Managed Care Outlook and Evaluation

At the start of the 21st century, the health care insurance system in the United States is at a brink. Managed care plans have grown to dominate the system, as noted above. While managed care has saved plan sponsors significant costs over the past 20 years, as compared to traditional fee-for-service plans, the system is now facing increased criticism from virtually all constituents for its complex processes, administrative burden, and perceived access restrictions to desired providers. Some believe that managed care plans have effectively run their course and, as a result, many provider organizations and legislatures, at both the state and federal level, are pressing for fundamental changes to dramatically revise or eliminate much of what the managed care industry has built.

However, proponents of managed care generally see beyond the immediate system problems and point to an ongoing evolution of the health care delivery and financing system. Managed care, in this context, is not an end point, but a continually improving process to control costs and demonstrably improve the quality of care delivered. At the center of the evolution is a huge paradigm shift in health care accountability, with members in much greater control of information and selecting those health plans and providers who demonstrate results in improving quality of healthcare and controlling unnecessary costs.

This shift towards increased consumerism in health care challenges the long-held premise that important health care decisions were primarily delegated to physicians and that health plan costs were primarily hidden from members through the third-party insurance coverage system. Health plans are investing heavily in new technology and data management systems to help members get access to information that can support a much broader role for them in making health decisions.

They also are using these new tools to help physicians practice evidence-based medicine. Improved performance will be increasingly expected as providers gain greater exposure to the best practices and outcomes measurement. Transforming health care delivery into a systematic, evidence-based approach based on best practice also will require proper realignment of financial incentives with clinical practices. Provider compensation models, which historically have relied on discounted fees in a managed care environment, also will continue to evolve to reward demonstrated quality.