Health care in the United States: current and future challenges

The last time the United States experienced rapid increases in health care expenditures in the 1980s, the solution was widespread adoption of managed care by employer-sponsored health plans. To a lesser degree, managed care approaches were adopted for some Medicaid and Medicare enrollees. By the mid-1990s, new Medicare reimbursement policies and the widespread adoption of managed care plans had substantially reduced the growth rate of health care expenditures. All published studies show that HMOs and other managed care plans have delivered health care of equal or better clinical quality to traditional indemnity insurance plans at a lower cost. Yet as the economy strengthened during the latter '90s, concerns about overall health care costs lessened, and the public became less willing to accept restrictions on the enrollee's choice of physician and the physician's treatment choices. Public opinion turned against the concept of managed care as a result of backlash from both physicians and consumers. Government mandates altered the ability of managed care to deliver on the promise of higher quality at a reduced cost. Today, health care costs are again rising. The United States is spending significantly more per capita on health care than are other developed nations, with no demonstrable improvement in health outcomes. Estimates suggest that in the next 30 years, health care costs will again rise at a rate faster than that of the economy. Further, rising costs will reflect the impact of an aging population, with more than 20 percent of individuals 65 years or older by the year 2030. Thus, it appears we are again headed for a crisis. However, the environment has changed: As a result of the experience of the last 10 years, the public is now less willing to accept changes to the health care system, and the concept of managed care has negative connotations. Consequently, the crisis may potentially be even worse than that we experienced a decade ago if we are unable to find ways to control health care expenditures.