A Conversation With John Marcille: A Front Row Seat for 22 Years

As the editor of Managed Care steps down, he recalls his disbelief when Newt Gingrich told him in 2005 that everyone should be required to purchase health care, discusses the erosion of insurance through high-deductible health plans, and more

Very few people had heard of managed care when editor John Marcille joined the staff of this publication, which bears the name of the now-ubiquitous term. Brought on in 1992 for the second issue, he stayed more than two decades, helping to chronicle a huge range of growth and change in the business of health care.

Marcille is now retiring. His tenure has included positions as senior editor and managing editor at Managed Care and as managing editor of Managed Care Pharmacy Practice. He was named editor of Managed Care in 1997. He spoke recently with Managed Care contributing editor MargaretAnn Cross.

Managed Care: What appealed to you about covering health care when you started at Managed Care?

John Marcille: As a newspaper reporter, I had covered the establishment of the first HMO in New York, which was a branch of Kaiser Permanente in a suburb of Albany. They called it an HMO, and we all said, “What?” Most people in the country had never heard of an HMO. So I was already more acquainted with the idea of managed care than most.

MC: Who were Managed Care’s readers?

Marcille: When we started, they were mostly primary care physicians and cardiologists. Once we folded Managed Care Pharmacy Practice into Managed Care in the mid-’90s, we shifted the focus to managed care decision makers, clinical executives, and top executives at health plans. They are still our core readers but not our only readers, by any means.

MC: Have physicians remained interested?

Marcille: Yes. Physicians are desperately interested in managed care because that is where most of them get the greatest part of their income. They need to know what’s on the managed care agenda and where they fit in.

MC: The Clinton health care plan was announced in 1993. That must have brought a lot of attention to managed care.

Marcille: It was a big event for managed care, and I wrote a lot about that. I actually read the entire bill — 1,342 pages.

MC: What was most intriguing?

Marcille: It would have implemented managed competition, in which a small number of health plans in a region would each contract with specific doctors and hospitals and then they would compete. It would have ended what was just starting to become common — doctors contracting with multiple health plans. Managed competition was going to control costs and provide great service because you would have a defined group of providers, all working together. That made sense to me, but it was such a radical change that it seemed unlikely that it would get through Congress. And, of course, it never did.

MC: Even after that, managed care continued to grow.

Marcille: Managed care made sense to employers, and it made sense to patients, until the stories about denial of care started coming out in the mid-1990s. Often the stories didn’t get down to whether the denials were appropriate. They often were.

MC: Because they were required to pay only for the care specified in their contracts with employers?

Marcille: All of the negative publicity was about the health plans, when the employers were to a large degree calling the shots. Employers set the rules, and managed care companies evaluate each case to see whether it fits the rules or not. This is true in employer-sponsored plans and, for that matter, in insured products, because the employer has chosen that product. Even today, if you are a patient who wants a certain kind of experimental cancer treatment and experimental treatment is not a part of the contract, then you are not going to get that care. Should the contract have covered it? That’s another discussion entirely.

MC: Managed care evolved quite a bit during that time.

Marcille: The first part of the 2000s was a period of developing processes and tools — and recovering from the hit that it had taken when state legislatures started mandating coverage of specific procedures. The control that managed care had imposed on health care costs went out the window.

MC: And capitation went out of favor.

Marcille: Capitation was the scariest thing to doctors back then. When doctors accepted a fixed fee for the care they provided to a certain number of patients, that was sometimes OK. But even the large medical groups couldn’t handle global capitation, when the practice had to take on the risk for other kinds of care, primarily hospital care. At the same time, doctors were complaining about cookbook medicine.

MC: With all of the negativity, did you think about changing the name of the magazine?

Marcille: The owners and I talked about that. We agreed that if the term continued to have a strong negative connotation with the public, or if it developed a strong negative connotation among our readers, then we would consider a change. It never came to that. These days, I think, managed care is a neutral term. It also doesn’t only mean HMO now; it’s a bunch of interlocking methods for providing care that is, let’s face it, as good as or better than what has been provided in the past but that costs less than it would otherwise.

What we are talking about with high-deductible plans is the erosion of insurance — nothing less than that.

MC: Consumer-directed health care was another big idea for reducing costs.

Marcille: Consumer-directed health care is more forthrightly understood as high-deductible health plans. Its advocates say that quality will improve and costs will be controlled because patients have skin in the game, as the saying goes. Too often, though, it’s a subterfuge for shifting a lot of the cost to the patient — and not premium cost, but at-risk cost. Employers win if the patient is more prudent, but they also win when the patient can’t afford his share and therefore doesn’t seek the needed care. A lot of people — most people, I suspect — have trouble paying for even a few thousand dollars of health care. So what we are talking about with high-deductible plans is the erosion of insurance — nothing less than that.

MC: We do seem to have continual change in the industry.

Marcille: But many people who observe industries at the macro level feel that health care is among those that have changed the least, that it hasn’t kept up with management trends, and that it doesn’t make good use of information technology.

MC: Yet health plans are innovating with regard to payment methods.

Marcille: A lot of these concepts have been around for a long time. Some of them, such as bundled payments, seem to be more promising than others. And capitation has its uses. Both of those ought to be helpful in managing cost and neutral or positive in terms of the patient experience and outcomes. We are seeing some movement away from fee-for-service payment, and that can only be good — unless it is replaced with something that has just as much of a perverse incentive as fee-for-service does.

MC: Does the return of capitation surprise you?

Marcille: The concept of capitation wasn’t a failure. The failure was the inability of the health system to withstand the onslaught of anecdotal reports of the abuse of capitation and the abuse of several kinds of utilization-control measures. But the degree to which those controls are used now is less than it was when managed care was ascending in the ’90s. The people that I talk with at the health plans are glad; they don’t like conflict with providers, and now that the providers are more educated and to some degree sharing risk, from the point of view of the health plan, things aren’t so bad.

MC: You wrote about computerized health records early on.

Marcille: Computerized health records have been a big disappointment to me. I remember writing a cover story for Managed Care Pharmacy Practice more than 15 years ago about this wonderful new technology that, at the time, was pretty much confined to large organizations such as Kaiser Permanente and the Veterans Administration. I misjudged the amount it would cost and the degree to which there would be interoperability problems.

MC: Have you guessed wrong in other areas?

Marcille: About 15 years ago I was talking to the one of the publishers of Managed Care, and he said that he had no doubt that we would have a single-payer health care system in America within a decade. That seemed kind of soon to me. We were both surprised that there was never any strong movement toward single payer. I still think that such a system could be good for the country and good for patients, and that it could be tolerated by providers and insurers, who could, under the right design, have a strong role. I don’t have any idea what the tipping point would be. Maybe costs are under control, but I doubt it.

MC: What will the shift in political power mean for health care?

Marcille: More than half the country thinks that Obamacare is a mistake, but I don’t think we have had enough experience with it to make that decision. The idea of covering more people makes great sense to me — and if that involves an income transfer, so be it. We’re always having some kind of income transfer: sometimes down, sometimes up. The individual mandate? I spoke with Newt Gingrich in 2005, and he said that we had to require everybody in America to have health insurance, that it was the most responsible thing to do.

MC: Should there have been a national program to restructure health care sooner?

Marcille: Of course there should have been. And every dollar that you spend on health care that you don’t need to spend is a dollar that you are not spending on Starbucks coffee, craft beer, or trips to Disney World. Or the opera or camping in the Adirondacks.

MC: Reducing costs has been a constant focus over the years.

Marcille: Everybody in health care says we have to control cost, and many talk about efficiencies. But if you are being efficient, except in areas of medical technology, you are goring somebody’s ox, because otherwise, you are not reducing costs. If you are reducing costs, somebody has to pay for that.

MC: Have your personal experiences with health care been different because of your job?

Marcille: I probably question doctors more and am more skeptical about treatments. For example, I went to see my doctor because I had a severe respiratory ailment. The doctor prescribed an antibiotic, and I said, “Are you sure? You don’t even know that this is a bacterial infection.” He agreed and told me to wait several days, and if it wasn’t resolved, to fill the prescription. Of course, it did resolve, and I didn’t fill the prescription. The insurer benefited by not paying for a prescription; I benefited because in the absence of disease, antibiotics are not good for your body; and the doctor might have benefited by having a knowledgeable patient.

MC: After editing Managed Care for 17 years, you know more about health care than the average person. What don’t your neighbors understand about it?

Marcille: People think they are entitled to have their insurance pay for anything they want. It’s always a rude awakening when insurance won’t pay for the fad of the year. People don’t understand why they can’t go to the doctor they’ve been going to for 20 years, but the health care system knows very well why it’s doing what it’s doing. The theory is that narrow networks comprise providers that are better than average and control costs better too. Both are in the interest of the guy down the street, but he may not see it that way. People still don’t typically know whether the hospital they’re going to is a good hospital or not. Even me. I really should have done my homework to find out which hospitals have the lowest rate of superbug infections, for example. Maybe after I retire I’ll have time to look into that.

MC: Thanks, John.