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Public Health Services and Managed Care*

Policy Date: 1/1/1996
Policy Number: 9616(PP)

The organization of the delivery and financing of medical care and health services has been changing rapidly in this decade. These changes are in part responses to perceived ills of the previously existing delivery system, a system that has left millions of American without the most basic means of staying healthy: a healthy environment, healthy behavior, healthy neighborhoods, decent jobs, adequate income, community health services, and access to basic medical care.
Managed care, defined as an organization that provides and/or finances medical care using provider payment mechanisms that encourage cost containment, selective contracting with networks of providers, and controls on the utilization of health care services, has emerged as one of the major types of organizations for the financing and delivery of medical care and health services. Other changes include the merger of major health care institutions and the increasing role of for-profit corporations.
These changes provide the opportunity to improve access to primary care and preventive services and to advance toward universal insurance coverage. However, they can also pose a threat to important public health and medical services and could decrease access to health care for all Americans, including vulnerable populations.
Managed care systems provide an increasing proportion of health insurance to employed persons in the United States. States seeking to reduce the cost of their Medicaid programs have turned to managed care systems to serve some or all of their Medicaid clients. The federal Medicare program is increasing the number of its enrollees who are served in managed care systems.
As managed care systems expand, important public health concerns arise:
o What will be the impact of managed care on the quality of medical care, both in the short run and in the long term? What are the crucial elements to assure accountability for quality care?
o Will managed care systems drain away resources now used to provide care to underserved populations without actually serving them? Or will the public sector and managed care systems join to preserve and enhance these services using the savings created by a more efficiently managed health care system? How can we assure that savings are used to meet health care needs, not simply corporate needs?
o Will managed care organizations effectively provide preventive services to their members? To the broader population, including the uninsured? How will public health services be integrated with services provided by managed care organizations? Will managed care organizations successfully integrate medical and social services to improve the health status of the population?
o Since selecting a managed care organization binds a person to an integrated network of providers, how will consumers be adequately informed about the consequences of various choices on the quality, comprehensiveness, and cost of health care? How will the consumers' rights be protected?
o How will providers in managed care organizations be influenced by the incentives and management arrangements affecting the type and quality of care that providers give?
o Will managed care organizations gather and disseminate the health status and utilization data necessary to make informed health policy decisions and to conduct clinical and epidemiologic research for each geographic area? Or will access to member, clinical, and epidemiological data be restricted, preventing population-based data from being collected and used for policy analysis?
The American Public Health Association (APHA) has developed a set of principles on managed care. These principles are designed to allow APHA to address the effects of the increasing role of managed care in US health services, particularly the impact on public concerns for universal access to care, disease prevention, and improvement in the health status of the entire population. These principles will also allow APHA to evaluate the performance of managed care organizations, assess Medicaid and Medicare managed care programs, and advocate for responsive systems of care for the whole population.


1. Organizations of health care delivery should promote the highest quality of health care for all people. In the move toward managed care, it is important that the need to provide health care for the entire population, including those who are presently uninsured, remain a fundamental basis of all policy-making.
2. Access to timely and linguistically and culturally appropriate primary care and preventive services is essential to assure health. Therefore, health care must be available on an equitable basis to all, especially including individuals and groups at risk for poor health and people with special health care needs.
3. Access to qualified health professionals is crucial to assuring quality of care. Standards for primary and specialty care provider capacity, specific to the size and needs of the population that a plan proposes to serve, should be established. Plan enrollment levels should not exceed provider capacity.
4. The relationship between patient and health care professional is central to high-quality health care. Choice of health care provider is important in establishing and maintaining this relationship, so that consumer choice among qualified health care professionals is essential.
5. Comprehensive health services include environmental health and protection, health promotion and prevention, primary care, specialty care, emergency care, and long-term care services. Organization of health care delivery must promote access to these comprehensive health services, with continuity within the network and smooth transition for out-of-network care. The organization must not constrict access to necessary health services that are outside a particular financial or network arrangement.
6. Continuity of the provider-patient relationship can in many cases be critical for successful care. The reorganization of health service delivery, including the restructuring of public programs and changes in purchaser contracts, should protect established relationships that are affording effective treatment, especially in the case of treatments for complex, chronic, or disabling conditions.
7. Personal medical information must be confidential, even when data are used for public health purposes. Information on health status should never be used to discriminate against individuals or groups in enrollment and provision of care, or in contracting with providers.
8. Financial and other conflicts of interest must not interfere with clinical decision making about a patient's health care needs. Conflicts of interest may include contractual agreements, ownership, incentives and disincentives, and other arrangements that may introduce extraneous factors into clinical decision making. Financial incentives based upon withholding or reducing care should be prohibited.
9. Impartial grievance procedures are critical to resolving disputes in managed care organizations. These procedures should be timely, accessible, and appropriate; should include provision for appeal beyond the managed care organization itself, and should involve review of disputes by a third party that is independent of health plan financial incentives.
10. Organized systems of health care should be accountable for providing more than the services offered directly to their members or enrollees. There is a clear need to hold managed care organizations accountable for population-based outcomes as well. Some portion of cost savings and/or profits should be utilized to improve the health status of the whole community.
11. Data systems of managed care organizations should be designed to provide evaluation and accountability information, including public health data needed to evaluate the health of the population.
12. Integration of clinical public health services into managed care networks is needed. This needs to address the preservation of essential public health services, including environmental health protection and health promotion/prevention, the community infrastructure for health services of the uninsured, and the mechanism for assuring accountability of managed care organizations.
13. Information is essential to consumer involvement in health care, for making choices among the plans available, for using services, and for participating in policy development. Providers must be free of constraints that inhibit disclosure to patients of information relevant to their care. Policy development by managed care organizations is a matter of legitimate public interest.
14. Information about a plan should be assured so that consumers can act as prudent purchasers and to assure accountability. This includes a plan's benefits and its limitations, its network and its ownership, and its performance in terms of quality and patient satisfaction. Accuracy and comparability of information among plans in a health care market should be assured.
15. Fair marketing and enrollment procedures are needed to assure equity in access to health care. In addition to full and accurate marketing information, equity demands that practices that systematically exclude classes or groups of people based upon illness burden, race, ethnicity, occupation, or sexual orientation should be strictly avoided.
16. The governance of managed care organizations should ensure a strong, effective role for enrollees and health care providers.

* Adopted in principle in 1995 by the Governing Council for final wording by the Executive Board in 1996.