Policy Makers Have ‘Little Understanding’ of Managed Care Organizations’ Evolution, Report Finds

Policy makers have "little understanding of the evolution of managed care organizations," including their structure, behavior, financing and "particularly regulation," a new report from the Robert Wood Johnson Foundation's Changes in Health Care Financing and Organization program has found. According to the report, titled "The Challenge of Managed Care Regulation: Making Markets Work," states have passed more than 1,000 managed care laws between 1994 and 1999, and the lack of "coordination" among states and the "diversity" of regulations have left managed care organizations to face a "complex regulatory scheme." Although lawmakers agree that they must regulate the industry, the report found that they "differ markedly about how much and what type of regulation is necessary." The report -- which provides policy makers with a "framework for thinking about the implications" of managed care regulations -- found that lawmakers have passed legislation "haphazardly," relying on "anecdotal evidence," consumer and provider "pressures" and "political ambition" rather than on "formal analysis" ("The Challenge of Managed Care Regulation: Making Markets Work," August 2001). "To date, regulations have been implemented primarily on an ad hoc basis in response to anecdotal evidence, which makes drawing conclusions about their impact on markets and on policies very difficult," Deborah Rogal, deputy director of the HCFO program and co-author of the report, said. Anne Gauthier, director of the HCFO program, added, "We hope that this report provides the context as well as the fuel for analysts working with federal and state policymakers facing real decisions about new and existing regulations" (HCFO program release, 8/24). The report is available online. Note: You must have Adobe Acrobat Reader to view the report.