What is a managed care organization? Based on your reading, discuss how managed care organizations attempt to control costs. What are the benefits and disadvantages associated with these cost controlling measures?

Assignments are to be a minimum of 2 full pages of text and 3 reputable references in proper APA format.

Answer preview

There are various ways in which MCOs control cost.  First, MCO reduces the amount of money paid to health providers like hospitals and physicians.  The amount of money paid to health providers is the leading cause of increasing health costs in the country. Secondly, they reduce costs by limiting access to care.  According to Shmueli, Stam, Wasem, & Trottmann, (2015), MCOs reduces the cost of health services by limiting services that a subscribed client may access within the provider network.  Alternatively, they shift to cheaper care than it would have been provided outside the network.  Lastly, MCOs encourage efficiency in health provision.  They encourage physicians to spend less time with the patient, undertake less elaborated tests, and use less expensive drugs, thus reducing the cost of service provided.

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