What does "managed care" refer to in health insurance?

Managed care refers to a system designed to arrange healthcare services through a network of providers to facilitate cost-effective, high-quality care for patients. This approach emphasizes coordinating patient care and maintaining control over healthcare costs. Managed care programs often utilize various strategies, such as requiring members to choose providers from a designated network, pre-authorization of services, and implementing care management techniques to ensure that patients receive appropriate levels of care while also minimizing unnecessary expenses.

This model contrasts with more traditional insurance frameworks, where patients may have a broader choice of providers without the structured oversight of cost control, potentially leading to higher overall expenses for both patients and insurers. In managed care, the emphasis is on preventive care and the efficient use of resources, which can help manage overall healthcare costs while still aiming to deliver quality health services.