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Study: Consumers benefited most during '90s conversion to managed care

MANAGED CARE May 2001. © MediMedia USA
News and Commentary

Study: Consumers benefited most during '90s conversion to managed care

MANAGED CARE May 2001. ©MediMedia USA

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Out-of-pocket spending on health care went virtually unchanged from 1990 to 1997, thanks in large part to employers' conversion from indemnity plans to managed care. Consumer spending for medical care actually fell 27 percent, though that was more than offset by a 28-percent rise in premium expense. Out-of-pocket spending on prescription drugs dropped 8 percent.

The resulting overall 4-percent increase, though coinciding with an unprecedented lull in health care cost inflation, was well below the general inflation rate for the period. These findings, the authors argue, suggest that the emerging dominance of managed care plans — which, by benefit design, tend to mask the actual cost of care — has shielded patients from medical expenses and inflation. Ironically, this occurred at the same time that the managed care backlash developed.

SOURCE: GABEL JR, ET AL. TRENDS IN OUT-OF-POCKET SPENDING BY INSURED AMERICAN WORKERS, 1990­1997. HEALTH AFF. 2001. 20(2):47­57.