Impact Of Purchasing Strategies On Local Health Care Systems

Lipson, Debra; De, Jeanne

doi:10.1377/hlthaff.15.2.62

Cited by 25 publications

(12 citation statements)

References 2 publications

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“…45 Large organizations continued to develop on both supply and demand sides of the health insurance and health care delivery markets, and both hierarchically integrated and contractually linked arrangements continued to spread. 46 However, the increase in state authority sought by the Clinton administration (and with it the increase in the proportion of the population with health coverage) was generally not achieved, despite some incremental gains. The most dramatic change in the balance of influence in the U.S. health care arena, rather, was the decline of the influence of the medical profession in the private market-oriented system, and the rise of for-profit private financial interests.…”

Section: H E a L T H A F F A I R S~m A Y / J U N E 1 9 9 9 D Y N A M mentioning

confidence: 99%

Dynamics Of A Changing Health Sphere: The United States, Britain, And Canada

Tuohy¹

1999

Health Affairs

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This three-nation comparison dissects the underlying factors motivating and inhibiting health system changes in the turbulent 1990s.by Carolyn Hughes Tuohy PROLOGUE: Canada, the United Kingdom, and the United States represent three largely English-speaking countries that, in their varying forms, are models of contemporary democracy. But the ways in which their health care systems have evolved are quite different as a result of choices made at critical historical points.In this illuminating comparative study, Carolyn Tuohy, a political scientist and deputy provost of the University of Toronto, discusses the substantial differences that separate the nature of the three health care systems and the resulting logic that shaped them. She emphasizes that an important characteristic of these systems is the different ways in which they have structured the relationship between the medical profession and the state.Tuohy earned her doctorate in political science from Yale University. Her research pursuits have focused on comparative public policy, with an emphasis on social policy. This paper distills an argument presented in her most recent book, which was just published by Oxford University Press: Accidental Logics: The Dynamics of Change in the Health Care Arena in the United States, Britain, and Canada. Tuohy also has authored numerous journal articles and book chapters dealing with health and social policy, professional regulation, and comparative approaches in public policy.

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Section: H E a L T H A F F A I R S~m A Y / J U N E 1 9 9 9 D Y N A M mentioning

confidence: 99%

Dynamics Of A Changing Health Sphere: The United States, Britain, And Canada

Tuohy¹

1999

Health Affairs

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“…However, as other studies have, our study found that only a few corporations were conducting significant quality-oriented activities. 11 These companies have worked individually and collaboratively with health plans to produce information to support the assessment of quality of care. Some have begun to consider quality in their purchasing decisions.…”

Section: How Companies Implemented Value Purchasingmentioning

confidence: 99%

Managed Competition In Practice: ‘Value Purchasing’ By Fourteen Employers

et al. 1998

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Are large employers the new champions of managed competition?b y Ja m e s M a x w e l l , F o r r e s t B r i s c o e , S t e p h e n Da v i d s o n , L i s a E i s e n , M a r k R o b b i n s , P e t e r T e m i n , a n d C h e r y l Y o u n g N ow tha t m a n ag ed c a re is the dominant model of health care delivery in the United States, employers are purchasing the majority of their health insurance benefits for employees through managed care organizations (MCOs).1 Many are conducting their purchasing by implementing "managed competition." The literature examining this trend has focused largely on its implications for the delivery of health care services; little has been published about how and why large companies have spearheaded this massive shift in purchasing practices. Accordingly, our research examines in depth the activities of fourteen large U.S. companies that have transformed their purchasing of health care benefits. These innovative firms revised their health benefits by combining some of the principles of managed competition with other business tactics that they found applicable to health benefits procurement.2 First, companies created new or-

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“…Although some PPOs have attempted to build in innovations that are associated with health maintenance organizations In addition, to attract the self-insured market, even health plans with integrated delivery systems, such as Kaiser Permanente, are learning how to bill third-party administrators for ERISA plans on a fee-for-service basis. 5 Thus, at the same time that traditional fee-for-service providers are being asked to assume financial risk, organizations steeped in cultures of costeffectiveness are being given incentives to regress to cost-based reimbursement.…”

Section: Bob Berenson a Physician Is Cofounder And Codirector Of Thmentioning

confidence: 99%

Marketwatch: Beyond Competition

Berenson

1997

Health Affairs

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Managed care organizations often cannot be easily differentiated on the basis of organizational characteristics. Even the provider networks that competing health plans use may be virtually identical in response to employee pressure for broad provider choice. In markets with many undifferentiated networks, current approaches to quality improvement may be more intrusive than helpful. Health plans should delegate quality improvement activities to constituent provider groups and need to explore collaborative approaches to quality improvement. Although many are uncomfortable with using financial incentives to influence professional behavior, the use of capitation to restrain costs is inevitable. Instead of arbitrarily limiting financial incentives, consumers should be protected in market-compatible ways. In particular, expansive disclosure requirements and risk adjustment of both premiums and capitation payments are recommended as approaches that will reward highquality care.T HE LOGIC OF MANAGED competition suggests that within each health care market, networks with different and distinct organizational characteristics and internal cultures will form and compete, initially on price and style of care and later on quality and value. Individual consumers will be able to recognize the differences among plans and make plan selections based on their own assessment of comparative value. Assuming competition based on clear-cut organizational differentiation at the health plan and delivery system levels, some have envisioned competition even over standards of care. 1Health care markets have not evolved that way. The structures of most markets do not encourage consumer choice because of the paucity of employer-based purchasing coalitions, the lack of standardized benefit packages, and the relative lack of financial incentives to encourage value purchasing. It appears that, at least for now, purchasers' success in forcing premiums down through direct bargaining has obviated the need for enrollee incentives to choose lower-cost plans. Risk-adjusted premiums and capitation rates are not being used to reward plans and providers who care for sicker patients. Quality measurement remains in an early, developmental stage. Tight partnerships between health plans and providers have not emerged. Indeed, it appears that vertically integrated systems are dissolving into their constituent parts, and that "virtually" integrated organizations and lack of exclusivity have proved more flexible and efficient for plan and provider managers and more attractive to the market. 3Although markets have not evolved as envisioned or desired, some public-and privatesector activities in quality improvement and consumer protection still assume a managed competition framework.

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Impact Of Purchasing Strategies On Local Health Care Systems

Cited by 25 publications

References 2 publications

Dynamics Of A Changing Health Sphere: The United States, Britain, And Canada

Dynamics Of A Changing Health Sphere: The United States, Britain, And Canada

Managed Competition In Practice: ‘Value Purchasing’ By Fourteen Employers

Marketwatch: Beyond Competition

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