To be or not to be in managed care. That, with apologies to Shakespeare, is increasingly the question. And while the answer is more and more likely to be yes, executives embarking on this path require nerves of steel as well as a clear understanding of the effort being undertaken.
The decision, not surprisingly, is setting off a scramble among many healthcare networks. For example, Dartmouth-Hitchcock Medical Center in New Hampshire is selling its Matthew Thornton Health Plan to Harvard Pilgrim Health Care, a New England managed-care giant. Last year, Advocate Health Care of Oak Brook, Ill., and St. Francis Health System of Pittsburgh agreed to sell their HMOs to large multistate companies.
Meanwhile, a growing group of integrated healthcare systems is getting into the managed-care business as owners in order to exert more influence over the flow of patient-care spending. Recent converts include Maine Medical Center in Portland, Johnson City (Tenn.) Medical Center and San Diego-based Scripps HealthCare.
But healthcare systems that plunge into managed care often don't recognize the conflicting pressures on provider networks-which have one arm outstretched to attract patients to fill hospitals-and health plans that hope to block as many enrollees as possible from hospital stays.
One answer is renting, not owning, the pieces of the network-even the HMO. As Medicare, the major hospital payer, moves increasingly into managed care, the key will be to shape a network that serves the community in a cost-effective, high-quality way, has the clout to expand into new geographic areas and is nimble enough to respond to a rapidly changing environment.