MANAGED CARE REFORM: Don’t Fix What Isn’t Broke
In a commentary in today's Los Angeles Times, Glenn Melnick, resident consultant for Rand Corp. and professor of health care finance at the University of Southern California's School of Public Administration, urges caution about adopting the "more than 100 recommendations" made by Gov. Pete Wilson's managed care task force. Melnick writes, "By mandating fixed benefits and fixed practices on health plans and health providers, many of the task force's recommendations fly in the face of what helped California tame health care inflation." The recommendations also may unfairly penalize consumers, he says, by causing premiums to rise. Californians now pay "among the lowest health insurance premiums in the country" he says. In addition, Melnick notes that health care inflation in the state declined rapidly between 1980 and 1991, while per capita costs rose only 39%, as compared with 63% across the rest of the country. Melnick writes, "Since 1982, California has demonstrated that it is the antithesis of mandates -- market forces -- that really drive down costs." Market competition, he argues, is what spurs lower costs and higher quality, encourages innovations in health care delivery and inspires more generous coverage on the part of employers. The government's role, he says, is to ensure that plans make available "sufficient information on a range of choices" so that consumers can "assess the costs and benefits of the plans available, and then, as in most parts of our economy, they can vote with their feet" (2/25).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.