David Woods, PhD, FCPP
CEO, Health Care Media International
Adjunct Faculty, Jefferson College of Graduate Studies
More than decade ago I wrote a book for the Economist Intelligence Unit, The Future of the Managed Care Industry and its International Implications.
What's changed about managed care in 10 years? Well, certainly not public perception. In fact, in a poll at that time a solid majority of respondents believed that the quality of medical care would be harmed rather than improved by the trend toward more managed care.
Yet, despite subsequent studies showing that quality of care has not been demonstrably compromised under managed care, it is hard to find many friends of the system. The media cite horror stories about denial of care; and TV series featured doctors trying to do good despite managed care’s strictures.
Today, more than 80% of Americans insured by their employers are in some sort of managed care plan -- as are the overwhelming majority of doctors.
Alain Enthoven, PhD, a professor at Stanford University and a leading authority on healthcare systems and policy, defines managed care as a strategy used by purchasers of healthcare. Four essential principles of managed care are: selective provider contracting; utilization management; negotiated payment; and quality management.
The principal objection of patients to managed care was the prospect of being thrown out of the hospital within hours of major surgery. They also disliked the necessity of having to go through gatekeepers, typically primary care doctors, before being allowed to see a specialist.
One thing I certainly got wrong in the book was my contention that if managed care has achieved anything, it has slowed the breakneck speed at which US healthcare costs were growing. In fact, those costs have now reached a stratospheric $2.3 trillion a year.
So, according to the premise of my book’s title, I asked the question: What is the future for managed care? I answered it by saying that managed care will not only survive but thrive in the US. I also suggested that managed care would need to get away from the perception that its main function is to restrict care, but rather to supply a service to members that should include such care as is needed.
Managed care plans are seeking to rebuild damaged relationships with providers... and they're looking to shift more responsibility for payment on to users. As they move into less restrictive products they lose their ability to control costs, a fact that is likely to contribute to further premium increases, which in turn could put additional pressure on public programs.
In a recent interview, Dr Alain Enthoven told me that despite deficiencies in managed care that tend to favor fee-for-service delivery, Kaiser Permanente has prospered, he says, mainly because it has rolled out an electronic health record that has led to a cultural change both for patients and for physicians. What has impeded managed care’s progress, he says, is that employers continue to offer fee-for-service care and many have still not even tried managed care. And while managed care companies have made steady progress, employers still don't provide employees with incentives to choose economical healthcare.
Despite changes in managed care over the years, some of the original ambitious goals have not been achieved, including cost containment and universality. Some of the challenges of managed care might be obviated by passage of the Affordable Care Act. Unless the Act is significantly diluted it is perhaps the most significant change in healthcare delivery over the past decade. Gone will be denial of care for pre-existing conditions; and, for any type of insurance to work, the requirement that there be 100% enrollment is central.