The doctors and providers are also gambling. They are betting that the money they receive from the insurance company, plus copayments from patients, will cover the cost of care they provide under that plan and leave them, too, with a profit. And they are betting that the lower cost of managed care does not mean they will get a lower quality of care. The insurance companies set the initial odds in the managed care gamble. They decide what premiums and copayments to charge members, and they determine how much they will pay hospitals, doctors and other providers.
Consumers can reduce the odds for themselves by shopping around for the best managed care deal.
But the options are limited. Insurance companies tend to offer plans only in areas where they think profits will be high. Doctors and hospitals try to raise their odds of making a profit by negotiating rates with the managed care plans, but they don't have much leverage against the huge insurance companies. In recent years, many doctors and other providers have dropped out of some managed care plans when they decided they weren't being paid enough for their services. Managed care plans are structured to maximize insurance company profits.