Final answer:
Managed care is an approach to healthcare intended to control costs and improve quality by providing a fixed fee to providers for the care of enrolled patients, contrasting with a fee-for-service system. Managed care, including health maintenance organizations and the ACA, aims to combat adverse selection in the insurance market and respond to demands from an aging population.
Step-by-step explanation:
Managed Care Definition and Summary
Managed care is a health care delivery system designed to manage costs, utilization, and quality. In contrast to the traditional fee-for-service system where providers are reimbursed for each service rendered, managed care often involves health maintenance organizations (HMOs) where providers receive a fixed fee for the entire care of enrolled patients. The goal of managed care is to foster cost-effective treatment while maintaining high-quality care, mitigating the problem of adverse selection where there is a disproportionate enrollment by high-risk individuals attracted by the promise of comprehensive benefits at lower costs. Healthcare consolidation or 'merger mania' has been a response to increasing demands of healthcare, where efficiency and standardization are paramount due to factors such as an aging population. The Patient Protection and Affordable Care Act (ACA), also known as Obamacare, dramatically transformed the U.S. health care system with the intention of improving the balance between quality, access, and cost in health care.