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Journal of Health Politics, Policy and Law 27.3 (2002) 345-351



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Editor's Note

Managed Care Redux


There was a time not so long ago when the term "managed care revolution" rolled easily off the tongue. The sweeping changes that brought managed care to the forefront of health care organization in the United States, which accelerated so dramatically in the last decade, certainly felt revolutionary, albeit Menshevik in manner to some but more Bolshevik to others. With time came the hint of a Thermidorean Reaction, as the public and numerous elected officials in Washington, DC, and state capitals grew skeptical about the promise and motivation of managed care arrangements—a theme captured in our October 1999 Special Issue on "The Managed Care Backlash." Complaints permeated media coverage that too many Robespierres were sitting at the practice guidelines computers of commercial managed care plans arbitrarily guillotining worthy claims.

The backlash, however, has not—at least yet—engendered a true counterrevolution. Instead, the new status quo remains one deeply imbued with all sorts of managed care plans billed as the primary form of insurance coverage for most private-sector and a substantial proportion of public-sector clients. The American Association of Health Plans, with its employer and insurance allies, has so far been successful in its efforts to protect the viability of the emergent regime against the challenge of insurgents, including those novel rebels, physicians. Managed care, in all of its manifestations, is not going to disappear anytime soon, however much plan executives tweak benefit packages in order to escape set panels [End Page 345] of providers to pacify wary consumers. Even passage of the Patients' Bill of Rights—a federal version or one of those enacted or under consideration across the states—would not fundamentally reshape the contours of the existing insurance system. At the same time, we are far from having reached a satisfying equilibrium in the meaning, practice, and performance of managed care plans, either individually or as the organizational embodiment of American health care coverage. With so much about managed care still in flux, this special issue on "Managed Care Redux" lets us reexamine a number of important topics relevant to the ongoing debates about managed care.

Few issues have fueled more media coverage, spawned more anecdotes, or drawn greater attention of elected officials than worries about the impact of managed care arrangements on the quality of care. I doubt that any reader of this journal has attended a single meeting of health care specialists over the past couple of years without finding him- or herself in conversation about the perils of one managed care plan or another. In place of the marketing promise of managed care—namely, promoting quality by selecting the best physician panels, integrating services, and predicating treatment decisions on the application of the most advanced clinical information—many believe that the nod in practice has been given excessively to managed costs, threatening quality. As medical care expenditures have risen sharply, and with them insurance premiums, employer financial obligations, and co-payments, even that part of the equation seems unfulfilled. The empirical evidence, however, does not present such a stark image of the decline of quality under the managed care regime (partially because it was not so good under fee-for-service medicine either). Pockets of potential problems for the poor, the elderly, and the chronically ill have been identified, but no one has documented grave differences between fee-for-service environments and managed care in overall quality, physician time with patients, or patient satisfaction. 1

In their article, "Consumer Beliefs and Health Plan Performance: It's Not Whether You Are in an HMO but Whether You Think You Are," James D. Reschovsky, J. Lee Hargraves, and Albert F. Smith offer an interesting twist. Exploiting data derived from the Community Tracking Study, they find that the negative perceptions that individuals have about the quality of care provided by health maintenance organizations (HMOs) [End Page 346] stem largely from the overall critical atmosphere that has become the conventional wisdom of the backlash. People often incorrectly believe...

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