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Different cost containment strategies used by managed care firms are:

1. The first strategy is a part of the fee for service plan. Under the cost containment strategy of this plan, the onus for saving money lies on the consumer. The consumer can save money by reducing those visits that are unnecessary as well as elective. This is because the consumers are themselves financially responsible. The expenses of self-referred care are offset by charging higher premiums from the consumers under the fee for service plan.

2. The second strategy is a part of the preferred provider organization plan (PPO). Under this plan, providers are selected only if they agree to provide services at a discounted fee. Costs are contained as this entails lower payment to providers for the majority of the used services.

3. The third strategy is a part of the health maintenance organization (HMO) model. There will be no negotiating fee for the service paid to the provider. Rather the provider will be incentivized and will be paid a bonus that will be commensurate with the reduction in the use of services.

The fee for service and the capitation payment systems affect the alignment of physician and patient desire as under the fee for service method physicians incentive are in line with those of patients. Whenever a patient requests for a procedure the physician is most likely to give it. Under the capitation method, the physicians have an incentive to deny care to minimize the costs. Thus under the capitation method, the alignment of physician and patient desire goes out of line. In other words, they are not aligned.

Regarding the future of managed care in the U.S., it looks uncertain. This is because even though the future will be decided primarily in private markets the public policy will play a very important role. There will be rapid advances in medical technology and this will create unwanted pressure on health care expenditures.