Will the Net Be the Death of Managed Care?
In "Health care" (Industry Outlook 2000, Jan. 10), you note the continuing problems that managed-care companies will have, and you then conclude that the Internet will help the companies' bottom lines by improving inefficiencies. While that may be true, in fact, the Internet will play a much larger role in the fate of managed-care companies: It will bury them.
Patients, their families, and physicians will unite and use the massive information available on the Internet to demand the best treatment, irrespective of cost and no matter whether that physician and hospital is "in the plan."
Human resources departments will be inundated with demands for more choice in health plans. Eventually, America's large corporations will shift their health plans from a defined-benefit plan to a defined-contribution plan, just as with their pension schemes. The workers and their families will then be given X dollars with which to purchase health insurance, and it won't be managed care.
When the autopsy on managed care is completed, the cause of death will be listed as "the Internet."
Leon Reinstein, M.D.
BUSINESS WEEK is on target in looking to e-health applications to improve health care. In the past year, I have spent much time with hospitals, doctors, and HMOs, and I did not find one that encouraged using e-mail to facilitate low-cost delivery and improved quality. The industry has a huge overhead in outmoded financial systems to serve an archaic structure, which is still based on handwritten patient charts that are virtually impossible to share among fragmented service providers. (I found the most reliable way of distributing chart information among service providers, even in the same HMO, was to carry my own copy.)
These data systems were designed by and for traditional management looking to squeeze savings from unit costs and bill handling. They have nothing to do with delivering better services through information management, which is what the Internet era is all about. The Internet payoff is still ahead, but the good news is that the potential to rescue an industry drowning in inefficiencies is unprecedented.
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It May Be GE's Turn to Get Squeezed
"Welch's march to the South" (The Workplace, Dec. 6) gets the facts right about General Electric Co. and its chairman, Jack Welch. Unfortunately, the story also performed a hatchet job against the Coordinated Bargaining Committee (CBC) of GE Unions, which represents 47,000 hardworking Americans.
First, it accurately exposed the supplier outrage at the company--one that will generate more than $10 billion in profit during 1999 but that nevertheless forces its U.S. suppliers to move their operations to Mexico so GE can "squeeze the lemon" even more.
However, author Aaron Bernstein was totally inaccurate when he said that I viewed the recent settlement with GE in Louisville "as a solution" to GE's outsourcing of our union members' jobs. What I said was that when we won agreement from GE to invest $200 million in our Louisville plant, it showed that General Electric can invest in good jobs here in the U.S. and can bargain in good faith with unions about investing in union jobs instead of just closing plants.
More important, Bernstein misrepresented the most unified and aggressive contract campaign waged by our 14 CBC unions and the AFL-CIO in the past 30 years. To dismiss the enormous resources of our 14-union coalition in challenging the wealthiest corporation in the world by calling my union "nearly bankrupt" and the campaign's war chest "paltry" is to stand facts on their head.
GE's short-term "profit before people" philosophy is the lemon that needs to be squeezed. In our negotiations with GE this summer, our unified coalition intends to do the squeezing.
International Union of
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