Posted: 8 Dec 1998
The trend toward managed care presents promising opportunities for improving the health of large populations. Capitated financing arrangements and performance-based reimbursements, in theory, create imperatives for these plans to promote behavior that reduces health risks and to emphasize preventive services that may forestall costly future medical treatments. By extension, healthier communities minimize the assumption of risk and medical resource utilization, particularly as new members join a particular health plan.
Managed care can further improve the health of the nation by eliminating a serious structural deficiency in public health. These organizations, rather than governmental public health agencies, are more closely associated with the health of the people and, thus, are better positioned to observe and influence personal behavior, identify clusters of diseases and injuries within the enrolled population and, through investigation, find out what caused them. The authors suggest that the private provision of certain public health functions such as clinical prevention and personal medical services should result in efficiencies and cost-savings, thereby allowing public health to fulfill its quintessential role of developing population-based strategies to identify health risks and to improve behavioral, environmental, social and economic conditions that affect the health status of wider populations.
A recognition of managed care's stake in public health does not, however, resolve the complex issues of how to achieve a redistribution of resources to focus more on prevention and community public health services. The reality is that managed care's norms and practices emphasized short run profits, while returns on investment in community health are profitable in the long run. The authors conclude that the basic power or obligation of organized society to protect and preserve the health of populations justifies government action to change the incentive structure. Through well-conceived delegations, incentives and regulations, managed care can complement government public health activities to maximize societal welfare. Further, the authors argue that managed care organizations have independent social and ethical obligations to add a community component to their activities.
Suggested Citation: Suggested Citation
Gostin, Lawrence O. and Bowser, Rene, Managed Care and the Health of the Nation. Southern California Law Review, Vol. 72, Summer 1999. Available at SSRN: https://ssrn.com/abstract=139927