's Memorial

The managed care department at Children's Memorial Hospital is organized into two specific areas: managed care operations and managed care contracting. Both areas work closely with other departments and external entities to minimize patient issues associated with their managed care plans while at the same time maximize reimbursement and streamlining operations.

The managed care department hopes to use this page as a sounding board to answer general questions related to managed care at Children's Memorial and elicit feedback about what you would like to see on this page. Please send an e-mail to smookeen@childrensmemorial.org. Unfortunately, questions regarding access to Children's Memorial through your health insurance carrier and questions regarding coverage and benefits can only be answered through your health insurance representative.