An Empty Toolbox? Changes in Health Plans’ Approaches for Managing Costs and Care

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Abstract
Objective. To examine how health plans have changed their approaches for managing costs and utilization in the wake of the recent backlash against managed care.Data Sources/Study Setting. Semistructured interviews with health plan executives, employers, providers, and other health care decision makers in 12 metropolitan areas that were randomly selected to be nationally representative of communities with more than 200,000 residents. Longitudinal data were collected as part of the Community Tracking Study during three rounds of site visits in 1996–1997, 1998–1999, and 2000–2001.Study Design. Interviews probed about changes in the design and operation of health insurance products—including provider contracting and network development, benefit packages, and utilization management processes—and about the rationale and perceived impact of these changes.Data Collection/Extraction Methods. Data from more than 850 interviews were coded, extracted, and analyzed using computerized text analysis software.Principal Findings. Health plans have begun to scale back or abandon their use of selected managed care tools in most communities, with selective contracting and risk contracting practices fading most rapidly and completely. In turn, plans increasingly have sought cost savings by shifting costs to consumers. Some plans have begun to experiment with new provider networks, payment systems, and referral practices designed to lower costs and improve service delivery.Conclusions. These changes promise to lighten administrative and financial burdens for physicians and hospitals, but they also threaten to increase consumers’ financial burdens.