Although Congress did not adopt a health care policy in 1994, the United States health care system is set on a course toward managed care. Increasing numbers of Americans are enrolled in a variety of managed care plans that include health maintenance organizations, among others. Of particular importance is that capitation dominates many of these programs. In capitation, the providers of health care take on much of the insurance risk through pre-paid plans. In addition, capitation provokes aggressive competition for the patients such that those organizations that acquire relatively few patients will fail, in a pattern analogous to that seen in business.
Capitation already makes up over one-half of the medical care in California.
About 5 percent of the medical care in Michigan is now capitated, but projections are for 50 percent or more within two to three years. These projections are based on the predicted outcome of the coming labor negotiations between the auto workers and the auto companies. A cost-cutting agreement is likely to include capitation and set a precedent for southeastern Michigan. Managed care in general and capitation in particular demand the most economical medical care. Academic medical centers will have great difficulty offering medical services at competitive prices while at the same time fulfilling their traditional missions of teaching and research.