Managed Care: Made in America. - Review - book reviews

Administrative Science Quarterly,  Dec, 1999  by Renee A. Stiles

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Managed Care: Made in America.

Arnold Birenbaum. Westport, CT: Praeger, 1997. 193 pp. $39.95.

In Managed Care, Birenbaum chronicles the transformation of traditional, indemnity-style health insurance plans and the retrospective, cost-based reimbursement system of which they were a part into the prospectively oriented, fixed-payment managed care programs that dominate today's healthcare marketplace. He frames the analysis as a study of social change; this approach offers great promise, as the emergence of managed care has been accompanied by myriad and dramatic effects at individual, organizational, and societal levels.

To his credit, Birenbaum's description of managed care's impact on the way Americans think about their health, their healthcare system, and the interrelationships between the two is illuminating for readers unfamiliar with the intricacies of healthcare reimbursement. The plain-language treatment of complex material makes the issues accessible to the lay audience; this is the book's major contribution. Experts who are well-versed in the scholarly and empirical literature on the subject may take exception to global statements, such as "no evidence exists that managed care reduces hospitalization, the number of physician visits per beneficiary, or the use of preventive services" (p. 56) or "[in] almost all surveys that compare HMO members with individuals who have old-fashioned health insurance coverage, the HMO members are less satisfied" (p. 104), but novices will acquire a fuller understanding of the debates over healthcare reform, the context from which the issues emanate, and the implications of competing p olicy alternatives.

Its merits notwithstanding, a shortcoming of the text is the absence of linkages between theories of social change and sentinel events in the health insurance industry. This is unfortunate but understandable, as any number of theoretical approaches might be employed with equal success; choosing among them is largely a matter of the researcher's area of interest. For those interested in the organization of work, for example, managed care's gradual encroachment on physician discretion via practice guidelines, restricted formularies, productivity quotas, etc., raises unsettling questions about the status of medicine as an autonomous profession and the practice of medicine itself. Alternatively, institutional theorists may assess how hostility toward early forms of managed care because of its socialistic overtones gave way to today's seemingly wholesale adoption of the practices by a diverse set of stakeholders. Macro-level theorists could compare the sociocultural and environmental factors in regions where manag ed care has thrived for half a century to those in areas where managed care has met the greatest resistance to evaluate what effects, if any, such elements exert on the processes and pace of social change. This list is certainly not exhaustive, but it underscores the worthiness of Birenbaum's notion that the managed care revolution is a fertile context for the study of social change.

Birenbaum does not achieve the breadth of scope and depth of synthesis that characterize Starr's (1982) analysis of the medical profession or Stevens' (1989) history of American hospitals, but that was not his purpose. Given the rate of change in the health insurance industry in general and among managed care programs in particular, it may be several years before a work on par with those of Starr and Stevens is even a realistic undertaking. In the interim, Birenbaum's text is a primer for those seeking to understand how managed care programs differ from traditional health insurance plans and why those differences matter.

REFERENCES

Starr, Paul

1982 The Social Transformation of American Medicine. New York: Basic Books.

Stevens, Rosemary

1989 In Sickness and in Wealth: American Hospitals in the Twentieth Century. New York: Basic Books.

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