NEW YORK, April 02 (Reuters) -- A long-respected expert on the health care industry believes the managed care 'experiment' will probably end in failure.
"Managed care, of and by itself, will be unable to answer the needs of the American people for universal coverage, sustainable financing, and better care," says Columbia University's Dr. Eli Ginzberg in a "Sounding Board" piece published in this week's issue of The New England Journal of Medicine (NEJM).
In an accompanying editorial, NEJM editor-in-chief Dr. Jerome Kassirer admits that Ginzberg's previous studies of the health care industry, spanning the past 40 years, have already produced "many accurate predictions."
Ginzberg now believes (along with his Columbia colleague and co-author, Miriam Ostow) that managed care cannot sustain its current growth and industry dominance.
First of all, he says, costs will continue to rise. "Market competition notwithstanding, technological innovation is a powerful contributor to higher costs," Ginzberg points out.
Added to these increased costs is the fact that the average health maintenance organization's (HMO) growth depends on steadily increasing member enrollment. Ginzberg points out that "two thirds of all Americans working for medium-sized and large firms... (already) belong to a managed care plan." In the meantime, "the Medicare trust fund will be exhausted by 2001 and... the first baby boomers will reach the age of 65 in 2011." The result? Those hoped-for new enrollees will be older, sicker, and less profitable to profit-driven HMOs.
Of course, HMOs could cut back on services to save on expenditures. But Ginzberg believes the general public and legislators won't stand for that. "Public concern, discontent, and distrust have grown as enrollees have become increasingly aware of the more egregious profit-oriented practices of their managed care plans," he explains, pointing to policies such as "providing bonuses to physicians who cut back on referrals to specialists... and deliberately delaying the authorization of costly treatment without which the patient's health, and in some cases survival, may be compromised."
In short, Ginzberg believes that in the future, the managed care industry may be forced to 'pay the piper'. He expects government will "use their regulatory powers to ensure that plans do not engage in policies and practices detrimental to enrollee's health."
In the meantime, those same discontented enrollees may have new health care options to turn to. More and more often, Ginzberg says, hospitals are circumventing HMOs completely and making direct links with employers. And physicians -- who have felt increasingly threatened by the advent of managed care -- "are taking steps in smaller and larger groups to reestablish their influence." Already, Ginzberg notes, New York City's Columbia and Cornell University hospital physicians are forming loose unions, placing themselves into more powerful bargaining positions with HMOs. And physician-groupings like California's Mullikin, Med-Partners, and Caremark are now competing with -- and wresting members from -- established HMOs.
Finally, Ginzberg believes the supposed 'success' of managed care has not halted the upward spiral of health care costs. Those costs have quadrupled (from a $250 billion in 1980 to $1 trillion in 1995) in the same time that HMOs have mushroomed across the nation.
In his editorial on Ginzberg's look into the health care crystal ball, Kassirer agrees that the "one-model fits-all, gatekeeper-controller approach to health care is a failed experiment."
But he says the concept of managed care may not be altogether doomed. "In the long run, care that is tailored to the needs of the individual will win out," he explains. Kassirer believes that giving into demands for greater patient and physician freedom will ensure the average HMO's survival. "Managed care plans will have to show that they have become better citizens: that they care about more than profits, (and) that they do not skimp on care."
SOURCE: The New England Journal of Medicine (1997;336(14):1013-1014, 1018-1020)
