New-generation marketing thrust grows in competitive southern CA.
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Granting health benefits to 37 million uninsured Americans will inflate demand for doctors--who are already stretched to the limit. The result: soaring prices and long waits.
In this article, a health care marketing executive takes an opposing view: That the consumer will not only continue to exercise choice but also, at annual renewal time, veto power. In part, that is because the consumers are feeling the rising cost of health care much more directly than in the past, through ever-higher premiums, deductibles and copayments. As they assumed more of the burden of medical care delivery, consumers are becoming more knowledgeable about and discriminating toward the health care system and provider plans they are offered. They understand--as does their employer--that no longer are all health care plans alike or at parity with each other. The consumer is also demanding greater access to freedom of provider choice, quality of health care coverage.
President Clinton and many other elected officials have proposed that managed competition be the cornerstone of health care reform. However, experiences of Medicaid recipients with managed care plans are at best mixed. These capitated programs report higher costs than do fee-for-service arrangements. Fortunately, these additional expenditures are partially offset by at least a perception of improved access to care. Due to difficulties in determining eligibility, delivering benefits, paying for needed services, and similar concerns, providing care for the poor and underserved will be complicated and expensive for the proposed sponsors of managed competition plans.
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Economic recession prompts governments and health service ministers to seek increased efficiency in the production of hospital services in order to reconcile increasing demands with scarce resources. As one approach to the problem, the National Health Strategy is recommending pilot schemes, similar to those which have been introduced in both the United Kingdom and the Netherlands, which involve the separation of purchaser from the provider of hospital services. It is argued that such separation, with the introduction of competition between providers of hospital services for contracts placed by publicly funded Area Health Boards, will increase efficiency and accountability in the use of resources. However, this argument ignores the hospital management's ability to keep costs down by altering the quality of hospital care in ways which are difficult to monitor by purchasing agencies. The article considers the effects the introduction of managed competition is likely to have on the quality of hospital services. The outcome is uncertain and competition may improve some dimensions of quality while jeopardizing others. If managed competition is tried in Australia, the opportunity should also be taken to examine its impact on the quality and outcomes of hospital care.
Health care cost control is often debated in terms of markets versus bureaucracies. Market restraints are limited in practice by the goal of providing access to care. Therefore, effective cost control requires budgeting. Experience from budgeting for other services should put health care cost control in perspective: The goal should not be rational and efficient allocations, merely better ones. The important choice is not between markets and bureaucracy, but rather which decisions should be made by physicians and which by budgeters, and how to ensure that professional judgment is applied where most important.
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