Managed care arrangements typically lead to providers:

Managed care arrangements often require providers to assume greater financial risk for the services they provide. Under these arrangements, healthcare providers typically enter agreements that involve capitation or negotiated payment rates, which place a financial responsibility on them to manage costs while providing care. This means that if the cost of care exceeds the predefined budget or capitation amount, the provider bears that loss, thus increasing their financial exposure.

In a managed care environment, the emphasis is on cost control and efficiency, leading providers to take measures that may limit spending while ensuring quality of care. Therefore, while providers may benefit from structured patient flows and collaborations with health plans, they also face the challenge of managing care within a fixed reimbursement or risk-sharing framework.

This aspect is what distinguishes managed care from traditional fee-for-service models, where the financial risk is less aligned with the cost of care. As a result, providers in managed care settings are incentivized to focus on preventive care and effective resource management to mitigate their increased financial risk.