Overall, Managed Competition would strengthen the position of insurance companies by greatly increasing their leverage over providers. Only wishful thinking can project that insurance firms will use their increased power to lower their rakeoff, viz. The single payer approach would save additional billions on hospitals' and physicians' billing-Managed Competition, virtually none. The Canadian system pays hospitals on a lump sum basis, like a fire department in the U.S., eliminating per-patient billing, and hence the need to attribute costs for each aspirin tablet to individual patients and insurers. Winnowing the number of insurers to a handful, as promised under Managed Competition, would save little on hospital billing, and nothing on internal cost tracking.
Most savings come in the move from two insurers to one.
Moreover, intensifying insurers' oversight of clinical practice, as promised by Managed Competition, would increase the bureaucratic burdens for most hospitals and doctors. The Mayo Clinic already employs 70 full time people just to talk on the phone with managed care utilization reviewers. Because it bypasses administrative savings that would be available under a Canadian-style system, Managed Competition can only expand access by increasing health spending. Clinton's health transition team was demoted for saying this estimate was too low. It would ensconce a highly bureaucratic health care system, rigidly stratified by income.