Integrated Care

In health care, component management is the practice of separately managing individual cost drivers, such as prescription drugs, hospital admissions and doctor visits, instead of considering the underlying health issues of patients or total mix of features in a health care plan.

Through component management, health care plans try to lower costs by making changes specific to a cost driver. When prescription drugs are managed as a separate component, for example, there is no consideration given to the effects of appropriate drug use on the use of other medical services.

Restricting drug use through formularies or higher copayments might result in lower utilization of medicines, but studies have found that doing so can create higher costs through increased hospitalization and other health problems.