Managed care and health care reform: everything old is new again.

Abstract

A 1991 New York Times article reported that the “pioneering” state of Arizona, a “late starter in Medicaid,” had provided a health system model for the nation in the Arizona Health Care Cost Containment System (AHCCCS). At that time, AHCCCS was the only Medicaid program in the United States in which nearly all beneficiaries were enrolled in managed care organizations (MCOs) that were reimbursed on a prepaid capitated basis. Because of a physician participation rate exceeding 50%, remarkably high for a Medicaid program, AHCCCS had brought about truly mainstream managed care for the low-income members that it served, the article reported: “In much of the country, [Medicaid beneficiaries] would be left to seek treatment in shoddy ‘Medicaid mills’ or, at great public expense, in overcrowded emergency rooms. ... In Arizona, things are different.”1 Glowing press coverage of the program continued. In 1995, a Time Magazine article observed that AHCCCS was being “hailed as a model of managed care” because of the program’s emphasis on primary and preventive care, prohibitions against “cherry picking” healthy enrollees, and use of “intensely competitive” bidding to award contracts to MCOs.2 “The most remarkable thing,” Time reported, “is that the state government managed to come up with a program that makes just about everybody happy: the patients, the doctors, the bureaucrats and the number crunchers.”2 AHCCCS did not become the dominant national model for health care financing and delivery as predicted in the 1990s.3 But AHCCCS became the Phoenix in 2009, when it was once again described as “a proven, efficient model for national health reform,” this time by an Arizona legislator who is a proponent of current health care reform proposals.4 More importantly, this cycle of events was not limited only to AHCCCS; it is a pattern that has been repeated over the past several decades in the United States. Insights into public opinion about managed care, consumer choice, and preventive medicine are critical to understanding the prospects for the structure of health care financing and delivery in the United States in the coming years.