Advantages in Healthcare Management

by Jacquelyn Jeanty ; Updated July 27, 2017

The rising costs of health care can take a toll on the everyday consumer in need of medical services. As the health care industry expands through technological developments and increased demands from an aging baby boomer population, the advantages of health care management provide an effective means for delivering quality care and controlling cost factors.

Health Care Delivery System

The vast number of health care providers, hospitals and agencies has brought about the need for an organized approach within the health care industry, according to the Small Business Bible, a business resource site. The health care management approach is designed to provide medical services and treatments based on a structured delivery system. According to the University of Missouri Extension, this system uses managed care networks to organize providers, services and treatment costs.

The advantages of a structured delivery system provide a continuum of care that enables providers to share relevant information regarding patient care. In effect, health care management practices help consumers receive needed treatments and services, and reduces the likelihood of receiving duplicate or overlapping services.

Cost Controlled

Under a health care management system, insurers and providers offer medical services based on a predetermined cost structure, according to the University of Missouri Extension. By delivering services through a health care network, insurers can spread the risk of high claims payouts across a large pool of patients and providers. As a result, the overall cost to the consumer is reduced since insurers can better balance the risk factors involved, which goes toward reducing total costs for insurers.

Depending on a particular network’s requirements, patients pay a monthly insurance premium along with yearly deductibles and copayment amounts, according to the Colorado Gerontological Society. The advantages of a payment structure helps to control health care costs and enables consumers to know costs beforehand as opposed to having to pay unexpected costs for services rendered.

Plan Choices

Under the health care management system, individuals can choose from three different managed care network options. According to the Health Insurance Guide, each plan uses a pre-selected network of doctors and hospitals. Plan options differ in terms of coverage benefits allowed when participants see providers outside of their network.

Health Maintenance Organization (HMO) networks are the least expensive in terms of premium costs and the most restrictive when it comes to covering services for out-of-network providers.

Point-of-Service (POS) Plan networks are the most expensive in terms of coverage costs, which require participants to pay a certain percentage of their medical costs along with an annual deductible amount. POS plans do offer more flexibility in terms of covered services for out-of-network providers.

Preferred Provider Organization (PPO) networks combine the cost benefits of an HMO with the flexibility found in POS plans. In other words, these plans do cover services provided by out-of-network providers, though participants end up paying more out-of-pocket costs. In terms of premium costs, PPO plans are less expensive than POS plans and more expensive than HMOs.

About the Author

Jacquelyn Jeanty has worked as a freelance writer since 2008. Her work appears at various websites. Her specialty areas include health, home and garden, Christianity and personal development. Jeanty holds a Bachelor of Arts in psychology from Purdue University.