Managed Care Is a Model That’s Had Its Day: An Opinion

By Ed Weisbart MD, CPE, FAAFP
July 25, 2019

In the nearly ten years since I retired as chief medical officer for a large pharmacy benefit manager, it seems my perspective has shifted.

Before I left, I remember a discussion bemoaning the public’s increasingly critical view of managed care. We valiantly searched for a narrative to bolster our industry’s image.

WeisbartThe best example we found was about an insurer that helped a patient switch from the non-formulary drug her physician prescribed over to that insurer’s preference. We were all proud that the insurer had done extensive patient outreach and care coordination rather than just deny the pharmacy claim. While patting ourselves on our backs, we failed to recognize that the very existence of our fragmented insurance industry was the reason the patient needed to take something other than her physician’s first choice.

I was reminded of all of this when I read Erik Sherman’s “Sudden Medical Bills Surprising, But No Fun” in the May/June 2019 Physician Leadership Journal[i]. Sherman has documented many of the symptoms of our fragmented system, and then recommended multiple solutions whose “effort, costs, and time commitment would be significant.” The entire strategy is based on making it easier for patients to understand their out-of-pocket costs, so that it would be “easier to collect,” in the words of financial advisor quoted in the article. This advice flies in the face of the fact that millions of Americans already declare bankruptcy from overwhelming medical bills despite having insurance when they get sick[ii].

There’s nothing in Sherman’s article addressing our nation’s unsustainable cost trends, the fact that financial barriers keep so many Americans from healthcare, or the professional burnout created by needless administrative complexities. Instead, his proposal would add even more administrative complexity and waste. As any student of Deming and Juran can tell you, complexity is the enemy of quality.

Enough, I say, and most Americans agree.[iii]

Managed care is a model that’s had its day, if there ever really was one.

“Surprise medical bills” and “balance billing” are consequences of this fragmentation. They point to the need for us to build a single national health program, insuring every American with comprehensive first-dollar coverage. With this being the insurer for every American, virtually every physician and hospital would be “in network” and the surprises and unaddressed balances would fade into the dust heap of history.

The simplicity and success of this approach has been demonstrated around the world and resonates with patients and physicians alike. Indeed, ever since 2001 there has been a net migration of American physicians into Canada.[iv] Every year since 2004 there has been a net repatriation of expat Canadian physicians[v]. Dr. Trina Larsen Soles, president of Doctors of British Columbia, describes practice in Canada as “It’s not a big hassle. I can focus on patient issues, not administrative issues.” Compare that to Dr. John Cullen, at the time president-elect of the American Academy of Family Physicians, who described American medical practice as “An incredible bureaucratic mess to get anything done for patients.”[vi]

It is time to move away from the convolutions and contortions that define this uniquely American industry, get rid of these intermediaries, and switch to the American system with the lowest overhead, consistently high levels of popularity[vii], and extends our life expectancy[viii].

Let us build our solution upon traditional Medicare (Parts A and B): eliminate the copays and deductibles; add in coverage for pharmacy, optometry, dentistry, and a few other critical elements; and fully fund our national health insurance through an equitable public funding mechanism rather compound overwhelming illnesses with overwhelming financial burdens.

With these improvements, there would be no market for supplements or Advantage plans. According to dozens of economic analyses, the savings from reduced administrative overhead and more consistent pricing would mean that the vast majority of Americans would spend less on healthcare. And be put back in control of their own healthcare decisions.



[ii] Himmelstein et al. Am J Med: August, 2009

[iii] Reuters/Ipsos 8/23/2018 and 10/22/2018


[v] Canadian Institute for Health Information

[vi] Modern Healthcare. April 9 2018.


[viii] Institute of Medicine. Shorter Lives, Poorer Health. 2013. Figure 1-9.

Topics: Management

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