Waste, Duplication and Ineffective Care: Managed Care 101 in 2010 (Part IV)

November 18, 2008

Clearly, the mission of Managed Care involves all parts of the value equation (See Part III of this Series): quality (both technical and as perceived), cost-if not cost-effectiveness and access.

(

Clearly, the mission of Managed Care involves all parts of the value equation

See Part III of this Series

): quality (both technical and as perceived), cost-if not cost-effectiveness and access. As with the proverbial stool, when it is missing a leg, it is unstable. Cost, however, has always been the bane of Managed Care's existence.

Therefore, let me quote from

Healthcare Economics

an important

, but gross understatement with the caveat: the ends do not justify the means:

"Peter Orszag, director of the Congressional Budget Office, estimates that 5 percent of the nation's gross domestic product--$700 billion per yea--goes to tests and procedures that do not actually improve health outcomes...The unreasonably high cost of health care in the United States is a deeply entrenched problem that must be attacked at its root."

I suggest reading the entire report as it is fundamental for the future health care in this country. Not surprisingly, it speaks to all the same issues as does "Managed Care, its "past, present, and future --

prospective payment (read: accountability), a centralized authority (read: single payer) and consumer choice (notably balanced with community rating and a purchasing pool that counteracts the issues of adverse selection).

Reference:

"

U.S. spends $700 billion on unnecessary medical tests

."

in

Healthcare Economist

,

Health Insurance

November 7, 2008

Public Policy

The report continues: "There is little doubt that much of health care is unnecessary or at least is not worthwhile in the cost-benefit sense. However, how do we fix this problem?" These are the sentinel issues: