Managed care designed to fail?
June 1, 1997 2 minutes read
Managed care designed to fail?
Managed care systems may be saving money now, but their cost-containment measures and inadequate design will ultimately fail the health care consumer, write two Columbia University researchers in the Sounding Board section of April 3 issue of The New England Journal of Medicine.
Eli Ginzberg, MD, and associate Miriam Ostow argue that the 10% to 15% savings in national health expenditures accrued in recent years are "one-time" savings attributable to recruiting new enrollees from more expensive fee-for-service plans to managed care plans.
Managed care’s ability to control costs in the future will be hampered by the cost of technological advances and the larger less healthy Medicare populations they now serve.
The researchers say they agree with the prevailing view of trend observers that patients’ premiums are likely to increase.
The researchers say the issues that will affect managed care’s profits include a possible 7% reduction in the Medicare HMO-reimbursement formula by the U.S. Department of Health and Human Services, the formulation of large purchasing groups of employers that would contract directly with provider units, the establishment of HMOs by large teaching hospitals, and the affiliation of physician groups to improve their bargaining position with managed care companies.
The two researchers write that they remain skeptical of others who argue that the cost-saving potential of the managed care system will continue with a "greater reliance on capitation to pay physicians, intensified use of selective preventive services and better education of patients, and the development of clinical guidelines aimed at reducing and eliminating costly procedures with little or no potential for improving health."
In an editorial in the same publication, the Editor in Chief Jerome P. Kassirer, MD, disagrees and writes, "Managed care is likely to have a stronger presence in the future than Ginzberg and Ostow predict."
Kassirer writes that the gatekeeper approach does not work, and that a new system "tailored to the needs of the individual will win out." He states that managed care plans must do a better job showing "that they care about more than profits, that they do not skimp on care, that they support their just share of teaching, research, and the care of the poor, [and] that they no longer muzzle physicians."
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