The Affordable Care Act and Managed Care Organizations

The Affordable Care Act and Managed Care Organizations

The Affordable Care Act and Managed Care Organizations 150 150 Peter

The Affordable Care Act and Managed Care Organizations

Discussion Questions:
Before beginning work on this discussion forum, please review the link ‘Doing Discussion Questions Right’ and any specific instructions for this topic.

Before the end of the week, begin commenting on at least two of your classmates’ responses. You can ask technical questions or respond generally to the overall experience. Be objective, clear, and concise. Always use constructive language, even in criticism, to work toward the goal of positive progress. Submit your responses in the Discussion Area.

The term ‘managed care’ refers to several different forms of healthcare provision intended to ensure quality care for people in America at lower costs. In 1973, the Health Maintenance Organization Act was signed by President Nixon and funding for HMO expansion was provided to employers willing to provide health insurance for employees. HMOs were the first true form of managed care.

MCOs have gone through many changes over the years, some of which have been beneficial and others that have not been successful.

After a thorough research of credible sources from the South University Online Library and the Internet, please answer the following questions:

What is the purpose of an MCO?
What are the major differences between MCOs, Health Managed Organizations (HMOs), Preferred Provider Organizations (PPOs), and Exclusive Provider Organizations (EPOs)?
MCOs provide monetary incentives to physicians who keep the costs of caring for patients as low as possible. Do you feel it is ethical? Why or why not?

Sample Paper

Managed Care Organizations

Managed Care Organizations are the systems designed to ensure that American people access health services in a costly manner through insurance. These systems have been advanced and are still under constant regulations to enhance quality health care services to all the American people. This paper discusses the purpose of MCOs, and the major difference between MCOs, HMOs, PPOs, and EPOs.

Purpose of MCOs

The managed care organizations were designated to enhance access to healthcare services for the American people at an affordable cost. The main purpose is to reduce health expenses through modified preventive medicine strategies, financial provisions, and treatment guidelines. Through these strategies, managed care organizations have increased health outcomes. They act as guidelines for health providers in understanding their health policies, such as medical strategies, treatment procedures, and specific environments that are conducive to patients’ treatments.

Differences between MCOs. HMOs, PPOs, and EPOs

Managed care organizations are health systems with designed activities that help control costs and utilization and manage quality care through medical insurance coverage (Wang et al., 2019). They focus on four basic health delivery actors: the financers, providers, payers, and insurers, to reach their target goals. Health maintenance organizations (HMOs) entail preventive medical care services, a limited group of primary care physicians, and premiums (Namburi & Tadi, 2020). It is more restrictive, as patients are only required to choose in-network health providers for their services. This also makes it the cheapest MCOs.

Preferred provider organizations have healthcare plans that allow patients to choose out-network health providers, which might incur extra expenses (Namburi & Tadi, 2020). Therefore, it can be expensive to maintain. They provide flexibility for both patients and their providers making it less restrictive. Exclusive provider organizations allow patients to choose their providers and referrals without guidance on which one is the most beneficial (Heaton & Tadi, 2020). This healthcare plan does not also cover the out-network services.

The Reason why it is not ethical

Managed care organizations are responsible for providing medical care in a cost-effective way. Therefore, any entity connected to medical care attributes to morals and values. Therefore, physicians providing care to patients at a low cost can be going against moral, trust, and value-based care as per expectations (Doran et al., 2017). For instance, when physicians provide care at low costs, they are likely to limit their care services, which reduces patient outcomes and satisfaction. This suggests that providing incentives to these physicians is not ethical.



Doran, T., Maurer, K. A., & Ryan, A. M. (2017). Impact of provider incentives on quality and value of health care. Annual review of public health38, 449-465.

Heaton, J., & Tadi, P. (2020). Managed care organization.

Namburi, N., & Tadi, P. (2020). Managed Care Economics.

Wang, B., Liu, X., & Coustasse, A. (2019). The Use of Big Data by Managed Care Organizations.