American business, with double-digit annual increases in employee health costs, complained about being unable to compete in a global market. The federal government, picking up the tab for Medicare and Medicaid, experienced massive increases in the federal debt. Along came managed care, with its aggressive cost containment, prepaid health care coverage, and shift of financial risk to providers. The cost efficiencies of managed care helped fuel the booming economy of the '90s, contributed to the federal budget surplus, and reined in the growth of health care expenditures, which have approached the rate of inflation in some managed-care markets this decade. Looking strictly at its impact on the economy, managed care deserves some positive recognition.
Perception has a way of clouding reality.
Managed care, when done right, can improve the quality of health care. In HMOs, more patients receive necessary immunizations and screening services such as mammograms. Blood pressure, serum cholesterol, and blood sugar are better attended to in patients for whom these really matter. In these ways, managed care is a triumph of American medicine. Now let's look at the problems.