FOR IMMEDIATE RELEASE
New Study Confirms Efforts to Undermine Managed Care Could
Raise Health Care Costs Nearly $400 Billion
Almost 6 Million People Could Lose Their Health
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
"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.
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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