Managed care: the dominant paradigm in US healthcare

What does "managed care" really represent--and what effect has managed care had on the healthcare market? The author describes how managed care came to be a critical market force, offers a snapshot of its proliferation, and examines its effects on the traditional payment system.     

Managed care and the scale efficiency of US hospitals

Managed care penetration has been partly responsible for slowing down increases in health care costs in recent years. This study uses a 1992–1996 Health Care Utilization Project sample of hospitals to analyze the relationship between managed care penetration in local insurance markets and hospital scale efficiency. After controlling for hospital and market area variables, we find that managed care insurance, particularly the preferred provider type, is associated with increases in hospital scale efficiency in tertiary cases. The results presented here are consistent with the view that managed care can lead to reductions in health cost inflation by controlling the diffusion of technology via improvements in the scale efficiency of hospitals. Dr. Pagán is also Director of the Institute for Population Health Policy at The University of Texas-Pan American and Adjunct Senior Fellow of the Leonard Davis Institute of Health Economics at the University of Pennsylvania. Financial support for Dr. Pagán was provided by the Robert Wood Johnson Health and Society Scholars Program. Support for Dr. Brown came from the Hispanic Health Research Center, supported by: NIH CMHD P20 MD000170-03 located at the Brownsville Regional Campus of the University of Texas School of Public Health.     

Managed care: US research evidence and its lessons for the NHS

OBJECTIVES: To review the high quality US evidence on performance of managed health care organisations and the available US evidence on specific managed care techniques; namely, financial incentives, utilisation management and review, physician profiling and disease management. METHODS: Literature searches were conducted using numerous databases including Medline, Embase, the Social Sciences Citation Index and the National Health Service (NHS) Centre for Reviews and Dissemination library. For inclusion of evaluations of overall performance, studies had to use a comparison group (typically fee-for-service patients), make appropriate statistical adjustments for differences between groups, and be published in a peer-reviewed journal from 1980 forward. For assessments of techniques, less-demanding inclusion criteria reflected the paucity of generalisable literature; however, more current results were required (1990 forward). RESULTS: We identified 70 articles for systematic review, covering 18 dimensions of performance (e.g. utilisation, quality of care, consumer satisfaction, equity). The strength of the evidence varied by dimension. It was strongest for utilisation and quality. In general, managed care seems to reduce hospitalisation and use of high-cost discretionary services, to increase preventive screening, and to be neutral in terms of patient outcomes. As for specific techniques, we identified 19 articles for review, but limitations of these studies prevented our drawing any definite conclusions about techniques' effectiveness. This is an important, if somewhat negative, conclusion. CONCLUSIONS: Applying US evidence is complicated by an irrelevant comparator and a higher baseline of utilisation. Managed care brought Americans the familiar NHS practices of population-based health care and resource management through gatekeeping; hence, changes due to UK adoption of managed care techniques may be modest. US evidence should be used to generate hypotheses, not to predict UK behaviour.     

Managed care and the US health care system a social exchange perspective

Many countries are importing managed care and price competition from the US to improve the performance of their health care systems. However, relatively little is known about how power is organized and exercised in the US health care system to control costs, improve quality and achieve other objectives. To close this knowledge gap, we applied social exchange theory to examine the power relations between purchasers, managed care organizations, providers and patients in the US health care system at three interrelated levels: (1) exchanges between purchasers and managed care organizations (MCOs); (2) exchanges between MCOs and physicians; and (3) exchanges between physicians and patients. The theory and evidence indicated that imbalanced exchange, or dependence, at all levels prompts behavior to move the exchange toward power balance. Collective action is a common strategy at all levels for reducing dependence and therefore, increasing power in exchange relations. The theoretical and research implications of exchange theory for the comparative study of health care systems are discussed.     

Managed care and infant health: an evaluation of Medicaid in the US

In this study, we examine the effects of Medicaid managed care (MMC) on prenatal care utilization, infant birth weight, pre-term birth, and use of cesarean section in the United States. We obtain separate estimates of the effect of primary care case management managed care programs and health maintenance organization managed care plans on these outcomes. The results suggest the following: among white, non-Hispanic women, MMC was associated with a 2 percent decrease in the number of prenatal care visits and a 3-5 percent increase the incidence of inadequate prenatal care; MMC was associated with a significant increase in the incidence pre-term birth for non-Hispanic white women, but that this association does not appear to be causal; and MMC had no association with the incidence of cesarean section.     

Managed care: the next generation

Managed care today affects most Americans. Of the 160 million Americans receiving employee coverage, 120 million are in a managed care setting. HMO development to date has been driven by the desire to reduce health benefit costs for employers. Employees, the real consumers, perceive a clash between "good care and good profits." Health plans have generated profits by reducing utilization and keeping a portion of the savings. In the future, market conditions will force plans to develop new ways of maintaining profitability. Also, plans will survive by focusing on factors that matter most to consumers-such as overall care quality and access. Care systems that combine the benefits of open-access systems with the benefits of point-of-service products represent the next generation of consumer-driven healthcare.     

Community-oriented primary care: an examination of the US experience.

Community-oriented primary care (COPC) represents a specific variation on the general primary care model. Seven case studies from vastly different health care settings were examined and this report describes the diversity of expression of the principles of COPC observed. The results suggest that COPC is not limited to publicly funded programs, but can find expression in the private sector as well. The organization of financing and the lack of feasible quantitative tools hinder the full development of the model.