In 1971, the Nixon Administration announced a new health strategy; the development of health maintenance organizations. “The federal government would establish planning grants and loan guarantees for HMO’s towards a goal of increasing the number of HMO’s from 30 in 1970 to 1,700 by 1976, enrolling 40 million people and 90 percent of the population by 1980”(Tufts, 1998, ¶10). HMO’s over the last two decades have expanded to become the dominant health care choice in the United States. This drastic increase over the last two decades can be attributed to a combination of two trends; both the rapidly increasing cost

s of health care and the growing dissatisfaction that patients were developing with the most popular fee for service plans in existence at the time.

So what can managed care do to stop this potential unraveling and make themselves more appealing to both employers and potential customers? According to Draper et al (2002), managed care plans have historically relied on two key strategies to enable them to offer expanded benefits with limited financial responsibility for consumers and cost containment for employers; traditional managed care technology-limited provider networks and growth of plan management to gain leverage in provider negotiations.

Some communities have seen the offering of less restrictive products to their options, which will allow for more customer flexibility. Some plans have begun to offer managed care plans that do not require a gatekeeper to direct services. Gatekeepers are usually the primary care physician chosen by the individual who is responsible for the initial appointment and the key decision maker in deciding whether a patient should referred to other providers within the network. “In Lansing, where plans say that the greatest source of member dissatisfaction is the referral requirement, several plans are moving to an electronic system that should simplify and speed up the process.”(Draper et al, 2003, ¶13)

“For much of the 20th Century, physicians in the United States practiced what Dranove called “Marcus Welby” medicine, in which general practitioners worked in individual office, and patients selected their own practit

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