HCFA’s Influence as the Nation’s Largest Purchaser of Health Services

Abstract

The American health care system is at an important juncture in the development of managed care and of public programs related to managed care. Like most critical junctures in history, it has the potential to go any of several ways. How it turns out will depend on what we do in the next few months and years ahead. Clearly, one of the initial promises in the concept of health maintenance organizations (HMOs) and other managed care systems was the enormous potential to expand the use of population-based medicine, disease prevention, and health maintenance. The early proponents of pre-paid group practice as a style of medicine understood “managed care” not only as a financial and social set of relationships but also as an approach to the health of a population from a perspective much more like that of public health than of medicine. We are now close to being able to fulfill that promise, but it is not a self-fulfilling concept. It will not happen automatically or by itself. All of us are going to have to work very hard to make it happen. Preventive health spans a continuum of services and areas of expertise. It ranges from clinical practices that are now considered a basic part of routine care, such as periodic Pap smears and the provision of immunizations in accordance with CDC recommendations, to community-wide and even nationwide initiatives to educate individuals and communities about behaviors that affect their health. At all points in the continuum, we need to work together as partners to develop consensus about norms of practice, consistent quality measures for accountability, and consistent public education messages. We need to recognize the increasing diversity of our audiences and the challenge of getting the same message through diverse mechanisms and diverse channels of communications to very diverse populations. Health Care Financing Administration (HCFA), in its role as administrator of Medicaid and Medicare, as the nation’s largest purchaser of health services, and as the largest purchaser of managed care, is working actively to improve accountability. These efforts will ensure quality in the services HCFA pays for and improve communications with HCFA’s beneficiaries so they can make informed choices about their care. Accountability and public education are the bedrock of improving quality and prevention in managed care. Currently, more than 75 million Americans are covered by HCFA programs, and their rate of enrollment in managed care is growing exponentially. At the end of 1996, our managed care programs covered nearly 13% of our Medicare beneficiary population, with 80,000 new enrollees in risk-bearing plans each month. This represents an 81% increase in enrollment since 1993. At the end of 1996, managed care accounted for about 12 million people, or one-third of the total Medicaid population. It has been growing at annual rates of 30% and 40% throughout this decade (Office of Medicaid and State Operations, HCFA).