Risk Management and the Role of Managed Care

Risk management is essential, especially for cost reduction in the healthcare sector. Patients with low incomes always have a challenging time dealing with unprecedented medical expenses when they get injured in an accident, fall sick, or get injured due to a catastrophic event such as floods. At the same time, some well-off people find it challenging to take care of some expensive medical treatment such as cancer. Hence taking the appropriate measure to manage such unpredicted circumstances is vital to enhance affordable healthcare services. Management care organization has a crucial role that It plays in the healthcare organization by guaranteeing that patients access appropriate healthcare in case an emergency situation takes place that may require urgent medical attention. Hence the paper discusses the significance of managing risk and the purpose of medical care organizations.

Administrative Role in Executing Risk Management Policies

A health care institute has a huge role in the administrative role and implementation of risk management policies and guarantees subordination with the qualities developed by the health care organization. In a health care institution, the administrator gauges risk by identifying and evaluating risks as a strategy of reducing harm to visitors, workers, and patients (Alam, 2016). The administrator performs his role energetically and responsively to prevent the occurrence or reduce the consequences resulting from an event. Risk identification necessitates the healthcare workers to become responsive to the risks in the environment or services.

Value of MCO in a Healthcare Institution

Regulatory statutes of a normal MCO ensure that medical care institutions offer cost-effective and quality healthcare to people. MCO regulations require health care institutes to keep the medical cost low by closely monitoring their functions and services (Ness, 2015). By regulating and preventing wastage of services, the cost is easily regulated. Additionally, MCO requires patients to get permits from their medical insurance institutions before receiving specialized treatment or being hospitalized to prevent conflicts between patients and the organization.  Risk management strategies not only do they affect patients and employees but also healthcare professionals. The purpose of a risk management strategy is to avert any monetary repercussions, and patients must be their priority.

MCO Responsibilities

Affordable Care Act and Center for Medicare Services laws require the MCO to execute exhaustive programs to enhance the billing process to detect and avert healthcare services fraud, wastage, and abuse. Medicare can be compared to free-for-service dangers transferred to an intermediary insurer from the main payer, which avail numerous opportunities for fraud, abuse, and wastage, resulting in a denial of services and organizational barriers for patients (Thornton et al., 2015). Therefore, MCO has the obligation of identifying, investigate and evaluate possibilities of fraud in health care. CMS later analyses the information and detects any abuse and fraud cases.


Risk management strategies are not only beneficial to patients but also employees and healthcare professionals. They assist patients, and medical care providers cut health care making the services affordable to patients. Health care organizations ensure that healthcare professionals utilize these strategies to provide quality and affordable services to patients. MCOs ensure that they follow up the services provided by medical care institutions to ascertain their effectiveness and detect fraud, abuse, and wastage cases.