The Failure of Managed Care

From the care provider’s perspective, managed care has been historically coercive and adversarial. Because health insurance developed on the private insurance model, preservation of insurer assets was and will continue to be the primary imperative. Insurer attempts to control costs and preserve assets have overlaid care with a set of coercive procedures and cost cutting schemes designed to protect the insurer assets. Limit coverage, deny payment, lower the fees paid for services, and many similar actions have created a gulf between doctors, patients, and insurers. From the insurer’s perspective, of course, these adversarial procedures are not seen as inappropriate, simply necessary operating rules based on sound underwriting.

From the broader perspective, however, the adversarial and coercive rules that insurers apply in making health care payments have been devastating. The cost of care rises annually to levels much higher than that seen in other systems providing similar levels of care. Care has become unaffordable for many employers and individuals. Coverage is denied to many with pre-existing conditions. Care providers spend millions on administrative costs to secure payment for treatment. Treatment is delayed or denied while physicians wait for approvals from insurers. The litany of failures in the current health care system can go on but the picture of failure and weaknesses are evident and clear.

The fault for out-of-control medical costs lies not with the insurers, however, it falls on the shoulders of doctors who prescribe billions in unnecessary treatment each year. Too many tests and studies, too many referrals to specialists, too many treatments, and too many surgeries. It all adds up  to hundreds of billions of dollars, perhaps trillions, in unnecessary expenditures which we pay for in our  health insurance premiums. How then do we connect the dots? How does insurer behavior drive physician behavior?

By techniques such as capitation and reducing fees, insurers have fundamentally changed the relationship between patients and their physicians. In order to maximize earnings, primary care physicians must now treat more patients, spending less time per patient. More time is given over to the administrative needs of the insurer-payers. Physicians are driven into larger groups or hospital owned groups in order to achieve efficiencies needed to sustain a medical practice. Medical care becomes more regimented, less of an art. As a result, the doctor – patient relationship suffers, medical malpractice increases, and doctors prescribe volumes of tests, studies, and treatment because that’s where the money is. Get an Xray, CAT scan, an MRI. See the patient in two weeks instead of four. Push the insurer guidelines to maximize the care dollar. Why should the doctor care about these additional costs? The insurer isn’t making the doctor’s job any easier… their making it tougher, more costly to be a doctor, and probably less enjoyable.

The managed care capitation has caused doctors to jump from examining room to room, patient after patient, in order to bring some efficiency to the practice. Too much time with a patient and we lose money. Or we have to spend less time with another patient. No time to explain the treatment, no time to get to know the patient, no time to follow up with the patient, no time for quality medical care. Medical care has become emergency room care in the medical offices and clinics. “Where does it hurt, I’m sending you for tests and studies, you’ll be fine, OK?” Of course not all practices function like this but enough do that medical costs are rising out of control, medical malpractice cases are driving malpractice insurance costs skyward, and patients are not any better off than they would be if we spent a third less on health care.

There should be no doubt that managed care has undermined the bedrock that supported quality, cost efficient, medical care in the United States. It turned medical care into a commodity like MacDonald’s hamburgers.

How can we change? We can start by asking questions and seeking the truth about health care. Only then will we have the knowledge to bring about the necessary reform.