Managed Care Organization (MCO)

What is a Managed Care Organization (MCO)?

A Managed Care Organization (MCO) is a health plan or health care company that utilizes managed care as its model to keep the quality of care high while limiting costs.

As part of a managed care system, an MCO agrees to offer its services at a reduced cost, along with other MCOs in the network.

There are four types of managed care organizations or plans:

  1. Preferred Provider Organization (PPO)
  2. Health Maintenance Organization (HMO)
  3. Point Of Service (POS)
  4. Exclusive Provider Organization (EPO)

How do MCOs benefit healthcare?

Since their inception, MCOs have shaped healthcare delivery through cost reduction, preventative medicine strategies, and treatment guidelines.

MCOs have been shown to improve the outcomes of patients, and they provide cost-effective management, reducing healthcare expenditures. Additionally, patients who choose an MCO included within their health plan receive healthcare at a discounted rate, making healthcare more accessible.

An MCO is also rewarded for the care and outcome of a patient, providing a financial incentive to provide high-quality care.