Then the company's benefit managers go from room to room and plan to plan, playing one offer against the other. But the company wants to make it a very, very competitive situation. And for dessert, humble pie was served. Maybe managed care never really was that big, bad, swaggering, cost-crunching behemoth that it was made out to be. Employers and other payers, which have gotten used to low health care cost increases dating back to 1995, are pushing on managed care from one side.
Many companies also acknowledge that they expanded too fast and are now deserting certain markets.
If Wall Street's reaction is any indication, this is just what the doctor ordered. Notwithstanding Oxford Health Plans' problems, HMO stock prices have jumped by more than 35 percent this year. Still, it is impossible to ignore the Greek chorus of analysts, academics and managed care executives who see the recent squeeze as portending something a lot more fundamental than the need for a price fix and a pat on the back from a twitchy stock market. What we are seeing, they argue, is the end of the easy part of managed care, when driving a hard bargain and shortening hospital stays was enough to stir up a frothy mixture of high margins, cut-rate prices and expanding market share. The next frontier, he says, is management of clinical care and of lifestyle.