Keywords

capitation, cost control, fee for service, managed care, personal empowerment, self-care

 

Authors

  1. Neuhauser, Duncan

Abstract

The financing and organization of health care in the United States has been rapidly evolving in the last 30 years. Managed care and capitation have largely replaced fee-for-service as a way to pay providers. Cost-control initiatives were developed by payers. These crude cost-control methods proved insufficient and new approaches were developed. These might be referred to as disease management that includes evidence-based medicine and outcomes measurement. It is proposed that a third revolution, patient empowerment, is just starting. The potential far-reaching consequences are described, discussed, and analyzed here, including their cost consequences.

 

It is proposed here that the delivery of medical and health care in the United States has been and is going through four stages over the last 30 years, starting with fee-for-service payment to physicians and hospitals through third-party insurers, such as Blue Cross, private insurance companies, and government programs such as Medicare for the elderly and Medicaid for the poor. The rising costs of this approach led to the growth of large competing delivery systems (managed care organizations) serving defined populations under capitation payment. This competition forced changes in delivery that are transforming the focus of managed care from (1) cost control to (2) disease management to (3) personal empowerment. This process is described here, concluding with a cost analysis of these three stages and an analysis of how personal improvement could be a disruptive innovation as described by Christensen and colleagues.1