Does Managed Care Need to Be Replaced?
University of California, Irvine
Graduate School of Management
Health Care Management Distinguished Speaker Program
October 2, 2001
Dr. Paul Ellwood, "The Father of HMOs"
The following comments are not absolutely verbatim quotes, but were reconstructed from notes taken by me during Dr. Ellwood's presentation:
Dr. Ellwood stated that he has written off managed care companies. But he is ready to try refrom again. He believes that reforms will be far more complex, and that the task will be much more difficult.
He has developed a new acronym for his concepts of future reform, although he states that this is a work in progress.
His acronym: HEROIC, as follows:
H: Health system, with an emphasis on the health component rather than on financial incentives. We should consider that the new form be not-for-profit. (He mentioned that he is disgusted when a managed care executive goes to Wall Street and brags about raising premiums and reducing benefits.)
E: Evidence based medicine. Physicians must agree to follow principles of evidence based medicine. Consumers must agree that evidence based care is sufficient. As an example, they should not an MRI when evidence based medicine does not support its use.
R: Responsibility. Patents need to assume more responsibility for their own health and for the costs of health care. He did state that there is danger that the defined contribution will be too low.
O: Outcomes accountability. Outcomes accountability is absolutely necessary to assure high quality.
I: Information technology. Health care is lagging in information technology. Information technology is demanding, complex and costly. It interferes with "clinical productivity" (i.e., income generation). But information technology provides the glue that holds the health care system together.
C: Commitment. We will be able to identify individuals that will acquire specific disorders. A health care relationship will need to be sustained, with a lifetime tracking and alerting system.
He said that we can design a better health care system, but the problem is getting there. We do not want to put cost containment in front of the system that assures health. We must develop an American health system that hails who we are.
Comment: Listening to Dr. Ellwood, he was obviously very disappointed that the managed care revolution did not fulfill his dreams of quality, efficiency and integration, that would improve outcomes through evidence based health care. He is disappointed that his concepts were developed primarily into a business model rather than a health care model. He believes that we can go back and design a model that will incorporate his concepts, although the implementation will be difficult. It is interesting that in informal conversations after his presentation, a few individuals commented that he had implicitly (but not explicitly) endorsed single payer reform.
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