Markets at Risk— Current and Future Challenges in a Managed Care Marketplace. Contemporary environmental pressures

12/01/2000

Several pressures for managed care organizations are detailed as emanating from purchasers, consumers, providers, and public and private regulating authorities. Shifting purchaser preferences in terms of both financing and delivery arrangements are forcing plans to alter their products, strategies, and structures. Generalized consumer disenchantment with HMOs has proven nearly impossible to overcome, despite substantial investment in mechanisms to enhance the legitimacy of the industry, including accreditation, compliance with regulatory impositions, and consumer reporting and education campaigns.

Providers, feeling financial pressures from managed care contracts, rising input costs, and reduced Medicare payments, are negotiating much more aggressively with plans over rates and other terms. Regulatory and accreditation compliance is adding cost and complexity to plans, and having disproportionate impacts on traditional or pure HMO products to the point where they may no long be a viable option. Plans are finding lack of purchaser interest in performance data disappointing and disconcerting in light of the investments they have made in these areas.