CONSUMER DEMAND FOR HEALTH CARE

Consumer Demand for Health Care

Consumer Demand for Health Care

Introduction

Health care in the United States has been revolutionized by the introduction of managed care. Used by both public and private auspices, managed care is an alternative to fee-for-service health care. In managed care arrangements, the financing and delivery of medical care are provided through contracts with hospitals, clinics, nursing homes, home health care agencies, and other providers. It has been described as a health care delivery system in which a variety of methods are used to contain the costs of services while maintaining quality of care. The major types of managed care plans include managed indemnity, preferred provider organizations, exclusive provider organizations, point-of-service plans, and health maintenance organizations.

Spurred by escalating health care costs, managed care has experienced tremendous growth over the past decade. Recent statistics indicate that approximately 65 percent of people insured through employers, or 50 million people, are served through some form of managed care. State Medicaid systems increasingly are turning to managed care arrangements to deliver health care services.

For some, managed care offers an affordable alternative to health insurance. On the other hand, a growing number of individuals believe that they are receiving less than adequate health care and fewer benefits under these plans. For instance, many employees are paying greater shares of their health care premiums and medical bills. These concerns, added to the fact that corporate interests focus on increases in dividends, create a health care environment full of practice pitfalls for the professional social worker.

The effect of managed care on the practicing social worker has been documented throughout social work literature.

Background

For most of the twentieth century, the traditional U.S. health economy had three defining features:

Patients relied on autonomous physicians to act as their agents.

Patients received complex care from independent, nonprofit hospitals.

Insurers did not intervene in medical decision making and reimbursed physicians, hospitals, and other providers on a fee-for-service basis.

These features helped patients solve the problems of determining what medical services to buy, where to buy them, and how to assure coordination of care. But there has always been one drawback—the resulting health economy is very expensive. Back in 1960, health care expenditures accounted for just 5.2 percent of the U.S. gross domestic product (GDP), and per capita spending on health care was just $149 annually (adjusted to 1997 dollars).

Even so, Americans still spent 20 percent more per capita on health care than anyone else. (Canada was next at $123 annually, adjusted for exchange rate differences.) Costs continued to increase through the 1960s, to the point where health care accounted for 7.3 percent of the U.S. GDP in 1970, and per capita spending of $357 was 27 percent higher than anywhere else. Though spending more on health care, Americans did not appear to be healthier. Key health indicators such as life expectancy were no higher in the United States then in other developed nations. Health policy analysts began to wonder whether Americans were getting their money's ...