solution, but no one has been able to come up with one yet. Many different things have been
tried, but none have put a cease to the exorbitant costs, which most believe to be the main
problem. Out of everything tried, the most recent and popular system is known as managed care.
Managed care is the most common form of health insurance in the United States, and provides
more a cost efficient coverage than paying a fee-for-service charge. However, it is also a very
complicated system. Over the next few pages I am going to try and go over the main parts of the
managed care structure. In the end, I am going to decide the strengths and weaknesses of this
system, and decide whether or not I think it will be the answer to our system. First I am going to go over exactly what managed care means, as simply as possible.
Managed care is an organized approach to delivering a comprehensive array of health care
services to a group of enrolled members through efficient management of services needed by the
members, and negotiation of prices or payment arrangements with providers. It has two main
functions; first it integrates the functions of financing, insurance, delivery, and payment with one
organizational setting, and it also exercises formal control over utilization.
Now I am briefly going to go over the history of managed care. Managed care dates back
to as early as 1882. Northern Pacific Railroad Beneficial Association was one of the first
employers to offer health care coverage. In 1910, the Western Clinic in Tacoma, Washington
offered medical services through its providers for a premium of only $.50 per month, which
served lumber mill owners and employees. In 1929, Blue Cross was originated when Baylor
Hospital in Texas agreed to provide coverage by the case on a prepaid basis for some 1,500