10 Questions in the U.S. Health Care Cost Debate

Have Any Policies Successfully Helped Keep Health Costs Down?
T.V. show 'Dr. Ken' is about a 'cranky but lovable HMO doctor juggling medicine and parenting,' according to ABC. Maybe his lowered reimbursement for services keeps him cranky. Danny Feld/ABC via Getty Images

With health care costs so high, it's hard to believe anything is keeping prices down. But some policies and practices have helped. Perhaps the most visible is restricting consumers' access to physicians and hospitals. This practice is most noticeable with managed care, or prepaid health plans. These plans are commonly known as HMOs (health maintenance organizations), although an HMO is just one model of a managed care plan [source: National Council on Disability].

Under the managed care model, the provider typically contracts with a single physician group to provide health services. If you elect to participate in a managed care program, your premiums are likely lower than those of non-managed care customers who can choose to see any physician they'd like. And if your locale has several managed care groups, meaning more competition, premiums can sink even lower [sources: Stanton, National Council on Disability].

Managed care, and HMOs in particular, are credited with tamping down some health care costs in the 1980s and early 1990s. In addition to limiting customers' choices, such plans also swapped out many hospital stays with care performed on an outpatient basis. And physicians who wanted to be part of the group had to agree to charge discounted rates [sources: Stanton, National Council on Disability].

But managed care doesn't always equate to lower costs. In some areas with little competition, HMOs were found to spar with their competitors by offering more benefits and services, not lowering prices [source: Stanton].