Final answer:
Managed care insurances affect physician's offices by changing the reimbursement model to a fixed fee, dealing with adverse selection impacting patient mix, and creating incentives to limit services to control the moral hazard problem.
Step-by-step explanation:
Managed care insurances have several impacts on a physician's office. One way is through the reimbursement model. In a managed care system, such as an HMO, physicians are typically reimbursed a fixed fee per patient rather than being paid for each service provided. This payment structure can incentivize physicians to limit unnecessary services to control costs.
Another impact is the phenomenon of adverse selection, which can affect a physician's patient mix. As insurance plans may attract more high-risk individuals, physicians may need to allocate more resources to these patients who may require more care and services.
Lastly, managed care emphasizes reducing moral hazard by incentivizing healthcare providers to limit services to what is necessary, potentially affecting the quantity and types of care physicians provide. Today, many physicians receive a combination of managed care payments and fee-for-service compensation, particularly for certain health conditions.