Managed care is a term that's being used very loosely these days. Not only does it mean different things in different organizations, the term itself is a misnomer. In truth, most managed care plans are actually managing costs, not care. And costs can be managed in several ways.
Health plans can also save money by forming networks of medical providers who discount their fees.
However, medical providers agree to discounts because they expect to recoup any financial loss from discounts through an increase in the number of patients. Accordingly, some health plans have to limit the number of providers in their networks and provide incentives to get subscribers to seek services from their network providers. In some plans, medical reviews are highly visible, while in others they are virtually invisible. Because reviews are often performed by insurer-employed outside reviewers, decisions to authorize or not authorize treatment appear to be imposed and often lead you to get angry at your insurer. Each of these strategies yields some savings, but none is entirely effective by itself.