Will managed care mimic fee-for-service?

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To paraphrase Mark Twain, rumors of the indemnity plan’s demise are greatly exaggerated–that is, if you ask hospital and health care network CEOs. Forty-eight percent of such executives surveyed by the consultant Arthur Andersen and Co. believe indemnity plans are here to stay. Mark D. Oshnock, head of Andersen’s East Region Healthcare Consulting Group, says this belief is indicative of a larger trend: Consumers are flexing their muscles.

With respect to managed care plans, Oshnock says, “We have seen a lot of movement in the last 12 to 18 months away from the heavy-handed gatekeeper model. The more plans can look like fee-for-service models at HMO prices, the better off they will be.”

The survey also reveals that risk contracting is exploding. The number of respondents who plan to enter some kind of risk arrangement is more than triple what it was two years ago. “The first to market wins,” Oshnock says.

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