The Managed Healthcare Industry -- A Market Failure

Now that the Affordable Care Act has planted itself firmly among those needing healthcare coverage, why are the cost of healthcare in the United States and our infant mortality rate still higher than 33 advanced nations? The book's second edition offers a comprehensive overview of healthcare history, the factors, fictions, laws, and policies leading up to the Affordable Care Act--the path to avoiding the managed healthcare insurance predicament. This indispensable resource by Professor Jack C. Schoenholtz offers readers page after eye-opening page information that explains the often overwhelming, ever-important issue of the costly managed healthcare industry. In this second, expanded edition, The Managed Healthcare Insurance Industry--A Market Failure intensifies its investigation of America’s healthcare. The book is written for concerned adults, college-age youth, educators, and healthcare professionals--both providers and executives--and for legislators, regulators and the public who wish to understand the health of the US healthcare system. It exposes the reasons for the high cost of healthcare, the byzantine way commercial outsiders manage it and created a market failure--costing society and patients in need more than it benefits them--and how the federal Medicare and state-run Medicaid programs began to funnel their money directly to the for-profit healthcare insurance industry before Obamacare starting "bending the curve." By an analysis of historical and contemporary data, this revelatory and rigorously researched work explores American healthcare from multiple points of view and brings together facts from media reports, state and federal governments’ historical approaches to the public’s healthcare, the evolution of relevant statutes, regulations, and the political economics and day-to-day medical and social issues surrounding the doctor-patient relationship. In clear, unflinching language, The Managed Healthcare Insurance Industry examines the legislative and economic changes of the past forty years that have resulted in today’s number of uninsured Americans. In Part I, the book highlights the onset of the healthcare “cost-containment” era, by way of the insurance-company friendly HMO Act, which led to the birth of managed-care insurance. Parts II and III tackle the implications of federal antitrust law, particularly in terms of the power of federal “preemption,” and the 1974 enactment of ERISA, the “Employee Retirement Income Security Act.” Part IV illuminates the contributing factors that lead to private companies created to “manage” the delivery of healthcare by doctors and hospitals and how most failed to survive or swallowed their rivals, leaving only a few giant insurance companies now controlling entire states’ healthcare systems. This section also addresses whether insurers were legitimately cutting costs or coercively manipulating prices in a predatory manner, whereby patients became reluctant participants in economically compromised care, and why this became a paradigm of market failure—a deadweight loss for society. Parts V and VI demystify the business of insurance companies, and how formerly “risk insurance” policies became “noninsurance,” which exploits employers and their employees’ benefit plans alike by keeping their administrative costs artificially high. Parts VII, VIII, and IX explore managed healthcare as an economic market failure that results in a waste of resources. Parts X and XI discuss the legal attempts by the commercial insurance industry to dislodge congressional will in enacting Obamacare, bringing up-to-date the attempts by the industry to control the new Exchanges and Accountable Care Organizations.