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Article
June 1997

Invited Commentary

Author Affiliations

Santa Monica, Calif

Arch Surg. 1997;132(6):585. doi:10.1001/archsurg.1997.01430300027004

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Abstract

Danto's commentary is a thought-provoking evaluation of the most egregious faults of "managed care 1997." Because the great health care debate is still with us, it is imperative that we all fully understand the forces that have brought us to our current position. Government's critically important role must be understood. Most, if not all, of the "Realities" discussed are the direct result of government actions and policies instituted to reduce the cost of government health programs, while shifting responsibility for the actual reduction of these costs to others.

The diagnosis-related groups system established the principle of paying for "average" costs rather than actual costs. This variant of capitation rewards the provision of fewer services. Next, government subsidized the formation of for-profit HMOs. They are paid a capitated rate, and they extend this payment scheme to captive physicians. Once the HMO owned the patient and could contract his care to the

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