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July 10, 2001 
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Managed Care Debate

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Managed Care – Myth and Reality

Issue: Managed care reform has been the leading health care issue since the defeat of the Clinton health care bill in 1994. The medical community, proponents of managed care reform in Congress and the popular media have sought to "demonize" managed care as cost- instead of consumer-conscious.

NAM Position: The National Association of Manufacturers supports the many different varieties of "managed care" as important options for the health coverage purchaser – whether business or individual – to select from. The NAM strongly opposes efforts to expand federal regulation of the health care marketplace – particularly efforts to expand health care liability to employers and health plans, and proposals to sacrifice workers’ coverage for provider protections.

 MYTH: Physicians are routinely second-guessed and overruled by health plan bureaucrats.

REALITY: Physicians report that health plans approve coverage for virtually all (97% or more) of the care they recommend (U.S. Department of Labor, 1998).

MYTH: Clerks and accountants deny care.

REALITY: Nurses and other non-physician health professionals most often approve care. Health plans almost universally use physicians to review potential denials of coverage.

MYTH: The growth of managed care has restricted patient choice.

REALITY: The growth of managed care has expanded the options available to consumers. Nearly all (92%) employees are given a choice of joining a plan that covers out-of-network physicians and hospitals.

MYTH: Health insurance plans are largely unregulated. ERISA preempts most state regulation of employer-sponsored insurance.

REALITY: Health plans are regulated at both the federal and state level. This regulatory framework is supplemented by private accreditation standards as well as private purchaser requirements. Additionally, state laws regulating utilization review are not preempted by ERISA.

MYTH: People are unhappy with managed care.

REALITY: Surveys consistently show 90 percent approval for their health plans. In fact, satisfaction with HMOs is equal to or higher than that of fee-for-service plans. Health plan members in poor-to-fair health report satisfaction ratings for HMOs and PPOs that are comparable to satisfaction for their counterparts enrolled in fee-for-service plans, and several studies show higher satisfaction rates for health plan members.

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