Managed care, managed competition ... managed concern.
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The history and principles of managed competition.
Managed competition in health care is an idea that has evolved over two decades of research and refinement. It is defined as a purchasing strategy to obtain maximum value for consumers and employers, using rules for competition derived from microeconomic principles. A sponsor (either an employer, a governmental entity, or a purchasing cooperative), acting on behalf of a large group of subscribers, structures and adjusts the market to overcome attempts by insurers to avoid price competition. The sponsor establishes rules of equity, selects participating plans, manages the enrollment process, creates price-elastic demand, and manages risk selection. Managed competition is based on comprehensive care organizations that integrate financing and delivery. Prospects for its success are based on the success and potential of a number of high-quality, cost-effective, organized systems of care already in existence, especially prepaid group practices. As it is outlined here, managed competition as a means to reform the U.S. health care system is compatible with Americans' preferences for pluralism, individual choice and responsibility, and universal coverage.
Competitive Medical Plans↗
Managed care in New Zealand: managed competition or managed collaboration?
Managed care is making major progress in New Zealand through independent practice associations (IPAs) now representing more than 50% of general practitioners. It is also being implemented by community groups, especially Maori, who see great potential in improving the health status of their people through this strategy. However, a significant conflict appears to be developing between achieving managed care through managed competition on the one hand and managed collaboration on the other. There appear to be fundamental flaws in the concept of managed competition. Evidence is emerging that managed collaboration is far more likely to be effective in achieving the Government's goals of improving health status and access and more cost-effective healthcare.
Budgets↗
From managed competition to managed cooperation: theory and lessons from the British experience.
The United Kingdom led the world in transforming the largest single health care system from a publicly administered service to a set of interlocking contracts. Policy lessons that can be adapted by employers, nations, and other large payers are identified. These lessons are drawn from the improvements that the British made over the design of managed competition, the mistakes and problems they experienced, the underlying trends toward privatization and class discrimination, and the limitations to competition that have led the British toward managed cooperation in collaborative purchasing for the health needs of communities. Yet market reform and the rhetoric of efficiency have justified the shrinking of health services, the shift of costs to household budgets, and the use of public moneys to support private services and investors at greater expense by moving properties and services off the public ledger. In these ways, managed competition can Americanize health care and pose fundamental questions about what policy goals are really being pursued.
Cooperative Behavior↗
Managed competition and managed care. What are the ethical issues?
Managed competition and managed care, two hallmarks of President Clinton's health care reform proposal, would significantly change the way that health care in the United States is structured and delivered. This article presents ethical debates about managed care in historical perspective, reviews ethical arguments for and against managed care systems, and concludes with a set of practical guidelines to govern existing managed care arrangements. Throughout the paper, special attention is devoted to the impact of managed care on the elderly population and on physician-patient relationships.
Aged↗
Testimony on managed competition. Expenditure limits and managed competition.
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Competitive Medical Plans↗
Management logo competition: management as a serpent in a bowler hat.
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Awards and Prizes↗
Confusion reigns: managed competition case management managed care.
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Delivery of Health Care↗
Questions and answers about managed competition.
The Managed Competition strategy for health care financing reform would push most people into cut-rate versions of health maintenance organizations chosen for them by their employer and owned by an insurance company. Many of those who currently enjoy good coverage would be forced into bare bones plans, and would forfeit the right to choose their health care provider. There is little evidence that the rigidly multi-tiered system created by Managed Competition would be more efficient or less expensive than the current U.S. system, and administrative costs would likely rise. Promises to expand coverage for the uninsured are likely to fall by the wayside if cost containment fails, and no current Managed Competition proposals address long-term care. In rural areas including at least 30 percent of the U.S. population, price competition central to the Managed Competition strategy is untenable since a long hospital or other provider cannot compete with itself. Managed Competition would empower vertically integrated corporate health care insurer/providers and disempower patients and the clinical work force.
Competitive Medical Plans↗
Critical care medicine in managed competition and a managed care environment.
The high cost of medical care in the United States and diminishing access to health care for many Americans has spurred healthcare reform efforts in this country. Several bills have been introduced into Congress. Many of these healthcare bills and other proposals embrace the concept of managed care and managed competition as their central feature. The steady growth of managed care organizations and the possible adoption of managed competition stands to significantly alter the way critical care medicine is practiced and delivered in the United States. The number of ICUs and ICU beds may be reduced, affecting both patient case mix and the overall mission of the ICU and critical care practice. Furthermore, fewer critical care practitioners may be available as a result of diminished educational funding and reduced training programs. In view of these and other impending changes in the American healthcare system, it is vital to investigate the impact of managed care on ICU practice and patient outcome and to study the incremental and value-added contributions of critical care medicine.
Cost Control↗
Managed competition: an analysis of consumer concerns. The Working Group on Managed Competition.
Advocates for health care reform (representing a broad range of constituencies) raise serious concerns about the ability of managed competition to meet the health care needs of the American people. Similarities in managed competition proposals include establishment of a collective purchasing authority, creation of health plans, standardization of rules and requirements, and limitation on tax subsidies. Managed competition proposals vary as to whether they call for true universality, meaningful cost containment, and fair financing. The article raises questions about managed competition, including the technical feasibility; the link to employment; the role for insurance companies; severing the link between insurance and income, age, or health status; comprehensive benefits; cost containment; the role for managed care; universality of coverage; and the role for insurance companies to make treatment decisions.
Competitive Medical Plans↗
Key issues in managed competition.
All managed competition proposals for health system reform must confront several key issues. The premiums paid to health care purchasing cooperatives will need to be subsidized for those who cannot pay full fare; the amount and sources of the subsidies are controversial political issues. The payments passed on by purchasing cooperatives to health plans must be risk adjusted to account for differences in the health care needs of their enrolled populations. This is essential to create a level playing field for competition and to eliminate incentives for plans to use risk assessment for attracting enrollees. The data and methods needed for risk adjustment, however, are not adequate at present. The Clinton Administration's plan to limit expenditure increases raises a host of thorny issues. Maintaining quality of care will require health plan quality report cards to be supplemented by external quality assurance systems. Assuring quality will be particularly problematic for traditional indemnity plans. The structure and governance of the system, administration simplification, and other issues need to be addressed. The size and voluntariness of the purchasing cooperatives greatly influence all of these considerations. Physicians should inform their political representatives on how these issues should be resolved as compromise bills are drafted by the United States Congress this year.
Competitive Medical Plans↗
A hitchhiker's guide to competitive managed care.
Competition among managed care plans features the dynamic interaction among three primary forces: delivery system integration, managed care health plan risk sharing, and purchaser activism. To evaluate the cost containment potential for a particular market, decision makers need to understand the character of provider integration, the role of managed care insurance plans, and the extent of purchaser activism in contracting with health care providers. This paper provides benchmarks that analysts can use to assess markets, and applies them to the four largest markets in Wisconsin. It concludes that competition among managed care plans can lead to cost-effective care only if purchasers respond to differences in cost, for given quality, by switching from high-priced plans to lower-priced ones.
Benchmarking↗
Preparing for managed competition.
Without the demands of managed competition or economic incentives to control costs, providers have little reason to invest in systematic data analysis about their patients. Information technologies in the hands of health care managers and physician executives primarily are tools for cost control, and, if cost control is not an important issue for them, they do not learn how to do it. The rules of the game have already changed for providers where managed care dominates the medical community and will change for the entire nation under managed competition. Managed competition gives providers strong incentives to identify the costs of care and unnecessary variations in those costs, to introduce new processes of care to reduce unnecessary administrative and clinical costs, to implement practice guidelines to reduce variations in outcomes of care, and to document statistics indicating excellent quality.
Computer Communication Networks↗
The marketplace in health care reform. The demographic limitations of managed competition.
BACKGROUND: The theory of managed competition holds that the quality and economy of health care delivery will improve if independent provider groups compete for consumers. In sparsely populated areas where relatively few providers are required, however, it is not feasible to divide the provider community into competing groups. We examined the demographic features of health markets in the United States to see what proportion of the population lives in areas that might successfully support managed competition. METHODS: The ratios of physicians to enrollees in large staff-model health maintenance organizations were determined as an indicator of the staffing needs of an efficient health plan. These ratios were used to estimate the populations necessary to support health organizations with various ranges of specialty services. Metropolitan areas with populations large enough to support managed competition were identified. RESULTS: We estimated that a health care services market with a population of 1.2 million could support three fully independent plans. A population of 360,000 could support three plans that independently provided most acute care hospital services, but the plans would need to share hospital facilities and contract for tertiary services. A population of 180,000 could support three plans that provided primary care and many basic specialty services but that shared inpatient cardiology and urology services. Health markets with populations greater than 180,000 would include 71 percent of the U.S. population; those with populations greater than 360,000, 63 percent; and those with populations greater than 1.2 million, 42 percent. CONCLUSIONS: Reform of the U.S. health care system through expansion of managed competition is feasible in medium-sized or large metropolitan areas. Smaller metropolitan areas and rural areas would require alternative forms of organization and regulation of health care providers in order to improve quality and economy.
Adolescent↗
Achieving effective cost control in comprehensive health care reform. The Jackson Hole "managed care managed competition" approach.
The managed competition approach was originated by Alain Enthoven, a professor at the Stanford University Graduate School of Business, in the late 1970s, and has since been refined by Enthoven and a group of colleagues meeting in Jackson Hole, Wyoming. This outline was presented by Enthoven at hearings on cost control in health care reform held by Senator Edward Kennedy (D-MA) in December 1992.
Competitive Medical Plans↗
The strange career of managed competition: from military failure to medical success?
Managed competition remains untested as the basis of a national health program. However, key principles of managed competition first emerged in the military. For this study, published works on systems analysis and the planning-programming-budgeting system (PPBS), developed by Alain Enthoven and colleagues at the US Department of Defense during the 1960s, were compared with published presentations of managed competition. The influence of PPBS waned after it generated controversy and opposition. PPBS and managed competition represent similar managerial strategies of policy reform. Although the origin of managed competition in failed military policy does not ensure failure in the medical arena, this history also does not augur success.
Cost-Benefit Analysis↗
Supplementing managed competition.
President Clinton's proposal for health care reform calls for managed competition within global expenditure targets. However, it is unlikely that health plans will have sufficient leverage with providers to negotiate arrangements consistent with expenditure targets in nonurban areas. This paper describes a reimbursement system based on competitive prospective payment and capitation (CPPC) which can supplement managed competition in less populous areas or replace managed competition should that strategy prove unsuccessful. The CPPC system is capable of enforcing an expenditure target while encouraging the formation of capitated networks and creating strong incentives for efficiency. It is generally compatible with the Clinton administration's version of managed competition.
Capitation Fee↗