Broadly defined, managed care plans reimburse providers a fixed (capitated) fee per patient, reducing the marginal incentive
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Question:
Broadly defined, managed care plans reimburse providers a fixed (capitated) fee per patient, reducing the marginal incentive to provide services. As opposed to fee-for-service plans, in which each service is reimbursed, managed care removes incentives for overutilization.
Investigate the evidence for managed care plans reducing expenditures.
Why might a simple comparison of expenditures between fee-for-service and managed care plans be misleading? You may draw evidence from the private insurance industry of Medicare Advantage (relative to traditional Medicare) or both.
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