Managed Cost, Mismanaged Care

This is the first in a series of articles examining the phenomenon by which health care policy has come to be dominated by a single-minded desire for cost control, while concerns about maximizing the quality of care have been downgraded or ignored entirely.

Our research and reporting identifies three ideological underpinnings for this shift: (1) the selling of the idea that a competitive “free market” environment could work in the context of the provision of health care and health insurance;  (2) the promise that the interests of a for-profit industry were aligned with the interests of citizens who needed health care; and (3) the assumption that rising costs had to be constrained by reducing health care usage — an assumption made without asking the questions, “What is the highest standard of care that we can achieve?” “How far below that standard are we, and for how many?” “What would such a system cost?” or “How can we minimize the extent of deviation from the highest standard of care if we as a society decide that we prefer to have some of our fellow citizens go without that highest standard of care?”

This article describes the origins of the Health Maintenance Organization (HMO) model, the modern incarnation of that model, and the evolution of HMOs to the vehicles through which a for-profit health insurance industry came to dominate the market by the 1990s.

The next article in the series will examine the crucial role that Clinton-era “New Democrats” played in promoting the view that the principal problem to be addressed was cost control, and that the best and only solution to providing health care was through a for-profit, market-based system of insurance (albeit a regulated one), not a single-payer or not-for-profit HMO model.

— Editor