As the cost of health care jettisoned out of sight, something had to give. Managed care organizations sprung up and convinced the insurance companies that they could manage the insured patient’s benefits and even save the insurance company more money than their fee for the service. They would charge 15 percent for this and save the insurance company even more than their 15 percent fee, perhaps as much as 25 percent.
This occurred because these entrepreneurs noted a wide variation in what doctors spend on their patients, which of course comes from the insurance company. Some doctors would order more tests and treatments – sometimes 10 times more than other doctors. This is not unique to the US. It also occurs in countries with controlled government medicine. The logic went that if they could get half the doctors that are above average in costs down to the average, it would save about one-fourth of the health care costs.
But that may not have been the way it happened. Let’s take an ordinary headache that millions of people have. The primary GP or internist has to decide which of these millions just needs to take Tylenol or aspirin and which needs a brain scan to check on something more serious. I personally know some of the doctors at the top end of the scale. They are more skillful in convincing an HMO review nurse that their patient needs a CT scan, while the doctor at the low end of the scale is satisfied in simply telling his patient he tried to get one but the HMO or MCO denied it. Hence, the costs savings many have come from the low end of the scale rather than the high end as was predicted. Cheap care may have become cheaper and expensive care more expensive. The quality of care of the patients with articulate doctors didn’t suffer, but the patients with less aggressive but more sympathetic doctors got even worse care.
The point you have to remember is that when you obtain a health insurance plan that has a managed care organization distribute the funds, check further to see if you can upgrade to a plan without one. It costs me an extra $250 a month above the HMO rate to have a top-of-the-line plan. But still that’s less than half of the cost of running my car. And my body and mind are certainly much more valuable than my car. We do have to get our priorities in order.