Contract Design

One of the most important preconditions for high-quality and economically effective treatment results is the selection of suitable service providers with whom an MCO concludes supply contracts (selective contracting). The conclusion of selective contracts is so significant for managed care and healthcare management that it is considered crucial to the definition of managed care. Selective contracting means that a service purchaser is not required to cover the costs for the use of any doctor, hospital or nursing facility. On the contrary, only the services of those providers who have concluded a supply contract with the MCO are compensated. Thus, the insured’s freedom of choice is restricted when selecting service providers. On the other hand, the restriction of the freedom of choice of the service provider depends on the design of the contract. The service provider can conclude an exclusive contract, according to which they can only treat the insured from a certain MCO (closed panel). The contract, however, can also enable patients from other insurance companies and MCOs to be treated (open panel).