RE: HMOs (was re: Doug's question)

["Fellows, Jeffrey" <jmf9@xxxxxxx>]

I agree wholeheartedly with Jim's statement that even if health outcomes
could be quantified accurately, the focus would still be on cost
minimization, and hence profit maximization. Jeff


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From: James Devine
To: pen-l@xxxxxxxxxxxxxxxxxxx; Fellows, Jeffrey
Subject: HMOs (was re: Doug's question)
Date: Monday, December 08, 1997 11:27AM

thanks, Jeffrey, for the useful analysis of HMOs and productivity!

>The difficulty in measuring and quantifying health outcomes has been an
>important factor leading to practice protocols' primary focus on cost
>minimization.

I think that even if they could measure output, they wouldn't care about
it. What they care about is total revenue minus total cost (or stated as
a
rate of return). Because HMO revenues are largely fixed per patient once
the deal has been struck, they try to profit by cutting costs.

BTW, in case anyone cares, I agree with Anders' comment on "Doug's
question" and Harry's comment on "dialectics, etc."

in pen-l solidarity,

Jim Devine   jdevine@xxxxxxxxxxxxxxx &
http://clawww.lmu.edu/1997F/ECON/jdevine.html
"The only cause of depression is prosperity." -- Clement Juglar.