Managed Care Systems vs. Health Care Trends

Abstract

Kirkman-Liff has lucidly written an international overview of trends in health and their management from which any reader can learn. In it, he saves the best for last--the themes of integrated networks, collaboration across health teams and communities, and informed management of limited resources. These themes stem, it seems to me, less from his opening challenges of unequal access, substance abuse, AIDS, and an aging population per se than from (1) the challenges of increasing costs due to medical expenditures rising from the growing capacities of advanced techniques and rising expectations of patients, (2) the ironic result of more people living longer with chronic conditions or disabilities that constantly consume medical resources, and (3) the growing importance of preventive measures that can eliminate or postpone over half of all illnesses, disorders, and deaths. But what does not follow is the unique and strange American trend toward large corporate managed systems. Like an avalanche that gains speed and power until it can uproot whole trees and swallow up log cabins, the American mega-managed movement seems to be taking everything in its path: private office practices, community hospitals, various community clinics, and ancillary services. Of course, the surface rhetoric of large managed systems speaks of superior performance, integrated services, and efficiency. But the under-rhetoric speaks of superior market power, integrated financial services, and profits to anyone who buys in. The fear that if you do not sell out, you will be left out of the new health market is omnipresent. The executives and owners make millions. The odd thing about the American belief that the future belongs to mega-managed corporations is how little evidence sustains their claims of superior performance and how poorly they meet the health needs of the twenty-first century (U.S. Congressional Budget Office 1992; World Bank 1993; Rice, Brown, and Wyn 1993). The trend is like a time warp, where one sector of the economy is bent on creating huge conglomerates like those of the late 1970s, while every other sector is moving toward networks of smaller entrepreneurial units with flexible arrangements. One sector is adding layers of highly paid corporate managers (the champions of consolidation) in the name of greater productivity and efficiency, while every other sector of the economy is peeling off layers of middle and upper management. Mega-managed systems keep about 25 cents of every premium dollar to pay the managers, executives, investors, and marketeers as well as to run the services. Medicare or German sickness funds keep about 5 cents to run the services. This is cost containment American style--reduce monies available for clinical services to treat sick people in order to reward corporate managers for having made the reductions. No other country has held its costs in check while providing all needed services to all citizens by using anything close to large managed systems. I predict that in the early twenty-first century we will look back at the 1990s and wonder how we could have allowed such corporate dinosaurs to form. We will also be inside them, trying to figure out how to dismember them and create collaborative, flexible networks of small local units as Kirkman-Liff suggests at the end of his article. The irony is that all the approaches and materials are presently at hand to create such networks now. First, a strong foundation of primary in which patients choose a primary provider they respect as their advocate is still vital to cost-effective services and prevention (Starfield 1992). Broadly trained providers, such as British GPs or American family practitioners, continue to demonstrate the range and effectiveness of a generalist in an age of subspecialization. But more important are developments in the United Kingdom that expand primary contracts and budgets to include all related nursing, community, preventive, and elective specialty services into what might be called comprehensive primary care (Light 1994b; Fry, Light, and Rodnick 1994). …