Oxford Health Plans CEO Norman Payson Addresses Mailman School Alumni and Guests on The Evolving Role of Managed Care

More than 150 alumni, students, faculty, and invited guests attended a special presentation and lecture by Oxford Health Plans, Inc. chairman and CEO Norman Payson on the evening of October 17. Hosted by Dean Allan Rosenfield and The Mailman School of Public Health, the program, entitled, "Healthcare Financing: The Evolving Role of Managed Care from the 1973 HMO Act to the Present," featured a fascinating 30-year history of managed care.

Dr. Payson identified the early 1970s as a time when doctors began to compete for patients and employers saw the need to offer an alternative healthcare option or HMO model. In the 1980s, HMOs turned to the public markets for capital, while at the same time, patients shopped for good value, solo practitioners lost patients, and HMOs and group practices realized the value of marketing in a "select me" environment. Dr. Payson categorized the early 1990s as the golden years for HMOs when national debate around the Clinton plan brought to the fore the idea of managed care and traditional indemnification insurance began to disappear from the list of healthcare options. In the mid-1990s hospitals began to establish their own HMOs, and conventional non-profit health plans lost much of their capital. According to Dr. Payson the late 1990s were the hardest days of managed care with consumer concerns at a peak and acrimony often the tone.

His snapshot of the early 2000s – an era of huge rate increases – indicated a climate where traditional indemnity coverage no longer exists and consumers increasingly bear greater financial responsibility for the cost of care.

Dr. Payson predicts that in the future managed care will maintain its competitive position by offering a more blended product or hybrid of indemnity and managed care, while the public will continue to see an escalation in costs.