science to profits

Managed care returns?

My last post on healthcare costs looked at how hospital and professional healthcare costs were held flat during the nineties. In todays WSJ, an article asserts this was due largely to managed care, and goes on to describe in some detail how managed care is “returning”, although of course in a much better form.

Here is how things seem to be unfolding to me.

  1. We have a healthcare cost problem and one of the few successes in reducing cost growth rates was the managed care initiative of the 90’s (hated by patients and doctors alike for a variety of reasons);
  2. As a society, we are really focusing now on what I call cost effective healthcare (as distinct to healthcare with the best possible outcomes);
  3. The most cost effective healthcare has two aspects. The uncontroversial part involves getting the best results possible per dollar spent. However, the flip side is the need to ration “unnecessary” care so as to cap the total costs.
  4. There are lots of very promising initiatives that are hot topics at present (Accountable Care Organizations, EHRs and the like) which are basically tools or organizational structures designed to try and move closer to cost effective healthcare.
  5. While the discussion in the media focuses on the potential for improving the lot of those who get substandard care today, it seems to me that an equally important role of these new approaches to patent care will be to ration “unnecessary” care. In other words, a return to some type of managed care seems where things are heading.
  6. With this in mind, the WSJ article seems to be describing an unsurprising “next step”.
  7. But, I am guessing this will prove controversial once the mainstream population figures it out. After all, one person’s “unnecessary care” may be another person’s life-saving intervention.

It will be interesting to see where this goes next.


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