The recent development of managed care and consumer driven health care in the United States has important implications. Rightly or wrongly, the American health care system has historically been a source of approaches for implementation in Europe and elsewhere. The amount of change and innovation that has marked this system in recent years has generated more than enough material for consideration by the international community.
One of the most significant developments in the United States health care system in the past several years has been the decline of managed care. This development probably came as a surprise to health care policy makers elsewhere in the world. In its early days, managed care had great promise for addressing the two most important objectives of health care planning, improving patient outcomes while containing costs. During the 1980s, this approach seemed to be on its way toward meeting this objective in the American health care system. Managed care penetration of the private insurance, Medicare, and Medicaid markets were increasing substantially and previous annual increases in per capita health care expenditures were declining.
The reasons for the decline of managed care probably emanate from conflicting forces within the American health care system and the environment surrounding it. These include the desire to support buyer preferences and the need to restrain increases in health care expenditures at the same time. In the American system during the late 1990s, cost containment lost out. The lesson that may emerge from this is one of realism. You cannot have your cake and eat it too.
At the same time, this story is more complicated than a struggle between choice and cost containment. It is part of a rising interest in consumer choice within the wider health care environment and the economy of the United States. Pharmaceutical companies and other providers of health services have recognized this and begun direct marketing to consumers through the media. This development has involved bypassing physicians and going directly to users of care, just as consumer driven care involves bypassing managed care and its utilization controls. These developments suggest that consumer driven health care in the United States is not an isolated event, but part of a wider trend.
These developments pose a major dilemma for health policy makers. The parameters of this dilemma may differ among nations. It can be suggested that, in the United States, advocates of managed care should not have 'bailed out' so quickly when consumer dissatisfaction began to increase. This assumes that purchasers of care will ultimately side with cost containment.
The preceding information demonstrates that the following chain of events has occurred in the United States. Each of these events was related to wider developments in the American economy.
- Managed care helps reduce health care cost increases
- Increased managed care results generates popular dissatisfaction
- Managed care plans reduce controls and increase prices
- Health care costs increase substantially
- Consumer driven plans provide a mechanism for government and employers to unload health care costs on consumers
This important juncture is where Europe and the rest of the world may have an advantage over the United States. It is clear that Europe has the opportunity to invest in managed care and to use this approach to restrain costs and improve patient outcomes. In so doing, European nations would stay with the first step on the preceding chain of events and avoid the disadvantages of the remaining ones.
But before we elaborate further on possible implications for Europe, we should emphasize that the stage for the health care actors in Europe is quite different from the one in the USA. Health care systems in Europe vary greatly among countries, but in general European health care systems have some characteristics that make them different from the system(s) across the Atlantic. First, Europe has a highly valued tradition of universal health care coverage and governmental administration. Furthermore, Europeans tend to entrust responsibility to the (central) government and not to private agencies. Finally, competition among providers and purchasers is restricted by highly structured conditions by the government.
The above comes down to the point that in health care Europeans have difficulties getting market elements off the ground. They do not seem to trust the invisible hand (of the market). This has probably resulted in a slower rate of system innovation, but fewer policy development and implementation errors, in these countries [33
Germany, Switzerland and The Netherlands are nowadays starting to adopt managed care (tools) with caution, focusing on support for patient outcomes and cost containment. At the same time, Sweden and the United Kingdom, implemented dramatic changes very rapidly. Obviously, Europe also offers the opportunity for a number of different approaches to this issue to develop simultaneously [35
Any evaluation of the potential impact of consumer driven health care in Europe must address specific aspects of this approach. For example, what would be the implications of providing information concerning pharmaceuticals directly to consumers in Europe? It could also be conjectured that Europeans might prove to be more deliberate and conservative consumers of pharmaceuticals than Americans. It could be suggested that Europeans would make more extensive use of information before reacting to the first television commercial and asking their physicians for Viagra or Allegra, or some other drug. At the same time, however, the answers to these questions are not clear. They may vary substantially among European countries [36
A more important question regarding consumer driven health care concerns the implications of exchanging free choice of providers for higher cost sharing by consumers. In societies with established medical networks which have become acclimated to managed care, the free choice option might have little impact. At the same time, the recent strength of the European economies and the euro might reduce the impact of higher cost sharing and make free choice of providers more affordable [38
Another area of consumer driven health care that deserves evaluation is the potential impact of providing health information directly to consumers on the use of services and costs. In the United States, the effectiveness of this approach depends greatly on the extent to which consumers read, evaluate, and act on health information provided through websites and other electronic media. It is clear that Europeans probably make as much use of the internet as Americans, however, it remains to be seen what the impact of electronic medical information will be on consumer behaviors in these countries [40
The answers to these specific questions could vary substantially across the European continent. The degree to which managed care is retained could be related to the commitment of individual governments, the influence of medical establishments, and the availability of disposable income. From a policy making standpoint, this issue probably requires evaluation on a nation by nation basis.
From an international standpoint, the potential impact of the decline of managed care and the rise of consumer driven health care in the United States is a fascinating issue. It is still too early to determine what the impact of these developments will be on the rest of the world. One answer to this question is probably that changes in health care policy require adequate information on the effectiveness of the alternative being considered, as well as the status quo. It appears that the difficulties with managed care experienced by the United States during the 1990s have prompted a rapid movement away from this form, without a clear idea of the effectiveness of consumer driven care, or other alternatives. Health care has too much of an impact on large populations and on national spending to approach it by 'looking before leaping'.
All of this suggests that Europe and the rest of the international community are in an excellent position to profit from the American experience without much risk. They can view what is going on with critical eyes and reach their own conclusions about whether the transition from managed to consumer driven care supports patient outcomes or not. They can monitor the data and determine which of these forms has greater potential for cost containment. The opportunities for learning may increase as financial pressures place greater pressures on the American system for cost containment.