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Health Reform Ideas in the Primeval Soup
Unformatted Document Text:  28 As the immediate political prospects of a universal social insurance approach have declined, a more limited version of it has emerged in the form of expanding existing public programs (Medicaid and SCHIP) to include all or most of the current uninsured. 71 Others have proposed a small expansion of Medicare by allowing those over fifty-five to buy-in to the Medicare program. 72 Either or both of these variations might be perceived by supporters as small next steps toward the ultimate goal of universal social insurance by means-tested expansion of existing public programs. For the last forty years, most reform plans envision either the continuation of Medicaid or a replacement public means-tested program to provide services to the poor, disabled, and many children. Many in the social insurance advocacy coalition have made the expansion of existing public programs a central feature of any reform plan. Use of a public means tested program is a policy idea that has proved attractive throughout the long debate. If this is to continue to be a viable policy idea in the future, the problems of differential benefit and eligibility standards, and provider reimbursement complaints will need to be addressed. Managed Competition Origins Alain Enthoven is the epitome of what Kingdon has called a policy entrepreneur. In the 1970s the former defense department official turned Stanford business professor articulated a new policy idea for addressing the twin problems of cost and access. He attempted to combine universal coverage, market incentives, with government regulation and subsidy to offer an alternative path to reform. The idea of prepaid group practice can be traced at least back to the recommendation of the Committee on the Cost of Medical Care in the late 1920s. 73 In the early 1970s another policy entrepreneur, Paul Ellwood, revived this organizational idea, and offered it as a approach to addressing the cost issues by substituting a prepaid group practice model for the dominant existing independent practitioner model. His formulation stressed the value of keeping the patient well rather than treating disease. Ellwood called his model a Health Maintenance Organization (HMO). At that point there were a handful of examples of HMOs. One of the most successful was Kaiser Permanente in California. Enthoven was familiar with Kaiser and it became the prototype for what he was to call a managed competition system. By the late 1970s Enthoven was spending time in Washington promoting his policy idea to the Carter Administration and conservative 71 Judith Feder, “Covering the Low-Income Uninsured: The Case for Expanding Public Programs, Health Affairs, (November-December, 2001), p. 27-39.; John Holahan, and Shelia Zedlewski, “Expanding Medicaid to Cover Uninsured Americans” Health Affairs, (Spring, 1991), p. 45-61. 72 Dennis Shea, et al, “Betwixt and Between: Targeting Coverage Reforms To Those Approaching Medicare, Health Affairs (January-February, 2001), p.219-30. 73 Fox, op.cit. p. 48-51.

Authors: Brasfield, James.
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28
As the immediate political prospects of a universal social insurance approach have
declined, a more limited version of it has emerged in the form of expanding existing
public programs (Medicaid and SCHIP) to include all or most of the current uninsured.
71
Others have proposed a small expansion of Medicare by allowing those over fifty-five to
buy-in to the Medicare program.
72
Either or both of these variations might be perceived
by supporters as small next steps toward the ultimate goal of universal social insurance
by means-tested expansion of existing public programs.
For the last forty years, most reform plans envision either the continuation of Medicaid or
a replacement public means-tested program to provide services to the poor, disabled, and
many children. Many in the social insurance advocacy coalition have made the
expansion of existing public programs a central feature of any reform plan. Use of a
public means tested program is a policy idea that has proved attractive throughout the
long debate.
If this is to continue to be a viable policy idea in the future, the problems of differential
benefit and eligibility standards, and provider reimbursement complaints will need to be
addressed.
Managed Competition
Origins
Alain Enthoven is the epitome of what Kingdon has called a policy entrepreneur. In the
1970s the former defense department official turned Stanford business professor
articulated a new policy idea for addressing the twin problems of cost and access. He
attempted to combine universal coverage, market incentives, with government regulation
and subsidy to offer an alternative path to reform.
The idea of prepaid group practice can be traced at least back to the recommendation of
the Committee on the Cost of Medical Care in the late 1920s.
73
In the early 1970s another
policy entrepreneur, Paul Ellwood, revived this organizational idea, and offered it as a
approach to addressing the cost issues by substituting a prepaid group practice model for
the dominant existing independent practitioner model. His formulation stressed the value
of keeping the patient well rather than treating disease. Ellwood called his model a
Health Maintenance Organization (HMO). At that point there were a handful of
examples of HMOs. One of the most successful was Kaiser Permanente in California.
Enthoven was familiar with Kaiser and it became the prototype for what he was to call a
managed competition system. By the late 1970s Enthoven was spending time in
Washington promoting his policy idea to the Carter Administration and conservative
71
Judith Feder, “Covering the Low-Income Uninsured: The Case for Expanding Public Programs, Health
Affairs, (November-December, 2001), p. 27-39.; John Holahan, and Shelia Zedlewski, “Expanding
Medicaid to Cover Uninsured Americans” Health Affairs, (Spring, 1991), p. 45-61.
72
Dennis Shea, et al, “Betwixt and Between: Targeting Coverage Reforms To Those Approaching
Medicare, Health Affairs (January-February, 2001), p.219-30.
73
Fox, op.cit. p. 48-51.


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