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Managed care: practice, pitfalls, and potential.
1Bigel Institute for Health Policy, Heller Graduate School for Social Welfare, Brandeis University, Waltham, MA 02254.
Health Care Financing Review. Annual Supplement
|December 10, 1990
Summary
Managed care can significantly cut healthcare costs by managing service intensity. However, savings aren't passed on due to purchaser unawareness, necessitating policy reforms for effective healthcare financing and management.
Area of Science:
- Health Services Research
- Healthcare Management
- Health Economics
Background:
- Managed care strategies aim to control healthcare costs and utilization.
- Existing methods like utilization review and case management reduce expensive services.
Purpose of the Study:
- To review the effectiveness of managed care in coordinating healthcare.
- To identify barriers preventing cost savings from reaching consumers and the broader healthcare system.
Main Methods:
- Analysis of managed care activities and organizational impacts.
- Review of utilization review and case management program outcomes.
- Examination of provider incentives and risk-sharing models.
Main Results:
- Managed care demonstrates potential for substantial cost reduction.
- Provider risk-sharing is crucial for managing healthcare intensity.
- Cost efficiencies have not led to lower premiums or controlled overall expenditures.
Conclusions:
- Purchaser awareness and concern for cost-efficiency are lacking.
- Separating insurance into financing, risk-spreading, and program management is proposed.
- Developing specific policies for each insurance component is recommended to realize managed care's potential.