Markets at Risk— Current and Future Challenges in a Managed Care Marketplace. A. Looser products and models to continue.


Purchasers, providers, and consumers all appear to be strongly in favor of less, rather than more, restrictive products. They are doing so despite the fact that these products are trading off accountability for acceptability, and typically contain weaker incentives for provider integration and behavior change. Plans have acceded to these demands, despite the loss of cost controlling properties, because of the need to respond to customer demands (and all three parties are customers), and because purchasers and/or consumers have been willing to accept higher costs. It also appears, based on contemporary trends, that the spread in premium and premium increases across these various products is not so great as it once was. Therefore, it is difficult to justify a more restrictive product when its cost to members is not enough to make them comfortable with accepting these restrictions. Plans counter that this has been brought on large by benefit mandates and other regulations loaded on traditional HMO products that have destroyed their historical price advantage.