Managed Care 101

When most of us chose medicine as our profession, little did we know how much basic economics and business principles would wind up affecting the manner in which we would be forced to deliver health care. However, for the past several years we have been in a major market transition, fueled by the underlying economic principles of supply and demand. The major factors of oversupply certainly have included too many hospital beds, too many physicians, particularly too many specialists in the more desirable locations in the United States. On the flip side of the economic theory, a limited amount of financial resources has been available for third-party reimbursement (either by federal, state, or business payors) as well as a limited desire to regulate the apparent demand of the industry. This became very apparent in the summer of 1994 when the Democratic president and Democratic congress could not pass a comprehensive health care reform bill.

Instead of comprehensive health care reform in the United States, we now have a marketplace where "Managed Care" is making changes in the way health care is delivered and the way physicians and other providers of health care services are reimbursed.

As Managed Care enrollment continues to grow, currently at more than 10 percent per year, the number of patients being treated and the number of physicians under contract to treat those patients continues to increase. Currently more than 150 million Americans are receiving care from various managed care organizations, such as HMOs, EPOs, and POS plans.

It has been, and will continue to be for some time to come, turbulent times for health care. It has been very difficult for patients, physicians, and all providers of health care. The original, idealistic concept of "managing" a patient's "care" has for all intent and purposes ended up being not much more than "managing" a patient's health care "costs".

Most of us would agree that the "old" health care system could not survive without changing because it was unbalanced in favor of doctors and patients. The "new" system is presently equally unbalanced in favor of insurance companies and employers/payers. No system can survive unless it meets the needs of patients. Ultimately, the market will stabilize. This will happen when the pendulum returns to the point at which an optimum balance is achieved among all players, including patients, providers, employers/payers and insurance companies. In the meantime, we strongly advocate a close, open, and honest relationship between patients and their providers. Working together as a team, will give us the greatest chance for success in providing you with the best in what you really need in health care.