06/26/2008 02:06 pm ET Updated May 25, 2011

"Care" has deserted managed care.

Managed care is a good idea gone very far astray. The reason it took a wrong turn is simple: wrong time horizon.
Health maintenance organizations (HMOs) were intended to do two good things: preserve our health and reduce medical costs. They could do both by protecting wellness, by maintaining our health. That is how they got the name "managed care organization." By managing our wellness care, in theory they would keep us healthier and spend less money on treating illness, because we wouldn't be sick in the first place.

This makes sense if you take a long-term view such as ten or twenty years. Ed Klienke had it right when he wrote that managed care was effectively "managed cost." HMOs, like all other businesses, focus on their financial bottom line. Since the average person stays less than three years in any one managed care organization (or HMO), the organization has no [financial] reason to spend money that will yield benefits (for us) beyond three years. To your current HMO, three years from now, you and I will be someone else's problem (read cost item).

A short time horizon provides no financial incentive to pay for preventative care, such as for diabetes, asthma, or heart disease. These all take a long time before they put us in hospital (read expensive). Your current HMO is betting you will be gone - in some other HMO or dead - before they have to pay for illness care. Besides, they have all sorts of ways to deny or delay payment.

Managed care organization has become an oxymoron.