Strong Economy Led to ‘Demise’ of Managed Care, NPR Reports
According to health care economists, what "really doomed" managed care in the 1990s was the "surprisingly strong economy," as it allowed employers to "call the shots," NPR's "Morning Edition" reports. Urban Institute economist Robert Reischauer said that with "profits soaring," employers were much less worried about health inflation than about "keeping workers happy." Reischauer said, "Most importantly, the labor markets got very tight and consumers didn't want restrictions on their choice of providers or limitations on their health care in any way, and employers had little reason to impose those restrictions. So employers really backed off, gave managed care plans a lot more latitude to please the beneficiary rather than constrain cost." Princeton University economist Uwe Reinhardt added that managed care helped to "fuel a furious consumer backlash" when it began to "push around its patients." Reinhardt said, "They ... did unbelievably clumsy things like kicking mothers out of bed after the first day after a delivery. Clinically that may be acceptable, but from the point of view of a consumer ... it was politically very dumb." Dr. Lawrence Casalino, assistant professor of health policy at the University of Chicago, said that managed care plans' strategy to grow "as large as possible to negotiate discounts from doctors and hospitals" worked until health care providers responded with the same consolidation tactic. The full segment will be archived in RealAudio at http://search.npr.org/cf/cmn/cmnpd01fm.cfm?PrgDate=01/15/2002&PrgID=3 after noon ET (Rovner, "Morning Edition," NPR, 1/15).
Ron Pollock, executive director and vice president of Families USA; Susan Pisano, vice president of communications for the American Association of Health Plans; Dr. Thomas Reardon, former president of the American Medical Association; and Dr. Gerald Kominski, associate director of the UCLA Center for Health Policy Research, also discussed the future of managed care on PRI's "To The Point" last night. The full segment is archived in RealAudio at http://kcrw.com/cgi-bin/ram_wrap.cgi?/tp/tp020114The_Future_of_Manage>. ("To the Point," PRI, 1/14). Note: You will need RealPlayer to hear both reports.