True or False? Managed care increased the rate of growth in health spending between 1993 and 2000.
The correct answer and explanation is:
The correct answer is False.
Managed care was implemented as a strategy to control and reduce the rate of growth in health spending. Between 1993 and 2000, health spending in the United States did indeed experience an increase, but this was largely due to factors other than managed care. Managed care systems, which include Health Maintenance Organizations (HMOs) and Preferred Provider Organizations (PPOs), were designed to create cost-efficiency by managing how health care services are provided, controlling hospital stays, negotiating fees with providers, and emphasizing preventative care.
In the 1990s, these strategies showed some effectiveness in slowing down the rate of growth in health care expenditures. For example, managed care helped reduce the overuse of services, minimize unnecessary hospital admissions, and negotiate lower prices for medical services. The expansion of managed care helped moderate the pace of health spending in comparison to earlier years, where health care costs were rising more rapidly.
However, the period from 1993 to 2000 also saw growth in the health care sector driven by factors like the introduction of new, expensive medical technologies, an aging population, and rising prescription drug costs. Furthermore, the managed care model faced challenges, including backlash from consumers who felt that it limited their choices of providers and medical care. This resistance, alongside the complexities of managing care, led to some of the cost-saving measures losing effectiveness by the end of the decade.
Thus, while managed care was a factor in reducing growth in health care spending, it did not lead to an increase in spending during this period. The answer to this question is false.