Correspondence
Controlling Costs through “Managed Competition.”
N Engl J Med 1993; 329:885-886September 16, 1993
- Article
To the Editor:
Dr. Relman's editorial on “managed competition” (Jan. 14 issue)1 is right on target. I would like to add two more points to bolster his argument.
He is correct in pointing to the “intrusive surveillance and control methods” to reduce costs used by third-party payers when they try to second-guess physicians' efforts to do what is right for patients. There is another troublesome feature of these cost-control methods. Many managed-care plans, particularly those of health maintenance organizations or preferred-provider organizations, make a patient's physician responsible for denying or approving care. This clearly puts physicians in an untenable position, for it is our responsibility as physicians to be patients' advocates, not the agents of third-party payers. It has been said that “no man can serve two masters,” and this conflict of interest strains the bounds of ethical conduct. The fixed-budget method that Relman supports would lessen this conflict and, as an additional benefit, would probably stimulate more research on cost-effective ways to practice medicine.
A second concern about managed competition is that the competition between third-party payers often results in a bidding war, with employers choosing the lowest bidder for their employees' medical insurance. Because third-party payers usually have provider contracts with only a limited number of physicians or groups of physicians, this leads to patients' being forced to change physicians periodically when their employer selects a different third party as the lowest bidder. This not only disrupts patient-physician relationships but also increases costs when the newly assigned primary physician has to repeat recent examinations or laboratory procedures to have a solid knowledge of his or her new patient.
1 ReferencesDonald N. MacKay, M.D.
Stanford Medical School, Stanford, CA 943051
Relman AS . Controlling costs by “managed competition” -- would it work? N Engl J Med 1993;328:133-135
Full Text | Web of Science | Medline
To the Editor:
I warmly applaud Dr. Relman's call for cost-contained excellence in medical care through a capitated system of organized services. Having participated in such a system in the United Kingdom, I can appreciate some of the attributes of his contentions. However, he falls short in recognizing, or else fails to recognize, an enormous barrier to such perfection. Each day, thousands of clinicians of differing competence face decisions about patients' treatment that pose a choice of direction: to adopt a clinical judgment and to treat without the use of expensive or invasive tests or, alternatively, to choose a course that avoids possible legal recriminations and to delay pursuing more vigorous and advanced methods of confirming the clinical impression.
The legal resources available to patients to penalize perceived errors of less-than-perfect methods of management are only minimally limited. The profound impact on a clinician who experiences the inevitable fallibility of even the best motivated and most carefully considered clinical judgments moves even the soundest of us to pursue a course described as “defensive medicine.” I am unsure how a physician with such admirable motives as Relman can suggest unilateral capitulation by his physician constituency, without even a cursory mention of the cancer of malpractice that dominates the day-to-day decision-making processes that a large majority of ethical, concerned, and educated physicians have to deal with.
I await a meaningful statement from our new administration addressing this overwhelming concern felt by innumerable members of our profession practicing without the benefit of the defensive umbrella offered by the ivory-tower environment of our tertiary care academic institutions.
Gerald Green, B.S.C., M.B., Ch.B.
16500 Ventura Blvd., Encino, CA 91436To the Editor:
Dr. Relman points out some of the advantages of managed-care systems and also certain inherent limitations. I believe that the most important thought of his editorial was contained in its last sentence, in which he hopes for new initiatives in health care delivery that would embrace the “idea that would put the responsibility for cost and quality control where it belongs -- on physicians and their patients.” It should be obvious to us all that centralized bureaucratic third parties cannot micromanage medical care. Even local review or oversight agencies are unable to ensure quality medical care and eliminate discretionary or even some patently unnecessary spending. As I see it, the only truly effective way to address these problems is to make patients somehow financially responsible, at least in part, for their health costs. The concept of medical savings accounts or medical individual retirement accounts, as expounded in a publication of the National Center for Policy Analysis,1 is very appealing in a number of ways. In broad terms, such a plan would eliminate or greatly minimize the need for external third-party review and control, since patients would necessarily become much more concerned and informed. In other words, they would become their own utilization reviewers; and although it may sound crass, they would truly become consumers of medical care.
If these “consumers” are given the tools and incentive to put the brakes on medical spending, that will happen. If we truly allow market forces to work in health care, they will.
1 ReferencesJ.D. Wright, M.D.
Joliet Medical Group, Joliet, IL 60435Author/Editor Response
Dr. Relman replies:
To the Editor: Dr. MacKay raises the important question of whether physicians in health maintenance organizations can be patients' advocates if they also act as agents for insurers in controlling costs. I think the answer is that good physicians must never withhold necessary or appropriate care simply to save money for insurers. Physicians -- and plan members -- should insist that the funding of prepayment plans be adequate to provide all truly needed services in the agreed-upon benefit package. Savings should come through administrative and operational efficiencies, avoidance of unnecessary hospitalization, and the prudent use of technology.
I agree that employment-based health insurance may disrupt patient-physician relationships when employers change the health plans offered to their employees. That is one of the many reasons I believe the link between employment and health insurance should ultimately be broken.
Dr. Green is correct in saying that health reform should include reform of the malpractice system. I would simply point out that organized solo practitioners are more vulnerable to tort litigation than physicians practicing in organized groups.
I do not agree with Dr. Wright that patients can and should “become their own utilization reviewers.” Patients are rarely able to judge what services they need. Moreover, allowing “market forces” to influence these judgments merely compounds the problem by introducing rationing by price. Markets always favor the well-to-do and put the poor at a disadvantage. That may be acceptable for most economic goods and services, but not for medical care.
Arnold S. Relman, M.D.
Harvard Medical School, Boston, MA 02115
