However, one study assumed that POS plans were also tightly managed. The assumptions for the increase in health plan expenses due to induced demand ranged from 5 percent to 69 percent. The other studies did not make these assumptions. Two studies, however, assumed that a substantial shift would occur. The impact of managed care.
Utilization management is key to constraining health care costs.
Coopers and Lybrand assumed that 50 percent of consumers would be in an HMO or POS plan, and that both of these plans are tightly managed. However, POS plans are typically classified as being moderately managed because they cover services provided by non-network providers, while HMOs do not. Although a law could require parity with respect to utilization management, to date no state or federal law has mandated and enforced such a requirement. Therefore, this assumption currently is not very realistic. A shift from the public to the private sector.