PERSPECTIVE ON HEALTH-CARE REFORM : Madison Ave. Meets Marcus Welby : The trend toward managed care means marketed care, leaving the consumer to test for quality.

Theodore R. Marmor is a professor of public policy and Jerry L. Mashaw a professor of law at Yale University

The Clinton Administration's version of health-care reform is dead, but change in American medicine is very much alive. The spread of managed care--the new world of medical networks, competing plans and complex choices--is shaking up our medical lives in ways that, according to promoters, promise major benefits. Yet these market-driven reforms may prove as empty or as fearsome as the reforms Congress so recently rejected.

Dramatic changes are signaled even by the language in which American medical care is now discussed. Increasingly, that language is a form of managerial corporate-speak--some combination of Madison Avenue hucksterism and the standard chamber of commerce rhetoric of free markets and beneficent competition.

CIGNA chief executive Larry English nicely illustrated this form of elocution at a recent Los Angeles conference on health-care reform. Reform at the national level failed, English said, but there was an extraordinary "revolution" under way in American medicine nevertheless. Market-based change would transform the medical cottage industry of the past into a competitive, cost-effective marvel of the future. Indeed, the free market would be the toughest regulator and would produce better care and lower costs, English concluded, if only allowed to do so with minimal government interference.

The problem with this argument is that it is mostly hyperbole. Managed care, like any other form of organized medical-care markets, has the vices of its virtues. To the extent that managed care restricts services and choices, it raises profits by reducing quality, not improving it. (Fee-for-service medicine has the opposite danger: too much care at too great a cost.) Marketing firms generate cute and potentially misleading labels for health firms to catch the eye of potential enrollees. So, for example, we find a health-maintenance organization called Maxicare, when the obvious incentives of such organizations are to restrain rather than "maximize" the use of medical services.

Not that medical-care quality has been forgotten completely. CEOs of insurance firms advertise the wonders of "medical report cards" that sort out the good from the bad among hospitals and doctors. But keep in mind that insurance firms are most experienced in excluding high-risk applicants from coverage, not evaluating hospitals and doctors.

Orwellian doublespeak is hardly new in American medicine. Whether private or public, health-management theorists have continually developed, marketed, applied and then abandoned numerous approaches to familiar problems in the organization of health-care provision. Two decades ago, the panacea in medical management was health-maintenance organizations, the combination of insurance with staff medical providers working within a limited budget. Decentralization was in vogue for a time, as were health-planning agencies to decide what was needed medically in local areas. Management-speak has shifted in recent years to labels like "total quality management" and, especially for promoters of new health plans, "integrated systems." These slogans are less for the broad public than for other managers, the ones who decide which health plans their employees can join. So what we have is the language of Madison Avenue linked to the jargon of American business schools: hype and hyperbole in two different voices. And just as the rhetoric of fee-for-service medicine obscured the dangers of overproviding and overcharging for medical care, so does managerial medicine mask the dangers of its key features: bureaucratic and budgetary constraints on patient choice and physician judgment.

The difficulties with this brave new world lie not only in particular policy and program disappointments--like Medicaid and managed-care programs that fail to protect clients and health maintenance organizations that substitute advertised competence for actual medical excellence. It lies also in the confusion that the language of marketing can sow if not seen for what it is. In 1995, the danger will come not from the AMA, stuffing American minds with fears of socialized medicine as they did in the three decades after World War II. Instead, it will come from corporate America, especially from insurance companies that are trying to jettison traditional health insurance as fast as they can and get into the profitable world of managed care.

In that process, Americans will be asked to adapt to two new realities. The first is having medical care marketed to them like cereal. As is customary in such activity, the virtues of particular medical-care systems will be oversold, their vices quietly ignored. The second is the necessity of choosing a system rather than a doctor amid the cacophony of competing claims. In some ways, this could turn out well; in others, calamitously.

The uncertainty that will attend these choices may escalate families' health-care anxieties rather than reduce them. Indeed, fears generated by market reform of American medicine may well be the engine that drives health care back toward the national political agenda.

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