Managed competition is back, but this time it's Republicans who are pushing it.
House GOP leaders are preparing an election-year healthcare bill that could aid the development of "health marts," or joint ventures of employers, providers, insurers and consumers.
Details are sketchy, but a discussion paper from the House Commerce Committee describes health marts as purchasing pools that would make risk-adjusted healthcare coverage plans available to employer members at group rates, administer the health benefits programs of members and provide information to enrollees on the cost and coverage of the plans available to them.
The discussion paper touts health marts as a way to expand choice and coverage while lowering healthcare costs. Health marts are being touted not only for employers, especially small businesses, but also for self-employed people, who have difficulty obtaining affordable insurance coverage.
Enrollees could choose from a greater array of health plans, while employers purchasing coverage could take advantage of the lower premiums and reduced administrative costs of the large-group marketplace, the paper said.
The health mart proposal may be part of a patient-protection bill emerging from the House Republican leadership's healthcare task force, although some members are said to be raising many questions about the proposal.
Members of that task force had been set to release their document at the end of last month. But House Speaker Newt Gingrich (R-Ga.) told them to come up with a "bolder" proposal (May 25, p. 8).
Although health mart advocates bristle at the comparison, observers are noting the similarities between the proposal and the health purchasing alliances included in President Clinton's 1993 healthcare reform proposal.
Under that plan, regional alliances would have negotiated with health plans to cover enrollees. Alliances would have covered all employees of firms with fewer than 5,000 employees. Companies with more employees could have formed their own alliances.
That proposal paralleled the "managed competition" model that was promoted by healthcare economist Alain Enthoven and the Jackson Hole Group.
Although they are making some positive noises about health marts, Democrats also are relishing the irony of the proposal.
"As a means of creating an opportunity for individual choice-which was exactly the goal of the Clinton health plan-they are exactly the same" as Clinton's regional alliances, said Judy Feder, who was the lead HHS official on healthcare reform and now is a professor of public policy at Georgetown University.
Feder said opponents of the Clinton plan argued that it would have reduced individuals' choice of providers and health plans. But since its defeat, employers have enrolled their employees in managed-care plans in ever-increasing numbers, narrowing the employees' choice of providers regardless of what the government did, Feder said.
"In response to that narrowing, you're seeing an interest in increasing choice," she said.
"The fundamental objectives of health marts are so congruent (with Clinton's health alliances) as to be virtually the same," agreed Bruce Fried, who was part of Clinton's health policy group during the 1992 presidential campaign and later became a top lieutenant at HCFA.
Health mart advocates acknowledge the similarities but with an anti-regulatory twist.
"If you set aside the fact that they're private, voluntary and competitive, (health marts) are just like (Clinton's healthcare cooperatives)," said a House GOP aide who asked not to be identified.
Robert Moffit, deputy director of domestic policy studies with the conservative Heritage Foundation, described health marts as potentially a "net deregulatory" proposal. They could shield small employers from state health benefits mandates, as the House discussion paper calls for.
"You're not talking about a regulatory regime" as comprehensive as the Clinton reform plan, Moffit said.
Republicans also stressed that one of the aims of health marts is to create partnerships among employers, insurers and providers to better coordinate preventive care, disease management and acute-care services, something now lacking in the healthcare market.
"It's either employers and providers working together and locking insurers out, or you have employers and insurers working together and providers playing subordinate roles," the House GOP aide said. "You never have insurers and providers working together."
Feder, however, also warns that although health marts could make health coverage more affordable for small and medium-sized businesses, they also could contribute to increased costs for people who continue to purchase insurance on their own.
If health marts contribute to further fragmentation of the insurance market, risks will be spread among fewer enrollees in the individual market, driving up costs for those who stay in.