“Managed care” means different things to different people.
To some people, it is a type of organization, such as an HMO. To others, it refers to a variety of techniques used to improve health care quality, coordinate medical care and control costs.

Managed care is best defined by what it isn't: indemnity health insurance.
The old health insurance model, called “indemnity insurance,” simply protected people from the personal financial catastrophe that could be caused by the expenses of a major illness or injury. Routine medical treatment and preventive care generally were not covered. In addition, the insurance company usually paid for medical bills without looking into the quality or necessity of the care provided, and without questioning whether care was provided in the most efficient manner and for a reasonable fee.

Most of today's health plans use managed care techniques.
Managed care techniques have proven to be an effective way to monitor and improve medical care quality, coordinate medical services, enhance prevention efforts and reduce costs. The goal of managed care techniques is to direct the limited money that is available toward the right care, provided at the right time, in the right setting and at the right price. Under the old insurance system, payments at times were being made for care that was unnecessary, ineffective or even harmful to the patient. This approach also encouraged higher medical fees and the use of more expensive procedures, while failing to promote prevention and early diagnosis and treatment. Managed care is a way for employee health plans, government programs and health plans to simultaneously improve quality and reduce costs by becoming more actively involved in directing payments where they will do the most good and negotiating lower fees. Managed care plans have become the most popular and successful health plans on the market today. Old-style insurance policies are still available, but relatively few Minnesotans buy them.

Many different types of organizations use managed care techniques.
HMOs are one form of managed care, but not all managed care organizations are HMOs. Minnesota's managed health plans vary greatly in terms of size, location, care delivery model, market niche and health care provider relationships.

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