Alain Enthoven: An Outspoken Champion for the Prepaid Group Practice.

lain C Enthoven, PhD, is the Marriner S Eccles Professor of Public and Private Management (emeritus) in the Graduate School of Business at Stanford University and a Senior Fellow in the Center for Health Policy at Stanford’s Institute of International Relations. He holds degrees in economics from Stanford, Oxford, and the Massachusetts Institute of Technology. In 1977, while serving as a consultant to the Department of Health and Human Services in the Carter administration, he designed and proposed the Consumer Choice Health Plan, a plan for universal health insurance based on managed competition in the private sector. The plan, based on the existence of integrated delivery systems such as Kaiser Permanente (KP) and Group Health Cooperative (GHC), provided the foundation for what became the Clinton administration’s proposed health care reform plan in the early 1990s. Dr Enthoven continues to publish and speak widely on the subject of the managed competition model and the value of integrated delivery systems. Most recently, he co-edited (with Laura Tollen of KP’s Institute for Health Policy) the book, Toward a 21st Century Health System: The Contributions and Promise of Prepaid Group Practice. The following interview was conducted by Jon Stewart, The Permanente Journal’s Editor for Public Policy. The Permanente Journal (TPJ): Dr Enthoven, you’ve been advocating the notion of “managed competition” built around competing organized delivery systems for many years as the best way to promote more efficient, higher quality health care. Yet today, in the wake of the rejection of managed care, the market seems to be moving in almost the opposite direction— toward loose, unmanaged networks of providers, less-than-comprehensive coverage plans, along with soaring health care costs. What went wrong? Dr Enthoven: What went wrong was that employers panicked. In the 1990s, after the Clinton reform plan was defeated, employers tried to impose managed care, meaning HMOs, without giving employees a choice and without visibly showing them the savings to be achieved. The whole thing appeared to employees to be a loss of freedoms they previously had, and without seeing any savings personally. Research showed that the dissatisfaction with managed care was concentrated among those people who were there without a choice, which is not surprising. I think they made a terrible mistake. What employers should have done was what we do at Stanford University, where we say to employees, we’re going to offer you five plan choices reflecting different delivery systems and care models, and the university will pay for the low-priced plan and give you your choice among the alternatives, but you’ll have to pay the difference in price. In that case, the consumer is empowered and nobody is in managed care who doesn’t choose to be, because we include non-managed care options, and people reap the personal savings from choosing the managed care plan, which is typically the low-cost plan. TPJ: You’ve noted that the health care marketplace today is not very conducive to the growth of prepaid group practices (PGPs), like KP. Can you describe the kind of market that would promote PGPs and the reforms that would be needed to make that happen? Dr Enthoven: The first thing is that the markets need to be open to consumer choice. A big problem today is that most people in this country work for an employer who offers only a single carrier. TPJ: That was once a foundational principle in KP’s genetic code, was it not? A “This book should be required reading by every physician in the United States .... Doctors could learn a tremendous amount about their own medical practice and its marvelous potential by reading this book.” — Rep Jim Cooper (D-TN), in a Health Affairs review of Enthoven and Tollen’s new book on prepaid group practice.