retirees. In addition, increasing numbers of Medicare-eligible individuals are joining Managed Medicare Risk Plans to reduce their out-of-pocket costs and eliminate the added expense of purchasing supplemental policies. The success that managed care plans have had in reducing the cost of care has made them very attractive to purchasers. Yet there is a concern whether managed care can continue to reduce costs and still provide Medicare patients with access to quality health care. On the basis of the experiences of some large purchasers, a degree of oversight of the performance of health plans is necessary to ensure a balance between these two forces.

The primary focus of HMOs is on cost reduction through the control of both the price and the utilization of care. To curb the uncontrolled increases in the costs of fee-for-service medicine, employers have embraced managed care without clearly assessing the potential weaknesses of such a system. Purchasers are becoming aware of the impacts that these forces will have on the service and quality of care provided to members of managed care plans. There is a growing concern about the for-profit emphasis of many managed care plans. The pressure to show a profit every quarter and to generate dividends to the stockholders could erode an HMO's commitment to deliver quality care. Many clinicians, purchasers, and consumers have expressed concern that the economic and utilization incentives of capitated, managed care plans may result in the underutilization of care and the erosion of customer service.

To ensure the success of managed care as a viable health delivery system for the future, the needs of the members of health plans must be balanced with the need to reduce the cost and make more efficient use of our health resources. Some large employers and purchasing cooperatives have implemented monitoring and oversight requirements for HMOs to measure the services provided to their employees. These purchasers play an active role in assuring their employees, retirees, and their dependents that the health plans available to them provide access to affordable, quality care. The role of capitated, managed care is critical in reducing costs, effectively managing the utilization of care, and performing efficient enrollment and contractual tasks for purchasers. However, the individual member needs



The National Academies | 500 Fifth St. N.W. | Washington, D.C. 20001
Copyright © National Academy of Sciences. All rights reserved.
Terms of Use and Privacy Statement