The End of Managed Care

Managed care embodies an effort by employers, the insurance industry, and some elements of the medical profession to establish priorities and decide who gets what from the health care system. After a turbulent decade of trial and error, that experiment can be characterized as an economic success but a political failure. The strategy of giving with one hand while taking away with the other, of offering comprehensive benefits while restricting access through utilization review, has infuriated everyone involved. The protagonists of managed care now are in full retreat, broadening physician panels, removing restrictions, and reverting to fee-for-service payment. Governmental entities are avoiding politically volatile initiatives to balance limited resources and unlimited expectations. By default, if not by design, the consumer is emerging as the locus of priority setting in health care. The shift to consumerism is driven by a widespread skepticism of governmental, corporate, and professional dominance; unprecedented economic prosperity that reduces social tolerance for interference with individual autonomy; and the Internet technology revolution, which broadens access to information and facilitates the mass customization of insurance and delivery.