Managed Health Care: Effect on Employers' Costs Difficult to Measure
(Letter Report, 10/19/93, GAO/HRD-94-3).

Many employers believe that, in principle, managed care plans save
money, but little empirical evidence exists to support this view; most
cost studies do not adequately control for key factors affecting costs,
such as employees' age or health status. Consequently, the cost savings
suggested by many studies may be due to the fact that managed care plans
tend to attract younger and healthier employees rather than to cost
containment.  In addition, plan comparisons often do not account for
differences in benefits provided.  Little research has been done on
employer cost containment among the newer HMOs using doctors in
independent practice associations, preferred provider networks, or the
managed care hybrids.  Some managed care plans have a potential for cost
savings.  Cost containment efforts in managed care largely involve
controls on the use of expensive medical services. Restrictions on
employees' choice of doctors is viewed as the main barrier to employee
acceptance of network-based managed care plans.  To improve their
ability to assess plans, employers are increasingly asking managed care
plans for more information on costs, outcomes, use rates, and enrollee
satisfaction.  Nearly all HMOs' report employer requests for these data,
and local employer coalitions are working to enhance the development of
this information.

--------------------------- Indexing Terms -----------------------------

 REPORTNUM:  HRD-94-3
     TITLE:  Managed Health Care: Effect on Employers' Costs Difficult 
             to Measure
      DATE:  10/19/93
   SUBJECT:  Health care cost control
             Medical services rates
             Cost analysis
             Health maintenance organizations
             Health insurance cost control
             Employee medical benefits
             Health care planning
             Health services administration
             Hospital care services
IDENTIFIER:  Civilian Health and Medical Program of the Uniformed 
             Services
             CHAMPUS
             National Health Care Reform Initiative
             Clinton Health Care Plan
             Health Security Act
             
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