Two sides of managed care debated at Atlanta conference

By Henry Saeman, Editor
May 1, 2001 - Last updated: May 31, 2011

Atlanta–It’s surprising and refreshing that a managed care organization such as the National Mental Health Care Congress (NMHCC) would invite a keynote speaker to its annual convention, whose biases run afoul of the hand that feeds the honoraria.

Take David Himmelstein, M.D., chief of the Division of Social and Community Medicine at Cambridge (Mass.) Health Alliance, and also an associate professor of medicine at Harvard University. “Is Managed Care Healthy” was the topic. Himmelstein has preached for years the “unhealthy” side of managed care.

Clad in pink shirt in contrast to the spiffily-dressed business-types who march to a different dress code, his hair parted and trailing a neatly tucked eight-inch ponytail, Himmelstein was here for an 8 a.m. debate with a conventional, comely fellow physician, David B. Nash, M.D., MBA, associate dean of the nation’s largest private medical school, Jefferson Medical College at Philadelphia’s Thomas Jefferson University Hospital. Five hundred healthcare administrators, physicians, payers and hospital personnel were assembled in an auditorium at Georgia’s massive World Congress Center in Atlanta.


The moderator sought to turn the debate to such questions as “does managed care create health” and “has it contributed to health status of Americans”? and “is it healthy for stakeholders–doctors, consumers, hospitals and the like”?

Himmelstein cleverly turned the questions to “Is managed care healthy for the American people”; “are there better alternatives”; and “what is the record of managed care during the last 20 years?”

Outspoken as he has been during his years on the healthcare speaking circuit, Himmelstein noted that there are today more uninsured people in the U.S. than decades ago when Medicare and Medicaid laws were passed. Ten million more have joined the ranks of uninsured during the past 10 years, despite a prosperous economy, the number of uninsured has dropped only modestly. Let the economy cool, and there will likely be a rapid rise in the number of uninsured, he said.

Although managed care and its allies were “crowing” about the reduction in health costs during the 1990s, these costs were growing faster than the healthcare tab anywhere in the developing world, he continued.

“Our health policy still concentrates on rationing a surplus of medical resources,” Himmelstein said. “We have a growing surplus of medical personnel and we are told that we face a surplus of 40,000 unemployed physicians in the next 10 to 15 years.” Making matters worse, there are 200,000 empty hospital beds in the U.S. every day. “We are doing a poor job of matching resources to needs,” he said.

Himmelstein also poked at the rapid growth of administrative personnel, asserted the number of administrators is growing six times as rapidly as physicians. He invoked Canada’s socialized medical system, asserting a better cost-benefit ratio.

“We have known for 20 years that managed care provides high quality care for healthy patients, for the sickest and poorest,” he declared.

The disturbing trend is the disproportionate growth of for profit managed care, according to Himmelstein. “In 1985, only one-fourth or managed care plans were for profit; in 1999, two-thirds were for profit with clear data that for profit plans provide lower quality care than not-for-profit plans.

Finally, he summarized “we are headed toward health reform driven by a system which is dysfunctional at this point; and he followed with the punch line:

“Winston Churchill said one can always rely on Americans to do the right thing after they have exhausted all other possibilities.”


“I am not here as a managed care apologist or spokesperson for the industry,” Nash began. The challenge, he went on, is not managed care but “cost-effective care.” Referring to the new administration in the White House, Nash noted that the current capitalist market-driven health care is assuredly the country’s course for the next four years.

Nash said that managed care has done more to promote accountability for quality than any other system the United States has ever had. “We have seen growth and expansion of a system to promote accountability and measurement in the history of American medicine.”

He said that managed care has put on the national agenda “the difficult fact the we cannot do everything for everyone all the time. We simply can’t afford to do it.”

Nash declared that managed care scores higher on all measures of prevention, claiming that enrollees “get more preventive care than anyone else” and “prevention is the way of the future. It delivers a greater return on investment than tertiary care could.”

He did not rule out the possibility that managed care “may not be around” in the next few years if providers “can assume the risk for what they do, they will eclipse the role of the traditional managed care organizations, and providers will work among themselves” in making key decisions.

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