Managed care as health care rationing

This article is based on the author's presentations to the New York State Governor's Health Care Advisory Board's Task Force on the President's Health Care Plan, November 22, 1993, and to a hearing of the New York State Attorney General on the experience of consumers with health insurers and health maintenance organizations, September 20, 1993. His comments deal with the effects of the Clinton health care reform proposal and other forms of managed care on those most in need of care. Particularly interesting are his suggestions for protecting the rights of health care consumers.     

Managed care, vertical integration strategies and hospital performance

Objective. The purpose of this study is to examine the association of managed care with hospital vertical integration strategies, as well as to observe the relationships of different types of vertical integration with hospital efficiency and financial performance. Data and methods. The sample consists of 363 California short-term acute care hospitals in 1994. Linear structure equation modeling is used to test six hypotheses derived from the strategic adaptation model. Several organizational and market factors are controlled statistically. Principal findings. Results suggest that managed care is a driving force for hospital vertical integration. In terms of performance, hospitals that are integrated with physician groups and provide outpatient services (backward integration) have better operating margins, returns on assets, and net cash flows (p<0.01). These hospitals are not, however, likely to show greater productivity. Forward integration with a long-term-care facility, on the other hand, is positively and significantly related to hospital productivity (p<0.001). Forward integration is negatively related to financial performance (p<0.05), however, opposite to the direction hypothesized. Conclusions. Health executives should be responsive to the growth of managed care in their local market and should probably consider providing more backward integrated services rather than forward integrated services in order to improve the hospital's financial performance in today's competitive health care market.     

Managed care: a foundation for evolution

An examination of the history of managed care organization over the past 30 years, in both private and public sectors, forms the basis for evaluating the success of such programs in meeting the expectation of both physicians and consumers. The authors point to areas that must receive special attention if managed care organizations are to satisfy the quality and cost demands of the future.