Managed Care for the Elderly: A Threat or a Promise?

Older people stand to gain-and lose-the most from care. In the 1990s, the nation's medical care system has undergone a dramatic transformation. Most Americans under age 65 now get their healthcare through some form of managed carethat is, through a health plan that, in a variety of ways, influences or guides their care and treatment choices. Although far fewer older than younger Americans participate in care, even here the numbers have grown dramatically. Today, more than 6 million elderly people participate in care through the Medicare program, more than double the number only five years ago. Medicare, the federal program through which virtually all elderly Americans receive their health insurance, is actively engaged in making care more available to its beneficiary population. This issue of Generations takes a look at the implications of care and Medicare's involvement with it for the nation's elderly population. Our premise is that care has considerable potential either to enhance or to diminish access to quality care. In a nutshell, the financial and management techniques that can promote desirable coordination of care also can promote undesirable restrictions on care. Whether care is, in practice, a promise to improve our healthcare system or a threat to its achievements will depend on how it actually operates and how, in the Medicare context, it is held accountable. In this introduction, we review both the promise and the practice of care-for the general population and, more narrowly, for people age 65 and over. Because care has become a key component of the Medicare program, we then outline a set of policy issues care raises today and, perhaps even more important, as part of a strategy for addressing Medicare's future. Our authors address all these issues in far greater detail. We close with a guide to the articles that follow. THE PROMISE OF MANAGED CARE Coping with the medical system has never been easy for people when they get sick. Finding appropriate professionals, reconciling their sometimes conflicting advice, repeating timeconsuming or even invasive tests-all pose substantial (to put it mildly), particularly for people with chronic or multiple healthcare problems. These challenges are exacerbated by the way we have historically paid for medical care, that is, on a fee-for-service basis. Rewarding doctors and other practitioners more, the more services they provide, creates an incentive for the redundancy and ping-ponging that so frustrates patients. In theory, care has the potential to change all that. Managed care, broadly defined, makes an organization, or health plan, responsible for arranging and paying for care for its enrollees. Although care can take a variety of forms, its most powerful effects come from rewarding doctors and other practitioners for providing care efficiently-that is, managing rather than promoting use of services. These incentives theoretically make the practitioners allies in what may be described as patients' interest in using care efficiently-receiving appropriate but not unnecessary, excessive, or duplicate services. Although these arrangements can benefit any patient, their greatest potential benefit is probably for patients, like the elderly, who are particularly vulnerable to chronic conditions or multiple health problems. These are the patients who rely on more than one practitioner, who can benefit from preventive services, whose conditions need careful monitoring, and whose health status and quality of life are profoundly affected by the management-or lack of management-of their treatment and care. For the elderly, then, care offers, in theory, a substantial promise for better healthcare. THE PRACTICE OF MANAGED CARE In practice, care may not live up to its promise for coordination and efficiency. …