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Drive for managed health care has lost the war; proponents in full-scale retreat, says UC Berkeley authority
22 May 2001

By Patricia McBroom

Berkeley - Proponents of managed health care are in full-scale retreat from the effort to control medical costs, while financial responsibility and treatment choices are shifting from employers and governmental programs to individual consumers, according to health economist James C. Robinson at the University of California, Berkeley.

These developments are likely to result in rising health care costs, along with greater consumer control of medical treatments, says Robinson, an authority on managed care systems in the nation and a UC Berkeley professor of public health.

"Managed care proponents have clearly lost the war," Robinson writes in an article published in this week's Journal of the American Medical Association (JAMA).

He added that, in a two-year study of relationships between physician groups and Aetna U.S. Healthcare, the nation's largest health insurer, he has found a "step by step lightening up in the tools used by Aetna to control health care costs."

He said in California and New York, there were fewer medical services covered by capitation prepayments than there used to be, in response to a consumer and physician backlash against managed care.

Robinson and co-author Lawrence Casalino of the University of Chicago published results from their 1998-2000 study last week in an on-line version of the journal, Health Affairs.

In his JAMA essay, Robinson describes a retreat from managed care on the part of insurers, employers, physician groups and politicians, none of whom wants to deal with anger and litigation on the part of consumers.

He also predicted that consumer control, which is rising, puts more medical choices in the hands of consumers who may or may not know what they are choosing. An unfortunate consequence will likely be increased inequality for the poor in getting health coverage, he said.