UN-MANAGING CARE: Doctors And Hospitals Vie For Control

      In a case of "healer's revenge," doctors and hospitals reacting "to managed care's decade of hegemony over the nation's $1 trillion health system" are beginning to "wrest control from HMOs," Business Week reports. Small community hospitals are "erecting operating rooms, cancer wards and outpatient buildings," physicians are "flocking" to family clinic practices, and hospitals and physicians groups are "creating soup-to-nuts megachains with nursing home and rehab centers" -- all in the name of "winning" back the power from managed care to "call the shots." Drew Altman, president of the Kaiser Family Foundation, said, "The industry is headed toward a major shake-up in the next three to five years." While different arrangements are evolving to meet the unique needs of communities, most "derive economic clout" from a large number of doctors grouped together under a health care company. Physicians "are getting the chutzpah and organization to dictate terms," according to consultant Jayne Oliva. This comes at some cost, as doctors must now assume much of the risk of caring for patients as well as the decision making.

What Next
      What these newly empowered groups "do with their renewed autonomy will be crucial to the quality and cost of health care." In a best-case scenario, more control and responsibility for doctors will encourage them to "lift productivity," but new arrangements could also "spark up a resurgence in medical inflation with over-building, duplication of services and higher prices." And while the recent public outcry against managed care shows that consumers want doctors and other providers to "run the show," Business Week notes that there are "pitfalls" inherent in this health care revolution. Besides the inefficiencies created by the new entities, there's also the likelihood that not all of these new groups have the resources to take on financial risks as do large HMOs. Business Week concludes that doing away with managed care "is no miracle cure," and burgeoning provider groups "won't easily rationalize a byzantine health care system." But doctors "closer to the customer, equipped with the right information and motivated to cooperate" do have a shot at "getting it right" (Hammonds, 6/15 issue).