Out of Patients: Managed Care and Health Care Consumer ‘Empowerment’ in the United States
Author:
Tiffany Veinot
Faculty of Information and Media Studies
The University of Western Ontario
London, Ontario CANADA
tveinot@uwo.ca
Key Words: Consumer Advocacy; Models, Economic; United States; Health System; Managed Care Industry
Introduction
The United States of America (USA) spends the most out of all developed countries on its health care – total expenditures
in 2002 were $1.6 trillion, averaging $5,440 per person. The health care share of the US GDP was 14.1% in 2001 and
14.9% in 2002, whereas the national average for OECD countries was 8.4% of the GDP. Yet, the USA is the only
developed country that lacks a national system for paying for health care for its citizens (1). In fact, 15.6% of the US
population had no health insurance in 2003 - totaling 45 million people (2). For all of the money spent on health care, the
USA actually has lower health status than most developed countries. For example, in a comparison of developed countries
on 16 health indicators, ranging from low-birth weight percentages to infant mortality to age-adjusted mortality, the USA
ranked an average of 12th of 13 (3). Quality of care is also quite uneven across populations and regions (1). It is a paradox
that so much money is spent on health care in the USA, while there are such problems with access and quality.
In addition, drastic changes in the American health care system have taken place since the 1980s that have increased
profit-making in the US health system, including increased privatization, restructuring towards a managed care (MC)
model (1), increasing corporate profits and a focus on cost containment (1). To be blunt, a lot of people are now making a
lot of money in the business of health care in the USA. During this time of rapid change in the US health care system,
there has also been a fundamental shift in the way that ‘patients’ are viewed. Patients in the health care system have been
thoroughly re-positioned as health care ‘consumers’, which connotes a market-type relationship with the health care
system (4). In order to accurately reflect the conceptual center of gravity in the US health system, the term ‘health care
consumer’ will be used throughout this paper.
Health care consumer ‘empowerment’, has become a popular concept in American health care (5, 6). Health care
consumer ‘empowerment’ is widely positioned as a good thing for consumers, as they become more informed, involved
and make choices regarding their care (5, 7-9). In fact, both the MC industry and employers tout greater consumer
responsibility as central to the future of care financing in the USA (5, 10-13). However, critics suggest that health care
consumer ‘empowerment’ has consequences. They state that consumer ‘empowerment’ transfers responsibility for care
onto individuals (5, 6), forcing them to make choices they are not prepared to make, pay more for their care (14, 15),
spend more time treating themselves and their families, and take health risks (5). Critics also argue that consumer ‘control’
does not have the clinical value that has been suggested (6, 16).
This paper will examine the question of who benefits from health care consumer ‘empowerment’ in the USA by examining
the structure and flow of financial benefits in US health system for insured individuals. Through this, I will interrogate the
position of consumers within this system and examine the interests behind the discourse of ‘empowered’ health care
consumers. As a case study, I will also examine one important ‘empowerment’-based practice employed by many
Managed Care Organizations (MCOs): chronic disease management programs (DMPs). I will argue that DMPs benefit
health care industries far more than consumers themselves.
The American Health Care Delivery System
From the perspective of consumers, there are actually several different US health systems. The care one gets depend on
whether one has an employer who pays for health insurance, if one qualifies for government-paid benefits such as
Medicare and Medicaid, if one belongs to a category of persons covered by public health care services, such as Veterans
or Native Americans, or if one is unlucky enough to be one of the many who are uninsured. This paper will focus on
insured individuals. However, it is important to note that access to health care in the USA is not distributed equitably
throughout the population.
Within the health care system for insured individuals, there are multiple purchasers of health care on behalf of third parties:
governments, employers, and to a lesser extent, unions. There is also a significant financial contribution from consumers
themselves. The system has evolved as a hybrid of both public and private financing and delivery, and is increasingly
demanding financing from consumers in the form of out-of-pocket expenses (17).
A significant portion of the employed US population receives health insurance as an employee benefit (56%) (18).
Although the US government has a comparatively limited role in the public delivery of health services, it is a substantial
financer of health services (19). In total, federal, state and local governments contributed a total 46% of dollars spent on
health care in the USA (20). Based on the balance of American state expenditures, funding of private providers appears to
be highly emphasized by the US government. Thirty-three percent of US government health care expenditures in 2002
were administered by two government payer programs, Medicare and Medicaid (20), which pays private intermediaries or
health care providers (21). In contrast, the state spent 13% of national health expenditures in other public expenditures
(20), which focus on public delivery of services .
Health Care Industries
Given the extent of national health expenditures on health care, it is no surprise that the size of the health care industry in
the USA is substantial. As the nation’s largest industry (22), the US health industry employed more than 12.9 million
workers in 2002 (23). Health care industries in the USA for insured people are a mix of non-profit and for-profit players.
The major players include:





Third-party purchasers (employers, government, unions);
Payers (MCOs, indemnity insurance plans, and employer self-insurance plan administrators);
Providers (integrated health systems, health care providers, carve-out care companies);
Suppliers (pharmaceutical industry, medical device and supplies industry, information systems industry, insurance
industry for liability insurance); and
Distributors (particularly pharmacies).
Due to their relative importance in insured health care consumers’ experiences of health care, this paper will focus on the
structure and flow of financial benefits amongst MCOs, health care providers and pharmeceutical suppliers.
Managed Care Organizations
MCOs dominate as payers in the US health care system for insured individuals. In the USA, enrollment in managed care
(MC) health insurance plans rose from 27% of workers covered by employer health plans in 1988 to 95% in 2004 (24). At
the same time, the proportion of enrollment in for-profit HMOs increased from 12% in 1981 to 63% in 1997 (24). MCOs are
“both a financial plan and an organization of services for a specific population” of members (25).
Throughout, the 1990s, MC’s business model focused on cost containment strategies that have increasingly fallen out of
favour with providers and the public (26). This model relied intensively on explicit rationing of care (25), and the major
mechanism for this was the Health Maintenance Organization insurance plan (HMO). HMOs limit member access to health
care providers by requiring members to select from a predetermined roster of providers and use primary care physicians
as ‘gatekeepers’ to more costly care, such as specialists (25, 27). They also made use of mechanisms such as preauthorizations, utilization review, and capitated contracts with providers that effectively transferred risk to them (11, 25,
27). However, a significant backlash against MC has forced reinvention of the MC model (11, 26).
New models emphasize consumer choice and reduce controls on providers. For instance, most MCOs have been forced
to introduce plan types that include more choice of providers, including Preferred Provider Organizations (PPOs) and Point
of Service (POS) Plans (2, 28, 29). As of 2002, only a quarter of commercial insurance plan members were enrolled in
HMO-model plans, whereas two thirds were in PPO and other flexible plans (15). The newer models, adopted by both
MCOs and employers, also include extensive use of consumer copayments to direct care to lower cost options and to
attempt to limit demand for health services (2, 15, 30, 31).
The current business model of MC also includes specific approaches to medical care. MC plans attempt to maximize
enrollment of healthy people, so as to be able to provide health care for less money (25) - a practice which is now being
actively discouraged by employers (32). MCOs also strive to reduce or eliminate variability in treatments (25) - hence their
widespread use of clinical practice guidelines and drug formularies (2). MCOs also actively encourage service substitution
(25), such as by using nurse practitioners or physician assistants instead of doctors, outpatient care instead of inpatient
hospital care, and generic instead of branded drugs. Another key component of MCO business models is disease
management, which will be further examined later in this paper.
The MC industry in the USA is highly concentrated, with the top 10 chains accounting for more than half of total health
insurance plan enrollment (2). The largest MCO chain is the Blue Cross Blue Shield Association, which is a federation of
41 mostly non-profit independent, locally-operated plans covering 90 million Americans (2). The largest non-profit MCO is
Kaiser Permanente, with more than 8.4 million members in 2004 (33). Within the for-profit sector, one company has an
incredible 26.3 million enrollees (see Table 1). The health insurance market is dominated by one or two companies in
many states (34, 35). For example, the largest three plans control less than 50 percent of the total enrollment in only three
state markets, and less than 65 percent in only fourteen state markets (36).
Table 1 - Top 10 national managed care firms – 2003-2004 (33, 37)
Rank
Firm
Total
2003 Operating
Enrollment
Revenue
(Million $)
1
WellPoint, Inc.
26,341,634
38,336.1
2
UnitedHealth Group Inc.
19,559,601
28,823.0
3
Aetna Health Inc.
11,773.930
17,976.4
4
Health Care Services Corp.
10,255,866
8,190.4
(Blue Cross Blue Shield of
Illinois)
5
Cigna Health Care Services
8,905,248
18,808.0
Corp.
6
Kaiser Permanente
8,469,428
28,000.0
7
Humana Inc.
5,269,144
12,211.1
8
WellChoice, Inc.
4,943,317
5,382.6
9
Blue Cross Blue Shield of
4,760,816
7,966.9
Michigan
10
Health Net Inc.
3,692,500
11,064.7
2003 Net
Income
(Million $)
1,709.5
1,825.0
933.8
Non-Profit
620.5
Non-Profit
228.9
201.1
Non-Profit
323.1
Medical Loss
Ratio (2003)
80.5
80.0
77.7
Not available
86.9
Not available
83.5
81.5
85.3
82.7
Every year between 2000 and 2004, health insurance premiums charged by managed care companies have experienced
double-digit growth (2). In particular, premiums increased by 11.2% in 2004 and 13.9% in 2002 (2), and in total, the annual
cost of health insurance has climbed 59% since 2001 (35). As a result, many employers are exploring redesign of benefit
plans, particularly use of consumer-directed health plans (CDHPs). Moreover, increasing numbers of employers have
been dropping coverage for their employees in the face of rising costs (15).
The medical costs facing MCOs have not risen as quickly as health insurance premiums that MCOs charge third-party
payers. As a result, the profits of some big insurers have doubled or tripled in each of the past two years (35). Concerns
about insurer profits have reached the point where some governments have intervened: close to a dozen states put
pressure on Blue Cross Blue Shield plans to reduce their premiums because of high profits (35). Average net profit
margins in 2003 for publicly-traded MCOs were 5.6% in 2003 (2), increasing steadily since a low of 1.8% in 1999 (15).
However, industry performance varies widely, and the most profitable publicly traded MCO, First Health Group, garnered a
phenomenal 17.1% profit margin in 2003 (2). Notably, publicly-traded MCOs are also known for their generous
compensation packages for senior executives - for instance, in the average compensation for the highest-paid executive in
each of the top 11 MCOs was approximately $15.1 million in 2002 (38).
Health Care Providers under Managed Care
MCOs are middlemen in the health care system. They offer insurance products to third-party purchasers, and most in turn
contract with health care providers to provide care. Health care providers have a more local or regional scope than MCOs
and have tended towards fragmented industry structures. Additionally, because there is a limited supply of insured
consumers in the US health care system, providers are greatly reliant on payers such as MCOs in order to provide them
with adequate patient loads. This structural position ensures that MCOs have an advantage in their relations with
providers, and has historically led to pricing and contractual concessions that benefit MCOs (25, 27).
In general, the proportion that MCOs spend on health care costs is called the medical loss ratio (MLR) (2). An MLR of
approximately 80% (spending 80 cents of each premium dollar on medical costs) is a benchmark in the field (2). The
remainder of premium dollars are spent on sales, administration, and profits for shareholders. In order to keep an
‘acceptable’ MLR, MCOs rely on series of contractual approaches with local providers to reduce costs. Of course, MCOs
attempt to negotiate contracts that have the lowest costs possible so as to ensure a suitable MLR. Moreover, MCOs have
historically contracted with providers on a capitated basis (25, 27, 28, 39), thus transferring some of the financial risk of
health care onto providers (25). However, as a result of the backlash against MC, there has been a reduction in use of
capitated contracts in recent years (2, 40).
With the advent of MC, acute care hospitals and physicians have increasingly faced competition. For example, MCO’s
substitution strategies, such as moving acute care into outpatient settings or the use of physician extenders such as nurse
practitioners have cut into the market for their services. However, in order to shore up their position in the face of managed
care companies, there has been increasing industry consolidation amongst health care providers. Moreover, there has
been a significant trend towards privatization of previously non-profit hospitals as a part of this consolidation activity (41).
Amongst physicians, there has been a significant decline in the percentage of solo practices (32), and a drastic increase in
the percentage of physicians in group practices (34).
Pharmaceutical Suppliers
American pharmaceutical companies dominate international markets (42), and the industry is also highly concentrated.
The top 10 pharmaceutical companies accounted for 60% of US retail drug sales, and half of worldwide drug sales in 2003
(42). Numerous ‘megamergers’ have taken place in the last five years, many of which have combined firms in different
countries, as international companies attempt to enter the highly profitable US market (42).
The top pharmaceutical companies have staggering revenues. For instance, in 2003, Pfizer garnered 47.08 Billion in
sales, Glaxo SmithKline had $30.78 Billion in sales, and Merck & Co. had sales of $22.52 Billion (42). The major branded
US pharmaceutical companies are also amongst the most profitable industries in the USA – for instance, the average
profit level of branded pharmaceutical companies in 2001 was a phenomenal 20% (43). The USA market accounts for
53% of the world pharmaceutical market, and is by far the most profitable market for the pharmaceutical industry (42)
because the USA is the only developed country in the world where drug pricing is not subject to government pricing
controls (42). Contributing to the financial health of the pharmaceutical industry is the fact that demand for medicine is not
susceptible to ups and downs in the economy (42), such as in the way that automobiles are. Moreover, consumers
generally maintain drug regimens despite price increases (42).
Much of the growth in expenditures in the US health system can be linked to the use of pharmaceuticals (44). For
example, in 2002, pharmaceutical products were the third largest source of national health expenditures in the USA (20).
Ten percent of national health expenditures were spent on pharmaceutical products, which totaled $160 billion in sales
(20). Despite unrivaled profits in the industry, prescription drug costs have consistently grown at the fastest rate amongst
all types of health expenses in the USA (43). From 1997 to 2002, only 42% of the increase in pharmaceutical costs was
due to increasing use (2). Increasing drug costs have led to third party payers requiring more consumers to pay for
portions of their drug expenses (42), thus increasing overall out-of-pocket expenses. While MCOs have attempted to
reduce their expenses on products from medical suppliers through use of generic drugs and use of purchasing
intermediaries, they generally are forced to pay the prices set by pharmaceutical companies.
The Position of Health Care Consumers in the US Health System
Health care consumers are both intended beneficiaries of the health care system and increasingly, payers for care. Money
flows through the health care system ostensibly in order to provide insured individuals with health care. But en route, it
makes a lot of money for private industries. As health industry profits increase, medical costs have also increased. But
consumers are increasingly asked to pay the price. Overall, consumers are paying an increasing portion of health care
costs (17) as MCOs and employers increasingly emphasize containing health care spending by increasing consumer
‘responsibility’ or ‘financial stake’ in their care – primarily through a number of cost-shifting mechanisms that discourage
use (15, 30, 42). For instance, a 2002 survey found that more than 60% of employers planned to shift a greater
percentage of costs to employees, including increased coinsurance, co-payments and deductibles (15). Many employers
were also exploring new, high-deductible and co-payment plan designs under the rubric of “consumer-driven health care”
(15). Many employers consider these plan designs to be central to their future cost-containment efforts, and MCOs project
that consumer-driven benefit designs will unload more cost burden on consumers, which along with continued increases in
premiums, create a very positive financial outlook for them (30).
These increases in out-of-pocket payments are not neutral for consumers – particularly if they have chronic conditions or
acute health care crises. For example, one study found out-of-pocket health care payments for health care consumers to
be strongly predictive of the number of chronic illnesses a consumer had (45). Moroever, 51 million Americans with health
insurance spent one tenth of their income on health care and 6.8 million spent more than one third of their income on
health care (46). Scandalously, half of personal bankruptcies in the USA were related to medical causes (47), and 75.7%
of these individuals had insurance at the onset of their illness (47)
An additional problem relates to the problem of reduction in benefits in the face of rising health care costs. Over five million
Americans became uninsured between 2000 and 2003 (18). In this time, 3.4 million fewer employed workers received
health coverage from their own employers, and coverage also dropped for their dependents (18). It is suggested that rising
premiums are at least partly to blame for this trend (18). There is also likely to be declining health coverage amongst
government health insurance beneficiaries. For instance, Medicaid beneficiaries, as many states plan to tighten eligibility
criteria in response to budget shortfalls (2).
What happens when people lose health insurance coverage and become uninsured? At present, almost one in five
Americans reported postponing seeking medical care because they couldn’t afford out-of-pocket costs (18). Uninsured
adults are less than half as likely as those with insurance to receive needed care for a serious illness (48), and in fact, it is
estimated that a lack of health insurance causes roughly 18,000 unnecessary deaths every year in the USA (49).
Moreover, for people who do have insurance coverage through an MCO, there are concerns about quality of their health
care (27, 50-52). As an example, one national survey of consumers found that 48% reported some kind of problem with
their health plan over the past year, with the most common problems being delays or denials of coverage or care (13%);
billing or payment problems (13%) and difficulty seeing a physician (10%) (53). And in a national Consumer Reports
survey, 12% of survey respondents and their families who suffered serious medical problems in the last year said they had
difficulty getting care through their health plans that they and their doctors believed necessary (51).
Given the structure of the US health system, and consumers’ experiences of both care and lack of access to care, I would
argue that health care consumers in the US health system are structurally exploited. More is paid for the health care of
consumers than they get in return – and they pay a price for this in terms of their own financial security and well-being.
Thus in the US health system, many players benefit – but more often than not, it is not health care consumers. And
although there has been a great increase in health care consumer advocacy in the USA over the past thirty years that has
led to some gains for consumers (54-58), the structural position of consumers remains. It is within this vital context that I
now shift to a discussion of health care consumer empowerment in the practices of MCOs.
Health Care Consumer ‘Empowerment’ in the United States
While there are many different ideas of what constitutes ‘empowerment’, I will highlight two key definitions for their
relevance to the health sector. One widely cited definition posits that ‘empowerment’ is: “the ability of individuals to gain
control socially, politically, economically and psychologically” (59). A further influential definition defines ‘empowerment’ as
“a process of helping people to assert control over the factors which affect their lives” (60). This process is identified as
encompassing “both the individual responsibility in health care and the broader institutional, organizational or societal
responsibilities in enabling people to assume responsibility for their own health” (60). Thus, central to the concept of health
care consumer ‘empowerment’ is the idea of individual control - over one’s own health and in the context of the health care
system. It is this basic definition that I will use to frame this discussion of health care consumer empowerment.
Interestingly, notions of health care consumer ‘empowerment’ permeate the strategies and services of MCOs. All of the
top five MCOs in the USA by enrollment, UnitedHealth Group, WellPoint, Blue Cross Blue Shield of Illinois, Aetna and
Cigna (15) espouse consumer “empowerment” or its conceptual partners, “informed decision-making” and “active
involvement”. For example, WellPoint states that: “Consumer choice and empowerment are the hallmarks of WellPoint's
business strategy”, which it claims to facilitate through giving consumers/members choices (61). Aetna states that they
“put…information to work to help you make informed decisions” (62). Additionally, in providing a rationale for their 24-hour
information line, Cigna states that “Informed, empowered employees are more likely to make appropriate health care
decisions. We believe that adds up to more productive employees, and better control of your health care costs” (63).
But what do MCOs mean when they refer to health care consumer ‘empowerment’? And how successful are these
companies in increasing health care consumer’s control over their own health and in the health care system? In order to
explore this question, I will examine a popular type of ‘empowerment-based’ program included in many MCO plans disease management programs.
Managed Care and Disease Management (DM)
Because of the high cost of paying for care of sick people, increasing numbers of health plans are focusing on closely
managing care of those with chronic illnesses (2, 64). As a result, the majority of MCOs include Disease Management
programs (DMPs) (65) in their cost containment strategies (15, 26, 66), and 50% of employers incorporated DM in health
plan designs in 2003 (15). DMPs have been defined as a “system of coordinated healthcare interventions and
communications for populations with conditions in which patient self-care efforts are significant”, that emphasize…“patient
empowerment strategies” (67). DMPs encourage consumers to play a more active role in their care (‘self-management’)
(65).
DMPs are primarily delivered on a for-profit basis in the USA, and are most frequently administered on a “carve-out” basis
by MCOs (68, 69) Within carve-out contracts, DMPs provide services to patients with particular illnesses on an opt-in or
opt-out basis (70). The most popular DMPs are for Diabetes, Coronary Artery Disease and Congestive Heart Failure (71).
DM carve-out contracts through competitive bids ranged from just under $2M to $6M from 2000 to 2004 (71). Revenues
for DM companies, including both MCO and employer-based contracts, are projected at $1,107 million dollars in 2005
(72). Independent companies such as American HealthWays, HealthDialog, LifeMasters and CorSolutions dominate MCO
carve-out contracts (72). These four larger players that together represented 37.9% of the industry in 2002 (72). Most of
the leading DM carve-out companies are privately held, often with financial backing from venture capital firms or other
investors. Where published, profit margins in the industry are reported to be in the 10% range.
It is claimed that DMPs are good for everyone: improving quality of care for chronically ill people at the same time as
reducing health care costs (64, 73). To accomplish these twin goals, most DMP programs include: use of evidence-based
guidelines, patient population identification processes, patient self-management education, evaluation, patient risk
identification and matching interventions with need (65). Additionally, the Disease Management Association of America
states that full-service DMPs include: collaborative practice models and a routine reporting and feedback loop (67). DMP
care models thus rely heavily on consumer education and information (74).
DM involves intensive commodification of consumer health information, as well as information about health care
consumers. In DM, health information is something that can be bought and sold by virtue of its linkage to clinical and
financial outcomes – in return for payment, DMPs promise to save MCOs money and improve clinical outcomes. In so
doing, DMPs work in large part by collecting and analyzing patient information and giving consumers health information.
Hence the use value of health information is transformed into exchange value in order to facilitate capital accumulation
(75) for DM companies. For instance, a core component of American Healthways’ DMPs for diabetes and heart failure is
the “Care Call”, in which nurses make outbound calls to consumers to: provide health information and education, remind
consumers about standards of care, coach consumers about questions to ask providers, assess their current health
status, encourage visits to their primary care providers if symptoms warrant it and reinforce positive behaviors (76, 77).
The frequency of these calls is determined by American Healthways’ stratification processes based on detailed consumer
information (76, 77). Most DMPs also include mailed consumer health information and an in-bound 24-hour “hotline” for
inbound member calls (68, 74). Many DMPs also provide proprietary Web sites to their plan members (78), such as
CorSolutions, whose member-only site is replete with health tools, videos, news stories and online support groups (79).
DMPs store and manipulate extensive information about health care consumers, including medical, pharmacy and lab
claims, lab results, self-reported data, summaries of telephone calls, and biometric monitoring data (74, 76). This
information is actively used to stratify consumers into different interventions, using such techniques as predictive modeling
(80). Consumer’s personal health information is also used to monitor their ongoing status, communicate with physicians
through a phenomenon known as ‘exception reporting’, and for tailoring interventions (68). Gathering and analyzing
consumer information is thus an important service offered by DM companies for a fee.
Despite the enthusiasm about the impact of DMPs on quality of care, there is some lack of clarity regarding their true
clinical benefits. Evaluation of DMPs is difficult given that there is a lack of consistency in clinical outcomes reporting
across vendors (68), there are different definitions of DM employed in different studies, and the clinical outcomes of DMPs
are notoriously difficult to measure and interpret (68, 81, 82). Many plans thus report on clinical process measures, such
as increases in the amount retinal screening, foot exams or lipid testing in diabetic patients (74, 83, 84); appropriate use of
drugs for congestive heart failure (77) or subjective perceptions of behavior change (76). Patient satisfaction is also
frequently assessed (85). However, these measurements do not necessarily add up to improved overall care.
The impact of DMPs on health outcomes largely remains to be proven (68, 82, 85-88), and study results to date have been
inconsistent. Some initial outcome studies of DMP-type programs have found statistically significant improvements in
clinical outcomes for diabetics, such as improved HBA1c levels (89-91) and fasting blood glucose levels (90). Additionally,
a systematic review of 102 studies of DMPs found that 45% of studies reported positive outcomes related to disease
control (85). However, the authors note that the definition of DMPs employed in their review may differ from that used in
practice, and highlight the possibility of publication bias in favour of significant or positive results (85). In contrast to some
of the above positive findings, Cigna’s diabetes DMP program led to a 22-30% decrease in hospitalization, while clinical
results were not statistically significant (83). A systematic review of outcomes of DMPs for heart failure found a reduction
in costs, but inconclusive effects on mortality (87). Additionally, a meta-analysis of 11 studies of DMPs for rheumatoid
arthritis found that the impacts of DMPs on functional status were inconclusive (86).
Interestingly, more conclusive results for DMPs relate to cost savings. Reductions in health care costs having been
associated with many DM and self-management interventions (66, 83, 87, 89, 91-93) – most notably from reduction in
hospitalizations. There may also be conflict between cost reduction and desired outcomes of improved care and health
outcomes. For instance, a rigorous study of DMP programs, which focused on the experience of Kaiser Permanente’s
DMPs over 6 years and across 4 chronic diseases, found that while the program was able to increase quality of care, the
program did not reduce costs (73). The authors suggest that it may be impossible to both improve quality AND reduce
costs (73). As a result, they suggest that quick savings promised by many DMPs may actually not be due to an
improvement in care quality, but rather DMPs may act as a utilization management (UM) tool that is delivered in a way that
is more acceptable to people than in strict HMO plans (73). Until a public backlash against MC in the late 1990s made it
difficult to pursue such strategies, UM was one of the primary cost-containment approaches of MCOs. The key to UM is
limiting usage of health care in order to reduce costs – historically through pre-approval mechanisms for medical
procedures and using primary care physicians as gatekeepers to specialist care (25). Thus it may be that DMPs are a
‘friendlier’ way of achieving aims of reducing health care usage – potentially by having nurses coach people away from
using expensive care, and towards less costly alternatives. Cost savings may also be related to service substitution (73),
where expensive physician visits are replaced by telephone calls from nurses.
Finally, do DMPs empower health care consumers? When defined as increasing consumer control over their own health, it
is possible that DMPs may give consumers useful tools and information for managing their health. However, the care that
people receive through DMPs is dictated by something other than consumer desires, preferences or priorities - the overall
agenda of DMPs is driven by MCOs that contract them to reduce their costs. As such, the focus is on compliance,
ensuring appropriate use of health care resources, and monitoring. When empowerment is defined as increasing
consumer control in the health system, it is fair to conclude that DMPs cannot empower consumers. In DMPs, we see a
magnification of profit-making in the health system, where MCO cost containing priorities lead to results-based contracts
with DM companies, and where DM companies make profits trying to reduce health care costs per chronically ill member.
Thus the process of extracting financial surplus from the care of health care consumers continues and expands into new
domains – but this time, it is romanticized by claims of empowering consumers.
Conclusion
The US health care system is a paradox of vast expenditures in the face of in equitable distribution of care; increasingly
high-tech medicine in a country with a lower health status than its OECD counterparts; and increasing profits alongside
rising burdens placed on individual consumers. The institution that should theoretically protect and support health care
consumers – the US government – structures its funding in such a way as to encourage and support private capital
accumulation with public monies. Key health care industries have assumed monopoly and globalized structures that
ensure maximum profit alongside a minimal ability of providers and consumers to exert power in the marketplace. It is in
this context that health care consumers are exploited –generating surplus for these powerful players while their own care,
security and well-being is undermined.
In a stroke of irony, or perhaps marketing brilliance, these same powerful players claim that they ‘empower’ consumers
through their services. However, as a close examination of disease management programs reveals, reduction in costs can
be a more conclusive result of these empowerment-based programs than improvement in care, consumer control or health
status. Thus, DMPs can be viewed as another strategy for capital accumulation – one that focuses on a vulnerable
population of chronically ill individuals. Thus it is primarily health care industries, and not consumers, who benefit from
health care consumer empowerment as it is practiced by MCOs in the USA.
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