PAUL ELLWOOD, M.D., is known as the father of managed care.
In the early 1970s, the now-renowned industry "thought leader" founded the Jackson Hole Group, a loosely organized healthcare think tank made up of academics, executives, policymakers, politicians and providers. The group, which meets in the resort town of Jackson Hole, Wyo., came up with the concept of "managed competition," ultimately revolutionizing the national healthcare system and spurring managed-care growth.
Ellwood, now 74, began practicing medicine in 1952 after completing medical school at Stanford University in California, where he specialized in pediatrics, neurology and physical rehabilitation. He later became chief of inpatient services at the Sister Kenny Institute, a Minneapolis-based medical center owned by the American Rehabilitation Foundation.
It was during this time that Ellwood described to officials at the national Department of Health, Education and Welfare-the precursor to HHS-how market principles could be used to overhaul the healthcare system by boosting quality and efficiency. His subsequent work with the department led to the HMO Act of 1973, crafted by Ellwood and his colleagues at American Rehabilitation's policy research division.
In the early 1990s, Ellwood and the Jackson Hole Group were recruited to help shape the Clinton healthcare reform proposal. But when the plan was unveiled in 1993, its emphasis on government regulation diverged sharply from the group's vision of using free-market forces to drive change. In the end, Ellwood's group opposed the plan.