Managed Care

Joyce Weil

Managed care and managed care plans typically refer to the way health care plans both provide care and pay for services provided within a network. Networks consist of providers, such as physicians and hospitals, that serve an enrolled population of individuals, also called “enrollees,” who receive such services. Introduced in the United States in the 1980s, managed care plans arose as a way to control rising health care costs and to provide coverage to a greater number of individuals. Prior to the 1980s, the most common type of health care coverage was the indemnity system, also known as a “fee-for-service” or “pay-as-you-go” plan. In an indemnity plan, individuals choose physicians and services and receive bills for costs incurred for services—much like an open market system. By the 1990s, managed care plans were the most common method of providing health care in the United States. In fact, according to estimates for ...

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