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Managed care and medical technology: implications for cost growth
M Chernew1, A M Fendrick, R A Hirth
1Department of Health Management and Policy, University of Michigan School of Public Health, USA.
Health Affairs (Project Hope)
|March 1, 1997
Summary
Managed care plans like health maintenance organizations (HMOs) may lower healthcare spending. However, their impact on long-term cost growth, especially concerning new medical technologies, remains uncertain.
Area of Science:
- Health Economics
- Medical Technology Assessment
- Healthcare Management
Background:
- Managed care health plans, including health maintenance organizations (HMOs), are recognized for their potential to reduce overall healthcare expenditures.
- A key factor in controlling long-term healthcare cost growth is the management of emerging medical technologies.
- The effectiveness of managed care in moderating the adoption and utilization of new technologies is a critical area of study.
Purpose of the Study:
- To evaluate the impact of managed care, specifically HMOs, on the utilization patterns of new medical technologies.
- To determine if HMOs influence the rate of adoption and growth in use of innovative medical procedures compared to the general population.
Main Methods:
- Analysis of utilization data for a specific new medical technology, laparoscopic cholecystectomy.
- Comparison of utilization trends between patients enrolled in HMOs and the general patient population.
Main Results:
- Evidence suggests no significant difference in the growth rate of laparoscopic cholecystectomy utilization between HMO enrollees and the general population after its introduction.
- This indicates that HMOs may not systematically differ from the general market in managing the uptake of new technologies.
Conclusions:
- HMOs' ability to constrain long-term healthcare cost growth may be limited if they do not effectively manage the adoption of new medical technologies.
- The study's findings on laparoscopic cholecystectomy suggest that managed care may not inherently slow the diffusion of innovation.
- Further research is needed to understand how managed care can better influence the utilization of emerging medical technologies to control costs.