Intended for healthcare professionals

Education And Debate

Managed care of chronically ill older people: the US experience

BMJ 2000; 321 doi: (Published 21 October 2000) Cite this as: BMJ 2000;321:1011
  1. Chad Boult, director (,
  2. Robert L Kane, professor in long term care and ageingb,
  3. Randall Brown, senior fellowc
  1. a Department of Family Practice and Community Health, Medical School, University of Minnesota, Minneapolis, MN 55455, USA,
  2. b Division of Health Services Research and Policy, School of Public Health, University of Minnesota,
  3. c Mathematica Policy Research, Princeton, NJ 03543-2393, USA
  1. Correspondence to: C Boult
  • Accepted 17 July 2000

The continuing debate over changes in geriatric care in the United Kingdom could be informed by some difficult lessons learnt from recent developments in the United States.1 Medicare, created by US law in 1965, is a low cost health insurance programme that is available to most Americans aged 65 or older and to some disabled younger people. Medicare is a traditional indemnity insurance plan that reimburses physicians, hospitals, and other professionals for providing Medicare beneficiaries with acute healthcare services. The coverage does not include drugs or, with few exceptions, preventive or long term care services.

Summary points

The US Medicare health maintenance organisation industry has produced evidence on the cost effectiveness of new approaches to caring for elderly people

Some innovations change how and where health care is provided; others focus on educating patients and adapting their behaviour

Economic and organisational forces mean that most Medicare health maintenance organisations are reluctant to invest in new forms of care, even where programmes seem effective

Purchasers of health care for chronically ill older people should offer capitation payments that reflect each older person's probable need for health resources in the future

Purchasers should also facilitate the collection and public distribution of data about the quality and the outcomes of the care delivered by each provider

In the mid-1980s Medicare began looking to “managed care” to help control its runaway expenditure. Under managed Medicare, an insurance company known as a health maintenance organisation accepts from the Medicare programme a fixed capitation payment for each person it enrolls, and it agrees to provide that person with at least the standard package of Medicare benefits. The amount of the capitation payment is based on the person's age, sex, income, type of residence (nursing home or independent dwelling), and geographical location. The health maintenance organisation may, at …

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