The meltdown of the Clinton health reform plan suggests a return to competition-that managed care, capitated payment, and regional alliances will assume leading roles in the delivery of health service. But that conclusion may prove premature. Missing from the debate is a discussion of the true costs and implications of these emerging health alliances and health management organizations (HMOs).
Managed care may not offer the expected panacea for containing health costs. The nation's health alliances are already segmenting the marketplace. Hospitals and physicians are forming powerful oligopolies in almost every metropolitan area. Huge managed care plans create monopolies that force out weaker firms and stifle competition. Most of the remaining competitors must be satisfied as small niche players. These factors point eventually to a more regulated environment-obviously inconsistent with the political shift to the right. The surprise is that these forces may persist despite the Republican takeover.
Will the health field fall prey to tightening governmental controls, even as long-regulated industries like electric and gas distribution move away from traditional, cost-plus, franchise-based regulation?Managed Care: No Panacea