Saturday, June 21, 2008

Managed Care Redux?

Working through my accumulated reading pile, I came upon a column in Modern Healthcare (May 19, 2008) by Mike Leavitt, U.S. Secretary of Health and Human Services. In it, he suggested that the competitive forces that exist in Medicare’s Part D (prescription drug) program should be applied to Parts A and B. He suggested that “A physician practice would be far more likely to invest resources in monitoring and tracking patients with chronic conditions if beneficiaries were provided with information on the quality of care and dollar savings available through more effective providers.”

That may be so, but I think he neglected to mention a central point. As a beneficiary of Part D, my basic relationship is with the insurance company (Humana in my case) – not with providers. The “competitive forces” involved are, on the one hand, among the insurance companies as they vie for my business and, on the other, between insurance companies and the pharmacies and pharmaceutical companies from which they “buy” drugs.

Applying that arrangement to Parts A and B would result in something very much like the HMO/Managed Care plans of the 1990’s. Those succeeded in restraining the cost of health care but proved unpopular and were largely abandoned.

I happen to believe that some form of the HMO/managed care approach is the best way to introduce “competitive forces” into the health care system and to that extent agree with Secretary Leavitt. But if that is what he has in mind, he should say so and suggest means for overcoming the objections that caused its demise.

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