Managed Care: An Industry Snapshot

Abstract

Together with the American Association of Health Plans (AAHP), we surveyed health maintenance organizations (HMOs) in 1998 to characterize their basic structure and management strategies. The findings show that more than half of HMO enrollees belong to plans that contract with primary care physician (PCP) groups on a predominantly capitated basis. Such plans tend to be larger and to contract with large physician groups. Thirty percent to 40% of enrollees are in plans that delegate utilization and network management to physician groups paid by capitation, but plans almost never delegate these functions to groups paid by fee-for-service. Plans tend to retain quality assurance functions irrespective of whether they use fee-for-service or capitation as a basis for physician payment. The autonomy of PCPs to order tests and procedures varies with the test and procedure.