Final answer:
Workers' compensation managed care programs benefit employers by potentially reducing insurance premiums and ensuring efficient medical resource use, while employees may receive better quality care and return to work faster. Managed care provides cost savings through negotiated rates with providers and addresses issues of adverse selection in insurance markets.
Step-by-step explanation:
The advantage of workers' compensation managed care programs for employers includes potentially lower insurance premiums due to managed care's emphasis on cost control and efficient use of medical resources. For employees, these programs can lead to better quality of care and faster return to work because of the focus on appropriate medical treatment and rehabilitation services.
Managed care systems like Health Maintenance Organizations (HMOs) operate by having a network of providers that agree to offer services at negotiated rates. As insurers have many clients, they can leverage these numbers to negotiate lower rates, which translates into savings. These savings can benefit both the employer, through decreased costs associated with work-related injuries, and the employee, by providing access to an organized and comprehensive range of medical services at potentially lower costs.
Additionally, in a managed care setting, medical care providers receive reimbursement based on the number of patients they handle, incentivizing them to allocate resources efficiently. This can help to reduce the phenomena of adverse selection, where high-risk individuals tend to utilize insurance more than low-risk individuals, ensuring a better balance of care and costs across the board for all parties involved.