FOR IMMEDIATE RELEASE

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New Study Confirms Efforts to Undermine Managed Care Could Raise Health Care Costs Nearly $400 Billion

Washington, DC, May 18, 2000 — At a time when interest rates are rising and the stock market is dropping, higher health care costs could be the next concern faced by many Americans. Health care costs will increase by $395 billion, or $4,300 per household over four years, and 5.8 million people will lose their health insurance if managed care’s efforts to successfully contain health care costs are eliminated either though pending class-action lawsuits or current legislative initiatives according to a new study released today by the Health Benefits Coalition.

The study also found that private employers would pay $221 billion more in higher premiums and their employees would pay $45 billion more if managed care’s four key cost-control mechanisms were to be eliminated (utilization review, utilization management, provider discounts/capitation, and selective contracting with the most efficient providers).

"For most employers today it is hard enough to provide health coverage to their employees," said Dan Danner, chairman of the Health Benefits Coalition. "This is especially true of small businesses that year after year face double-digit health care cost increases. This study confirms that recent attacks on the managed care industry threaten to increase health care costs even more."

Managed care is widely acknowledged for its success in holding costs down. Moreover, other studies, most notably one conducted by the National Committee for Quality Assurance, show consistent patient satisfaction with the care they receive under managed care.

The study was prepared by Dr. H. E. Frech, professor of economics at the University of California, Santa Barbara, and Dr. James Langenfeld, a director of LECG/Navigant Consulting, Inc.* To receive a copy of the study or schedule an interview with Dr. Langenfeld, please call one of the contacts listed above.

* LECG is a leading economic consulting services firm made up of academics, industry leaders and former high-level government officials specializing in economics, finance and related disciplines.

The Health Benefits Coalition is a broad-based organization representing three million employers providing health care coverage to more than 100 million employees and families. The coalition believes affordable, quality health care is best achieved through broader coverage, choice and competition in the marketplace – not government mandates.