Potential impact of managed care on national health spending

Illustrative estimates suggest that if all acute health care services were delivered through staff- or group-model health maintenance organizations (HMOs), national health spending might be almost 10 percent lower. If the delivery of all such services (except those now provided by staff- or group-model HMOs) were subject to utilization review arrangements incorporating precertification and concurrent review of inpatient care, spending might be 1 percent lower. The estimates assume no changes in the health care system apart from expansion of these two forms of managed care to cover all insured persons. They also assume that moving to universal managed care would produce a one-time drop in the level of national health spending with no subsequent effect on spending growth.