Not long ago doctors and hospitals were the unchallenged center of the medical world. No more.
Just since 1980, enrollment in health maintenance organizations (HM0s) has increased six-fold, and today more than 50 percent of all Americans get their medical care through a managed care system. Health care is no longer a series of individual transactions between patients and those who offer care. It is a corporate enterprise: Managed care companies control who provides and who receives services and under what circumstances. The delivery of health care has been utterly transformed in less than a generation -- except for the 37 million Americans covered by Medicare.
Medicare represents the last large fee-for-service health plan left, with only 10 percent of its recipients electing to join HMOs so far.
But change is coming to Medicare, and rapidly. Last week, Medicare trustees warned that the health system will be bankrupt by 2001, only five years from now and a year earlier than projected, unless Congress and the president work together to fix it.
President Clinton said the system can be fixed. Republicans said politics should be put aside to save the system, but blasted Clinton for vetoing their Medicare proposals of last year.
Medicare finances have worsened because of higher costs for home health care, nursing facilities and hospice care and because hospitals are performing more expensive procedures on the elderly, said Health and Human Services Secretary Donna E. Shalala.
She also said less money than expected came into the fund through payroll taxes.
Although Republican and Democrats argue over just how much Medicare spending should be reduced, they agree that encouraging a higher percentage of seniors to choose managed care would save money.
In a move that could prompt millions of older Americans to join managed care plans, the American Association of Retired Persons will soon begin licensing its name to health maintenance organizations. And the Health Care Financing Administration, the agency that runs Medicare, has just announced a three-year experiment in which managed care plans in the Baltimore area will no longer be paid pre-set yearly fees. Instead, the plans will bid against each other for Medicare business, letting a competitive market set the price the government will pay for health care for the elderly.
