Managed Health Care:

Effect on Employers' Costs Difficult to Measure

HRD-94-3: Published: Oct 19, 1993. Publicly Released: Oct 19, 1993.

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Pursuant to a congressional request, GAO reviewed employers' recent experiences with managed health care, focusing on cost control and enrollee perspectives.

GAO found that: (1) the proportion of private-sector employees enrolled in managed care plans increased from 5 percent in 1980 to 55 percent in 1992; (2) managed care cost control efforts involve alternative financing methods and limitations on the use of expensive medical services; (3) employees are concerned about restrictions on the choice of health care providers; (4) enrollment trends show that many employees prefer more flexibility than is afforded by traditional health maintenance organizations (HMO) and are willing to pay additional out-of-pocket costs to receive care from the provider of their choice; (5) some evidence suggests that patients rate managed care health services lower than fee-for-service physician services; (6) employers' experiences with managed care costs vary; and (7) performance measures need to be developed that will allow employers to make informed decisions about health care plans and providers.

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