Managed Care

Abstract

The decade of the 1990s is one of restructuring in American medicine. Prior to this time the dominant form of medical practice in the United States was independent private practice. Not only physician offices but also hospitals, laboratories, pharmacies, and radiology and physical therapy clinics, among others, were owned and operated as independent business entities. A serious medical event, such as a broken hip or pneumonia might result in separate charges from as many as 30 companies. The dominant form of payment was fee-for-service. By the 1990s the payers of health care, primarily employers and the government, became intolerant of a lack of control over health care costs and began to demand more organized delivery systems and predictable health care expenditures. Managed care, which has existed in the United States since the 1930s, all of a sudden became the answer to organizing the health care system.