Discussion

384 Presentation THE ROLE OF MANAGED CARE: THE NATIONAL AND TENNESSEE EXPERIENCES ANTHONY J. CEBRUN, JD, MPH Tennessee Managed Care Network Abstract: The United States is the only developed country with no national health care policy. What exists is a national health insurance system. The problem with this system arises when paying for health care for the poor, who often require the most expensive type of care for acute or episodic ailments. Managed care, though not a panacea, has the potential of providing the organization to effectively control costs and change the existing health care paradigm from one offee-for-service inpatient care to one of ambulatory care, home-based care, and physician office-based procedures . An example of a state-based initiative that has cut medical costs is Tennessee's TennCare. Under TennCare, approximately 1.2 million Tennesseans are covered, nearly 400,000 of whom were previously uninsured . Such programs, both state and national, must now look to including prevention and wellness care to effectively change the underlying epidemiology of illness among the poor. Key words: Health care, managed care, HMO, Medicare, Medicaid Until the 1970s, managed care as we know it today was largely a regional phenomenon isolated to a few dties along the East and the West Coasts. This was due in part to a number of restrictive state and national laws that precluded the effective organization of managed care. For example, prior to the 1970s, many states prohibited physidans from forming group practices that would hire themselves out for a fee. Laws such as these inhibited the growth and spread of managed care for a long time. Then, in the early 1970s, the concept of health maintenance organizations became popular, boosted by Congress's enactment of the HMO Act in 1973. This act basicaUy provided employers with the opportunity to offer health maintenance organization Journal of Health Care for the Poor and Underserved · Vol. 8, No. 3 · 1997 Cebrun 385 (HMO) health plans to their employees. In addition, the art gave financial incentives in the form of loans and loan guarantees to newly developing managed care organizations.1 Today, our health care system is undergoing a simüar restructuring. Strong forces have shaken and shaped the health care debate in our country. These forces demand that we look at the ultimate impart of the costs of goods and services, induding health care. Competition from global markets has made the United States more concerned about how much it spends and what it gets in return. The United States is the only developed country with no national health care poUcy. What exists is a national health insurance system, which is essentiaUy a pubUcly financed system. Employers who provide health insurance to their employees have an opportunity to deduct benefits payments, thereby reducing their tax obUgation. Therefore, most of aU the health care that is financed in the United States, with the exception of that which comes directly out of the patient's pocket, is a result of an indirect government subsidy. There is no sense in debating whether there is a role for the federal government in financing health care because it already exists in the form of Medicaid, Medicare for the elderly, and other programs for eUgible persons, such as veterans. Therefore, when we look at the total picture, we can see that what exists is a pubUcly financed national health insurance system. The problem with this system arises when it comes to health care for the poor—who pays for their health care? In the United States, there are approximately 30 to 55 milUon people, depending on whose figures you want to accept, who have very poor coverage or no coverage. The federal government subsidizes a large portion of the health care costs for the indigent; state and county governments ultimately pick up a certain percentage of the total costs. Since it is through tax doUars that these payments are made, the pubUc actuaUy funds these services. And generaUy, this form of care is the most expensive form of care because it involves episodic and acute care. We have an exceUent medical care deUvery system but with poor access for a large number of people, which...