We have analyzed and study the major player of this sector, National Health Insurance Company- Daman. We have explored their plans and operations. We have also tried to discuss the ever lasting argument, if Managed Care really helps to cut cost and how managed care has helps in improving the standards of patient’s care. We have tried to understand these arguments with the economic theories presented by a number of researchers and tried to highlight the major issues related to it.
It is a widely accepted that the managed health care plans including health maintenance organizations and insurance providers reduce costs while offering high level health care services and facilities. But still, it can be argued that they had no contribution towards reducing national health expenses of the government. The practices of purchasers including government and employers along with the tax laws and other market imperfections have reduced the demand for real cost containment and reducing the managed care plans of an enough incentives to cut cost and price (Enthoven, 1993). These conditions can be corrected further while managing the competition in an effective manner and executing a complete plan for achieving optimal targets.
According to a number of economists, the effect of insurance on incentives can be responsible for these factors. People are more reluctant towards the risks as the illness and the treatment cost are uncertain factors. These have lead to the requirement of insurance. But the insured people approaches for more care while their physicians support them in doing so.