Washington Times Examines Problems with Managed Care

The managed care industry is "sick," and while patients' rights legislation "may mollify" some consumers, "those who know say it's too late to save" the system, the Washington Times reports in a feature look at the industry. In describing how the managed care industry operates and the current debate over reforming the system, the Times highlights the main complaints about health care delivery by a system initially created to shield patients from "backbreaking medical bills." For example, the Times describes many health plans' use of "prior authorization," in which doctors must receive approval from the health plan to refer a patient to a specialist or a hospital. If the advice of a doctor is "rejected," doctors may become "exasperated" and patients may "fee[l] cheated" out of care they expected the health plan to cover. Another problem, the Times reports, is health plans' use of "financial incentives" to determine physician reimbursement. Under such systems, physicians may be offered monetary rewards for limiting tests and procedures and "slash[ing] expenses." Though some MCOs are "trying to demonstrate" that incentives can encourage physicians to emphasize better preventive medicine, studies show that physicians and hospitals are "increasingly ... refusing" to accept managed care contracts or demanding higher reimbursement, while patients are successfully gaining greater access to physicians. The Times reports, "As managed care weakens, the need increases for a new way to assure that ordinary people can get medical care they can't otherwise afford. Yet financial consultants say any new system will cost more" (Gribbin, Washington Times, 7/30).