A History of Managed Care
In 1910, the Western Clinic in Tacoma, Washington offered a broad range of medical services exclusively through its providers for a premium payment of $.50 per month. It served lumber mill owners and employees.

In 1929, Baylor Hospital (Texas) agreed to provide on a prepaid basis, coverage by the case at its hospital for some 1,500 teachers; this arrangement represented the origins of Blue Cross.

In 1937, the Kaiser Foundation Health Plans were started and they were intended to finance the medical care of the Kaiser Construction Company's workers and their families.

To reduce the number of mortgage defaults that results from large medical expenses, the Group Health Association (GHA) was started in Washington, DC; this was a nonprofit consumer cooperative, created on behalf of the Home Owner's Loan Corporation.

In 1944, the Health Insurance Plan (HIP) of Greater NY was formed to provide healthcare coverage for City of New York employees.

In 1947, the Group Health Cooperative of Puget Sound was formalized, having been organized by 400 families who contributed $100 each.

The HMO Act of 1973
· Grants & loans available for planning and start-up phases of new HMOs as well as for service area expansions
· State laws restricting development of HMO's were overridden for HMO's that were federally qualified
· Established process for HMOs to be federally qualified
· Dual choice provisions requiring employers with over 25 employees who offer in-dementia coverage to also offer two federally qualified HMOs, one closed panel and one panel.

The Tax Equity and Fiscal Responsibility Act of 1982
· Codified Medicare risk contracts 1985 Omnibus Budget Reconciliation Act
· Reemphasized 50/50 rule -- to be approved as a health plan, one needs to see a 50/50 split: Commerical and Medicaid lives (waivers for "good" Plans, abounded)
· Requires member rights notification
· Expanded peer review (PRO)
· Mandated study of physician incentive arrangements

1997 Balanced Budget Act of 1997
· Permits contracts with PSO and PPO plans, Private FFS and MSAs
· New eligibility regulations
· Emphasizes on contractual language issues Managed Care

Another perspective of the History of Managed Care:
1929 Ross-Loos clinic of Los Angeles; Water & Power Authority; then others
1929 hospital insurance-Blue Cross in Tx
1930-Sidney Garfield-Kaiser Permanente For Workers, Aqueduct of the Colorado River (emptying in L.A.
1929 Dr. Shadid' prepaid contract Rural Farmers Cooperative in Elk City, OK
from Kassirer, Ginzberg, Ostow. "Is Managed Care Here To Stay?" New Eng J Med 4/3/97 HMO Act of 1973: pursuant to P.L.93-222 per Paul Elwood's "Health Maintenance Strategy" leading to Federally Qualified HMOs

Source: "Primary Care Strategy" Managed Care, History of www.mcol.com

A comprehensive presentation used by the American College of Managed Care Medicine (with permission, 3.14.02 Dr. W. C. Williams via Dr. Balvindar S. Sareen)

See also, "The Emerging Managed Care Paradigm: Health Care in Transition." Medical Interface. Vol 7(9); Sept., 1994:58-59.