If you were going to design a system for covertly rationing health care, it would be very useful to have a central concept like "managed care," about which everybody could communicate using the same terminology, but while meaning entirely different things.  

"Pure" managed care

In its purest form, managed care is merely an administrative philosophy, a tool, and, being merely a tool, managed care is value-neutral.  Like any tool, it is neither good nor bad - what is important is how the tool is used.

Managed care aims to organize, coordinate, and control the chaotic health care system, thus achieving the twin goals of producing the best possible outcomes of care, while at the same time eliminating waste and inefficiency.  This can be done, it is proposed, by applying to the health care industry some of the basic management principles that have been used successfully in other industries.  Of course, there are many theories of industrial management, and hence many industry-derived principles that could be applied to health care.  But the unifying idea behind virtually all industrial management principles can be boiled down to one word: standardization.

A discussion of how "pure" managed care uses standardization to improve certain medical processes, along with the benefits and drawbacks of using such techniques, is given in Section 4 of the Grand Unification Theory.  Suffice to say that these days when the term "managed care" is bandied about, it almost never in reference to such "pure" concepts.  Instead, it is almost always in reference to the term "managed care" as bastardized by either the Clintonians or the Gekkonians.

 Clintonian managed care

As you will recall, the Clintonians believe that the problems in our health care system can be traced to human weaknesses (specifically, physician greed).  Thus, fixing these problems depends on setting public policy and promulgating governmental regulations. One can readily see how a theoretical construct like managed care might appeal to such an outlook, since managed care offers to remove some of the choices humans have to make in delivering health care (choices which are easily colored by greed), and to replace them with externally-generated processes and procedures. Philosophically, it’s a good fit. 

Because Clintonians genuinely like the ideas behind managed care, the people who conceived of and developed those ideas – the academics, health care experts, government commissions, economists and editorialists –– tend to gravitate to the Clintonian camp.  Thus fortified, Clintonians espousing the ideals of managed care tend to sound like very much like purists.  They are proselytizers, who truly believe in applying continuous quality improvement, critical pathways, information management, and other efficiencies of industrial management to health care. Because of their obvious sincerity, and because many of their ideas have considerable merit, it is easy for right-minded folks to fall in with this crowd.

What differentiates the Clintonians from true managed care “purists” is in what they mean by the word “managed.”  In classic managed care, “manage” merely refers to the application of management principles such as standardization. To Clintonians, manage means “regulate.”  Managed care is, to a large extent, simply a convenient tool for advancing their basic belief in policies and regulations to control human behavior.  Invariably the specific recommendations put forth by Clintonians have much more to do with establishing a centralized regulatory structure for health care than they do with classic managed care principles.  To them, an envisioned system of regulations has become synonymous with managed care.

Gekkonian managed care

The Gekkonians come at managed care from an entirely different direction.  The chief problem with health care, they believe, has always been that it is treated as something other than the business it is.  The solution, therefore, is to open up health care to the marketplace, to let competition and the free market solve its problems.   

Historically, the Gekkonians have little claim to the managed care peerage. In fact, Gekkonians spent decades decrying managed care as socialist heresy.  Freedom and competition is their battle cry, and managed care smacks too much of social engineering.

In recent years, however, the Gekkonians have co-opted the term “managed care” to their own ends, and in so doing have utterly changed its meaning.  Their tie-in to managed care is quite tenuous; indeed, it is almost brazen.  Since managed care techniques derive from industrial management principles, they hold, managed care is actually a child of the open marketplace.  Thus, Gekkonians seem to be saying, what managed care is really all about is applying the principles of free enterprise to the business of health care. Managed care to Gekkonians means managing the finances of health care.  It means dog-eat-dog, compete until you die, for-profit health care.  Any actual relationship between Gekkonian managed care and classic managed care is purely incidental (i.e., sometimes standard managed care techniques can be useful, but only if they give you a competitive advantage.)

Managed care in everyday terminology

Both faces of managed care, then, have co-opted the terminology of “pure” managed care in order to advance their own goals. Managed care is a means of establishing a stronger system of regulation on one hand, and a means of seeking profit on the other.  Both schools of thought are prominent today, and both are actively and loudly advancing their respective points of view.  A lot of the turmoil we have seen over the past decade, in fact, can be explained by the competition and interplay between these two schools of thought as they each try to advance their visions for American health care.

The Clinton's health care proposal during their first term was the embodiment of Clintonian managed care. When it went down to ignominious defeat, the Gekkonians had virtually free reign for the next several years.  A rapid transformation of our health care system thus took place during the 1990s, to one controlled almost exclusively by for-profit HMOs (or not-for-profit HMOs, now forced to act like for-profits, inasmuch as their continued survival depends on pleasing the bond market).  

There is general acknowledgement today that modern HMOs (i.e., the Gekkonians) have failed to deliver on their promise of efficiency, cost-savings, increased quality, and universal access.  The need to re-address the health care system in some big way is rapidly becoming more obvious.

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