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PubMed1995

Managed care in the Twin Cities: what can we learn?

Minneapolis/St. Paul, because of its history of health maintenance organization development and active employer participation in the health care arena, is often cited as a community in which managed competition has been tested to some degree. This paper reviews the historical development of the Twin Cities health care market and summarizes findings from past studies of this market. It also describes the recent consolidation of providers in the Twin Cities, as well as the activities of large purchasing coalitions. Finally, it assesses the elements of the Twin Cities experience that seem most relevant to managed competition-based health care reform proposals.

Group Purchasing↗
PubMed1993

A bridge to compromise: competition under a budget.

A new approach to universal health insurance combining managed competition and global budgets promises to break the impasse blocking comprehensive health reform. The central innovation is the development of regional health insurance purchasing cooperatives (HIPCs) as managers and reorganizers of the market and platforms for global budgets. Financing would be based on community-rated premiums, with obligations to employers capped as a percentage of payroll and to individuals as a percentage of family income. Budgets would cap the mandated core of spending and set a target for out-of-pocket expenditures.

Community Participation↗
PubMed1999

Simulating the effects of employer contributions on adverse selection and health plan choice.

OBJECTIVE: To investigate the effect of employer contribution policy and adverse selection on employees' health plan choices. STUDY DESIGN: Microsimulation methods to predict employees' choices between two health plan options and to track changes in those choices over time. The simulation predicts choice given premiums, healthcare spending by enrollees in each plan, and premiums for the next period. DATA SOURCES: The simulation model is based on behavioral relationships originally estimated from the RAND Health Insurance Experiment (HIE). The model has been updated and recalibrated. The data processed in the simulation are from the 1993 Current Population Employee Benefits Supplement sample. PRINCIPAL FINDINGS: A higher fraction of employees choose a high-cost, high-benefit plan if employers contribute a proportional share of the premium or adjust their contribution for risk selection than if employees pay the full cost difference out-of-pocket. When employees pay the full cost difference, the extent of adverse selection can be substantial, which leads to a collapse in the market for the high-cost plan. CONCLUSIONS: Adverse selection can undermine the managed competition strategy, indicating the importance of good risk adjusters. A fixed employer contribution policy can encourage selection of more efficient plans. Ironically, however, it can also further adverse selection in the absence of risk adjusters.

Consumer Behavior↗
PubMed1994

Choosing among health plans.

The health care reform system that is ultimately adopted, suggest the authors of this analysis, should rely on market forces, rather than government regulation, to reduce cost and improve quality in our health care delivery. A major portion of this paper compares the Health Security act (the Clinton proposal), the American Health Security Act (the McDermott bill), the Health Equity and Access Reform Today, HEART (the Chafee proposal), and the Managed Competition Act (the Cooper bill). The article focuses on the major areas of difference between these alternative proposals in the extent to which they would achieve true market-based reform, small group reform, universal coverage, and financing mechanisms.

Evaluation Studies as Topic↗
PubMed1997

How do states buy health insurance for their own employees?

State governments play many roles in local health insurance markets. This paper focuses on the role of states as employers. As managed care and health care costs continue to grow, state governments engage in a variety of health insurance purchasing practices that influence the structure of health benefits offered to state employees. Descriptive analysis shows that many states have adopted managed competition to some degree, as well as traditional cost-reducing measures such as utilization review and self insurance. The experience of state governments can provide a benchmark for other public and private employers.

Cost Control↗
PubMed1996

Managed care in the pediatric subspecialty of neonatology. The challenges, impact, and consequences.

As our health care system moves toward a more managed competition model, the delivery of pediatric and pediatric specialists' services, especially the intensive and procedural services of neonatology, will be impacted. Pediatricians and pediatric subspecialists cannot avoid being buffeted from the powerful market forces that are now driving revolutionary changes in our health care system; they, like nonpediatric physicians, are often concerned and bewildered about the new realities of the day.

Female↗
PubMedDate not supplied

Merging managed care with the German model.

Since public officials in the United States may lack the courage and political will to significantly raise payroll taxes or the contain Social Security, Medicare and Medicaid benefits, Americans can anticipate that; (a) future generations increasingly will pay for these entitlements; (b) additional cutbacks to providers in Medicare, Medicaid and health maintenance organization reimbursement will hasten the current thrust of hospitals, physicians and insurers in forming huge health networks with their powerful managed care plans; and, (c) many of these new alliances will function as virtual monopolies--eventually resulting in the public proposing that state health services commissions be established. This article then suggests that future modifications in how the United States health delivery system be organized and financed preferably should be along the lines of the German multi-player, multi-tier, self-governing, decentralized, quasi-private, quasi-public model; and, also patterned after experiences of the State of Arizona's Medicaid program. It concludes that what America needs most is a hybrid of the European global budgetary targets to constrain total health expenditures, and the competitive managed care concept to curtail use patterns and to enhance quality.

Delivery of Health Care, Integrated↗
PubMed2001

Psychiatric Darwinism = survival of the fittest + extinction of the unfit.

This article is a critical analysis of the American Health Security Act of 1993. Although AHSA was soundly defeated when first proposed, parts of it have been enacted into law in 1996, with the prospect of further piece-meal enactments in the future. It includes matters of fundamental importance to American mental health practitioners, to vulnerable citizens with psychiatric disorders, to their families, and to their few champions in medicine and law. Utilitarianism is the unstated philosophical substructure of AHSA and its legislative progeny, i.e., whatever cuts medical costs and saves money is good. The author delineates AHSA's mental health entitlements and limitations of in-patient, out-patient, and other patient care. She enumerates a dozen major imperfections and dangers of this mental health law, especially its medical utilitarianism emphasizing outcomes and quality of life. Dr. Cosman argues that medical cost, outcome, quality of life, and managed competition threaten the essential liberties and the lives of older persons, persons who are chronically ill, fatally ill, and most particularly those who are mentally impaired. She concludes that if limited money, medicine and time are invested only in inevitable medical success, then America's medicine by its medical law will be Medical Darwinism encouraging survival of the fittest by requiring extinction of the unfit.

Adolescent↗
PubMed1999

Budget-holding: the answer to Australian primary care reform?

In common with other Organisation for Economic Cooperation and Development (OECD) countries, Australia is experiencing growth in expenditure on health care. However, while many other nations continue to pursue some variation of managed competition to address these problems, Australia has chosen a more incremental reform path, with initiatives such as the General Practice Strategy, restrictions in doctor supply and coordinated care trials. This article reviews the likely effectiveness of such initiatives in the light of experience and evidence of budget-holding in achieving similar objectives overseas. It concludes that budget-holding offers a more effective strategy than current 'piecemeal' reforms to contain costs and increase efficiency within Australian health care.

Australia↗
PubMed1996

Trends in American medicine: problems for the defense expert.

American medicine is undergoing an unprecedented upheaval in its relationship with government, third party payers, business and professional groups, with its patients, and most of all within itself. These trends take the form of movements away from specialization which had been increasing until just recently; the introduction of practice criteria and practice guidelines; the virtual elimination of fee for service medicine; the creation of multiple physician health care organizations working in managed competition; and the grouping of doctors into provider organizations offering credit lines to health care systems. These trends, along with decreasing reliance on tissue diagnosis, declining support of medical research and ever-expanding health care teams have definite impact on the issue of negligence. The foregoing is an attempt to define these and to make some educated guesses as to their impact on health care delivery in the United States in the next several years and the ways in which the negligence climate is likely to change.

Delivery of Health Care↗
PubMed2001

Reforming the Israeli health system: findings of a 3-year evaluation.

Israel, like many other European countries, has recently reformed its health care system. The regulated market created by the National Health Insurance (NHI) law embodies many of the principles of managed competition. The purpose of this paper is to present initial findings from an evaluation of the first 3 years of the reform (1995-1997) regarding the implementation of the reform and the extent to which it has achieved its main goals. The evaluation was conducted using multiple quantitative and qualitative research tools: interviews with key informants; analysis of documents and sick fund financial statements; analysis of trends in sick fund membership; and population surveys conducted in 1995 and 1997 to assess the impact of the reform on outcome measures related to level of services to the public. Data from the evaluation show that the NHI law achieved a considerable number of its goals: to provide insurance coverage for the entire population, to ensure freedom of movement among sick funds, and to standardize the way resources are allocated to sick funds. The incentives that are embodied in the law have encouraged the sick funds to improve the level of services provided to the average insuree, and to develop services in the periphery and for some of the weaker populations. From the financial perspective, concerns that NHI would lead to a rise in the national health expenditure were not realized as of 1997. In the wake of NHI, there has been a decline in the age adjusted per capita expenditure in three sick funds, with no reports by insurees, at least through 1997, on a decline in satisfaction or level of service. However, the Israeli experience shows that regulating competition does not necessarily lead to economic stability and equality. Regulating the competition also did not solve some of the major policy issues in the Israeli health system including level of resources allocated to health, organizational structure of the hospital system, manpower planning and the extent of government involvement in system. Additional policy changes may be needed to resolve these issues. Up-to-date information is essential in helping policymakers track the process of reform implementation and results, and identify problems which need to be addressed in the future.

Consumer Behavior↗
PubMed1998

Developing a public mental health report card: the Hoosier Assurance Plan Provider Profile Report Card.

In 1994, the Indiana General Assembly passed major legislation to reform the state's mental health system. This legislation, known as the Hoosier Assurance Plan, moves the old catchment area model into a system of managed competition. Included in the reform was a requirement that the Indiana Division of Mental Health is required to publish a provider profile. One response to that mandate is the Hoosier Assurance Plan Provider Profile Report Card. Development of a successful report card required a number of key steps. Indiana participated in the national dialogue on mental health report cards and borrowed heavily from the Mental Health Statistics Improvement Program prototype report card for indicators. The data in graphs was developed through a trial-and-error process and included broad provider and consumer input. The resulting report card is useful, and a review of the development process is informative to policy makers and others facing similar tasks.

Catchment Area, Health↗
PubMed1998

Primary care reform: a three country comparison of 'budget holding'.

Governments in most developed nations have been looking to organisational and financial reform of health systems over the last decade. Although the structure and problems of the health care sector in each country may differ, with countries correspondingly adopting different reform agendas, there has been some element of commonality in reforms: that of (managed) competition. Of particular importance in such reforms has been the strengthening of primary care. General practitioners and primary care physicians, as 'gatekeepers' to the health system, are increasingly being called upon to be accountable; not only for their patients' health but also for the wider resource implications of any treatments prescribed. In some countries this role has been formalised through establishing 'budget holding' for general practitioners and primary care physicians, for example, through general practice 'fund holding' in the UK, Health Maintenance Organisations in the USA, and Independent Practice Associations in New Zealand. This paper examines: (i) what such budget holding seeks to achieve; (ii) the effectiveness of the budget holding experience to date in achieving these objectives; and (iii) factors which appear to determine the success of budget holding in achieving its objectives.

Budgets↗
PubMed2004

10 years beyond the Health Security Act failure: subsequent developments and persistent problems.

Ten years after the failure of President Clinton's Health Security Act (HSA), the United States continues to face multiple stresses in health care, including large numbers of uninsured individuals, increasing costs, questions about quality, and dissatisfaction with managed care. Using the framework of the HSA-particularly universal coverage, spending and managed competition, insurance for low-income persons, and patients' rights-the post-HSA evolution and current status of the US health care system is traced and lessons to guide future actions are outlined. Neither incremental legislation nor private sector changes in health care organization and financing during the past decade have ameliorated the problems addressed by the HSA, and new troubles have emerged. These problems affect every group in the country and continue to deteriorate health care, yet there has been no political support for large-scale reform. The core components of a vision for future action-universal coverage, quality improvement, cost containment, and subsidies for the economically vulnerable-are essential. There is a pressing need to construct a clear vision that would tie together incremental steps into a rational approach to comprehensive reform and to actually move toward the realization of that vision.

Health Care Reform↗
PubMed1999

No exit? The effect of health status on dissatisfaction and disenrollment from health plans.

OBJECTIVE: To examine the implications of serious and chronic health problems on the willingness of enrollees to switch health plans if they are dissatisfied with their current arrangements. DATA SOURCE: A large (20,283 respondents) survey of employees of three national corporations committed to the model of managed competition, with substantial enrollment in four types of health plans: fee-for-service, prepaid group practice, independent practice associations, and point-of-service plans. STUDY DESIGN: A set of logistic regression models are estimated to determine the probability of disenrollment, if dissatisfied, controlling for the influence on satisfaction and disenrollment of age, race, education, family income and size, gender, marital status, mental health status, pregnancy, duration of employment and enrollment in the plan, number of alternative plans, and HMO penetration in the local market. Separate coefficients are estimated for enrollees with and without significant physical health problems. Additional models are estimated to test for the influence of selection effects as well as alternative measures of dissatisfaction and health problems. DATA COLLECTION: Data were collected through a mailed survey with a response rate of 63.5 percent; comparisons to a subsample administered by telephone showed few differences. PRINCIPAL FINDINGS: In group/staff model HMOs and point-of-service plans, only 12-17 percent of the chronically ill enrollees who were so dissatisfied when surveyed that they intended to disenroll actually left their plan in the next open enrollment period. This compared to 25-29 percent of the healthy enrollees in these same plans, who reported this level of dissatisfaction and 58-63 percent of the enrollees under fee-for-service insurance. CONCLUSIONS: Switching plans appears to be significantly limited for enrollees with serious health problems, the very enrollees who will be best informed about the ability of their health plan to provide adequate medical care. These effects are most pronounced in plans that have exclusive contracts with providers. We conclude that disenrollment provides only weak safeguards on quality for the sickest enrollees and that reported levels of dissatisfaction and disenrollment represent inaccurate signals of plan performance.

Adult↗
PubMed1993

Reorganizing the financial flows in American health care.

The essays in this volume concentrate heavily on "managed competition," which is merely a particular form of controlling the flow of funds from an insurance pool to the providers of health care. By contrast, this essay emphasizes the funneling of money into the insurance fund. It is argued inter alia that American business has been a quite unreliable partner in the financing of American health care and also a major cost driver. A reformed health system should reduce the role of business to the mere collection of premiums at the nexus of payroll.

Community Participation↗
PubMedDate not supplied

Competition and prospective payment: a new way to control health costs.

Health care costs must be controlled to finance the expanded eligibility and coverage promised during the Presidential campaign. As a practical reality, reforming the existing fee-for-service system is the only way that significant cost control can be achieved during the next four years. The expansion of the basic Medicare prospective payment system to all health care settings and to all payers, combined with price discounting and consumer incentives to use providers that discount, can form the basis of a competitive prospective payment system (PPS). A competitive PPS can bring down costs and complement managed competition and other ongoing cost-containment initiatives.

Cost Control↗
PubMed1993

Integrated systems: subspecialists as capitated primary care physicians?

The shortage of primary care physicians, the shifting roles of specialists and abundance of subspecialists are challenging hospital alliances. In the new world of managed care and managed competition, where providers assume financial risk for overutilization, management must discard traditional measures of profitability and focus on adding value. Hospitals are taking steps to become accountable health partners in smaller to mid-sized markets (two or three hospitals) by sponsoring community based direct contracting managed care networks. This type of system helps providers offer employers a local managed care alternative that is better able to demonstrate quality of care, and to control utilization through capitation and other pricing strategies.

Capitation Fee↗