Document: Managed Care
Classification: Position Paper
Date: March 2001
Status: Approved by the ASCLS House of Delegates August 2001


Health care costs in the United States continue to escalate. Between 1995 and 1999, expenditures plateaued at over $1.3 trillion and 14 percent of the United States gross domestic product, but the rate of escalation has increased again and health care spending is predicted to reach 16% of the gross domestic product by 2005.  Elected officials for all levels of government attempt to develop economic strategies to address the issues of cost and access to cost-effective quality health care.  Despite high levels of spending, over 43 million Americans (15% of the population) remain uninsured.  The health care market has moved towards managed care, which has been thought to be the method of financing health care which is most likely to control costs while maintaining quality.  Initial predictions were that managed care would account for more than 80 percent of U.S. private health insurance coverage.  By 1998, 105 million Americans (38% of the population) were enrolled in health maintenance organizations (HMOs), with significant numbers covered by preferred provider organizations (PPOs) and other forms of managed care.

Under a fee for service arrangement, consumers choose their own physicians and health care providers, follow the recommended treatment, and pay the fees determined by the providers.  If the consumer has health insurance, the fees for medical service rendered are partially or fully covered  by the insurance policy, which is customarily funded by the consumer's employer.  Under this arrangement, consumers, insurance companies, and employees have minimal influence over the fee charged, or the appropriateness or quality of care delivered.  However, if dissatisfied with their care, consumers are free to choose other providers.
Managed care systems address cost, access and quality demands through health care systems that encompass both the financing and delivery of health care services to subscribers.  Cost is customarily addressed through a capitated, per-member-per-month, fee structure.  Other reimbursement arrangements may i clude discounted fee schedules, and various contracted payment arrangements. Managed care plans usually contract with health care providers, who agree to take responsibility for the healthcare of a defined population.  The rates negotiated are based on the demographics of the population involved.  The managed care organization usually establishes practice parameters which must be followed by its participating providers. Formal programs for ongoing quality assurance and utilization review are essential components of managed care programs.

The goal of managed care is to control costs while maintaining quality.  Providers usually receive compensation as a fixed amount per program member.  There is usually a withhold program during the plan year.  If the plan and providers meet previously agreed upon clinical quality and financial goals, the withhold, or a portion thereof, are returned to the providers.  Similarly, members and/or their employers pay a fixed monthly amount to the plan, yet pay nothing or a nominal amount for each covered encounter.  Mechanisms to assure the efficiency and appropriateness of care include:  initial consultation with a primary care physician who determines which specialist, if any, needs to be consulted; early intervention in health care as a means to decrease downstream costs; utilization review to determine the quality and appropriateness of the care delivered to its members.

As populations age, the costs incurred by managed care organizations have increased and they have been forced to increase their premiums to the employers or enrollees.  The Medicare program began offering managed care options in 1997 and had predicted that many beneficiaries would choose this option.  However, after a few years of participation, a number of provider organizations have dropped their Medicare health maintenance organization (HMO) programs, finding that the capitated amounts paid by the Medicare program did not cover the costs of providing care.


ASCLS affirms the role of clinical laboratory scientists as consultants in the development of practice parameters for managed care programs.  

Clinical laboratory testing is an integral part of the delivery of health care, providing about 70% of the data used by providers to make clinical decisions.  The clinical laboratory scientist, prepared at the baccalaureate degree level, has expertise in analytical, diagnostic and therapeutic testing and in the evaluation and interpretation of test results, which must be included in the development of practice parameters.

ASCLS affirms clinical laboratory scientists' participation in patient-interactive and physician-consultative roles.

As patient advocates, the clinical laboratory scientists provide an integral role in achieving greater economies in the delivery of health care.  This may include the selection of appropriate test methods, collection of test samples in the safest and most effective manner, monitoring for duplicative testing.

ASCLS supports clinical laboratory scientists' having the authority to, with the provision of adequate clinical and demographic patient information, order initial and/or reflexive testing to achieve appropriate and cost-effective clinical laboratory test orders.  

Through standardized techniques, such as clinical decision analysis, clinical laboratory scientists may order initial and/or reflexive testing for consumers and revise inappropriately ordered tests resulting in appropriate and cost-effective clinical laboratory testing.  For compliance reasons, the decision processes used will usually require approval of ordering algorithms by a medical staff governing body.

ASCLS supports the role of the clinical laboratory scientist as a vital component of utilization review.  

Clinical laboratory scientists have the unique ability to enhance effective utilization of clinical laboratory services by providing feedback to physicians on utilization patterns, test ordering, cost effectiveness and identification of the clinical impact of irrelevant or obsolete tests.  ASCLS affirms the ethical responsibility of clinical laboratory scientists to educate physicians and consumers about the clinical relevance of clinical laboratory tests.  Clinical laboratory scientists can also provide data which shows the relationship of clinical laboratory tests to patient outcomes.  

ASCLS supports the promulgation of regulatory standards of managed care systems to protect against substandard medical care and limited access to medical care.  

ASCLS affirms the role of regulation in assuring standards in the provision of medical care.  Given the financial incentive for managed care organizations to limit the use of services and to encourage disenrollment of costly consumers, regulatory standards are needed in order to protect the public.  ASCLS has supported the provisions of Patients Rights legislation including:  meaningful point-of-service options which allow patients to seek services outside the network with a reasonable co-payment; access to care policies that do not unreasonably restrict to specialists, including specialty laboratory testing; prohibition of gag rules that result in withholding of information on treatment options; and accountability of the health plan for its decisions, especially those involving denial of treatments.