Medical Savings Accounts Study
Supply Based Controls and "Managed Competition"

In many current reform proposals, managed competition strategies invoke top-down controls through externally regulated, competing, complex, highly organized systems that integrate financing and delivery of health services.10 The striking feature of these managed care proposals is that the organizational structure decides what is best for the patient. These systems constrain consumer choice of provider and independent sources of care. They tell patients where, what, and how they will receive services. The health care seeking, delivery, and reimbursement process is overseen and regulated by a public agency. This is generally an authority or appointed commission that determines the rules of engagement and participation by all parties in the system.

This public authority or commission commonly establishes global budgets or sets maximum health plan premiums and, indirectly, what providers will be paid. The commission establishes the rules and policies that guide implementation of compulsory purchase of insurance. Mandates specify what services employers and employees can receive, set minimum coverages and establish the rules by which insurance carriers must play. This central authority also establishes the requirements for health plans deemed "accountable" and "eligible" according to strict criteria of organization, development, operation, and financing.

Specifically, the Washington State 1993 Health Services Act includes much of the above and more.11 The Act requires all residents to purchase a "uniform benefits package" from a Certified Health Plan (CHP). This CHP must provide the benefits included in the uniform benefits package to enrolled Washington residents for a prepaid per capita community-rated premium. The premium cannot exceed the maximum premium established by the Health Services Commission. The CHP must provide such benefits through managed care systems according to the rules of the commission.

Evergreen Freedom Foundation P.O. Box 552, Olympia, WA 98507 Phone: (360) 956-3482, Fax: (360) 352-1874 Email: effwa@effwa.org