HMOs vs. Managed Care

In an interesting piece for TAP, Shannon Brownlee argues that we shouldn’t let the “managed care” debacle of the 1990s discredit the successful HMO model on which it was supposed to be based. She says “There are only a few real HMOs in the U.S.,” and “a cousin of the HMO, the salaried group practice, is only a bit more common.” I won’t try to summarize the analysis, since I think I’d do a bad job. I think, though, that this tends to support the politically unpalatable conclusion that for-profit insurance companies would have very little role to play in a well-functioning health care system. Obviously, people who need to try to make changes in the real world don’t want that to be the case, but “saying no” to patients is an important part of a well-functioning system, but when the institution saying no is a profit maximizing firm patients will, with good reason, believe that “no” is being said to protect the bottom line rather than for their own good.