Central Map ..... Initial Map ..... USA Map ..... Australian Map ..... International Map ..... Corporate Practices Map..... (to print)
   Home Page .......... US Corporate page ........... Entry Man Care
Managed Care
Man Care I ..... Man Care II ..... Man Care III

The many extracts on this page are from copyright material. They are reproduced here for educational purposes and to stimulate public debate about the provision of health and aged care. I consider this to be "fair use" in the common interest and for the common good. They should not be reproduced for commercial purposes. The material is selective and I have not included denials and explanations. I am not claiming that all of the allegations are true. The intention is to show the general thrust of corporate practices as well as the nature and extent of the allegations of dysfunctional conduct made.

Managed Care Part III

Globalisation of Managed Care

"The rule is that if you don't know who the bully in the global economy is, you're the bully. As the US financiers look down upon the world with malignant self-certainty, they ought to keep this in mind" The Industrialised World bows to the US financier By Michael Lewis (Bloomberg News) in The Star (South Africa) May 18, 1998




It is my understanding that there are persons who believe that public funding and private delivery systems will provide improvements in access, efficiency and revenue. This belief assumes that there is a sufficient enough separation between funding and delivery of health care, and that as long as the funding remains public, then privatized delivery can occur without affecting public values, such as universality, accessibility and comprehensiveness. Privatized, market-based delivery systems and their management have been shown to result in just the opposite: fragmentation, inequity and inadequacy of care.
It should not come as a surprise that the U.S. market and other sources of privatization looks hungrily at countries with public funding. This type of funding represents a steady, lucrative supply of dollars to go into the funnel, and to the degree that these dollars are "managed" in transit, for-profit companies stand to make the kind of windfall profits that represented the early profits obtained in this country.
It should be clear that the savings and profits from for-profit delivery and managed care companies will be obtained and maintained at the expense-money and human-of the government, communities, families and individuals.
As the health care business in the U.S. faces decreases in profits and saturation of its markets, it will proceed as other businesses, and search for new markets outside of the U.S. Like the U.S. tobacco industry, the health care business will offset the costs of its national restraints and regulation with increased perpetuation of its deadly deeds in more vulnerable populations-the less sophisticated, less empowered, less protected overseas patients.
Presentation to the Romanow Commission on the Future of Health Care in Canada by Linda Peeno, MD Louisville, Kentucky USA May 31, 2002 (This is an outstanding review of corporate for profit medicine concentrating on managed care but the basic insights are applicable to all market controlled for profit care. Dr Peeno writes from the heart of the corporate system of which she has vast experience. The full presentation is well worth reading )

By the end of 1997 Australian citizens had seen off Tenet healthcare and Columbia/HCA. Sun Healthcare had been brought into the country through subterfuge and HealthSouth had established a footing in Melbourne. The government was pressuring doctors into managed care type contracts and the public were totally confused by the mudslinging between the minister and the AMA. We were all worried that the US HMOs would be next on the list. A flurry of activity to export US HMOs across the world was like a red rag to a bull and I circulated material and was particularly scathing about this.

A lot of know how and technological experience is of course available from the USA. Some of this is very useful. The difficulty for other countries is and has been that these useful factors are closely linked to a US corporate ideology. Those advising have no doubts about the validity of this ideology so that they do not see alternate points of view. Their interest in advising and assisting is not in helping to improve the system or care as much as making profits for their businesses. When competitive pressures increase the latter always gets precedence. Government sees competition as the solution to health care's problems. As Ron Williams indicated in 1992 in his book "Remission Impossible" the multinational megacorps will not come if they cannot impose their profit generating systems of care.

In addition to this most developing countries have economists and businessmen who have trained in US or European universities. They hold positions of influence. They would have been supportive of economic models like this.

My interest extended over 1997 and 1998 and once the threat of managed care in Australia subsided I moved on. As a consequence I have not followed this up to see what has happened in all these countries. This web page simply fills a gap in the story of corporate behaviout and I do not have the time or will to explore developments in all these countries. I have instead selected a number of extracts from that earlier period. They illuminate what happened and I have arranged them under rough headings and then in date order. Some of them go wider than managed care. Mostly they are about financial opportunities and not about service to the community.

My impression is that international managed care has not proved the bonanza which was originally envisioned but I do not have the information. Perhaps countries have taken what they needed and discarded the rest. Those interested will have to follow this up themselves.



Factors driving international expansion in the USA


As we have seen elsewhere the health care share market is a growth market. Stockholders make their profits from growth rather than dividend. To remain viable companies had to grow. By 1996 most employees of larger companies in the USA were enrolled in HMOs and there was little room for increasing membership.

While mergers and takeovers were proceeding apace it was clear that consolidation would soon leave only a few megacorps in the business. Competitive pressures were driving down the profits needed to service large loans. There was a growing tide of negative opinion because of the disturbing practices used by HMOs to generate profits. As has happened in other sectors of health care the solution was to expand internationally. Sometimes this was a real intention. In others it was simply a convenient sop to angry shareholders to stop them selling stock.

The true believers in managed care developed a set of understandings to justify what they were doing, disregarded the problems in the USA, explained away contradictions and lied about what they are offering. In some quarters there was wild enthusiasm. Dissenting arguments are not found in business reporting.

That economic theorists in other countries were enthused by the ideas and that politicians were vulnerable to con men and were readily sucked in was seized on by foreign countries. They identified this as a need for US managed care practices. They saw it as a commercial opportunity. Soon a whole new business developed. International health care advisers made their money by advising and facilitating international expansion. They fuelled the enthusiasm as this was how they made money.

It is important to understand that what the extracts are primarily about is the ability to make profits from the sick citizens of another country. A system originally designed to help poor US citizens had become a system for taking profits from the rich in foreign countries. Health care, once a humanitarian service to those in need had become a commercial opportunity and no one with power challenged this. What is happening is driven by the commercial needs of corporate America and not the needs of sick citizens in other countries. To gloss over these contradictions and build a set of ideas which they could embrace and identify with a number of closed minded strategies including compartmentalisation and rationalisation are used. Some even became wildly enthusiastic. I am arguing that in human affairs the situation comes first and that the ideas we use to build successful and socially rewarded lives ideas develop in response to the situation. The rest follows on from this.

U.S. managed-care companies are dipping their toes in overseas markets. While the nature of their international deals may differ, a handful of the country's more established HMOs have been laying the groundwork to go global.
Certain conditions at home and abroad have brought U.S. HMOs to the brink of international expansion.

At home, pools of potential enrollees in major metropolitan areas have begun to dry up.
By contrast, U.S. HMOs have less than 5% of the market share of a population of some 470 million in Canada, the European Union and Mexico combined, Lewis pointed out. And these consumers are looking for more healthcare options while their governments are scoping new ways to control rising healthcare costs.
Mickey Herbert, president of Trumbull, Conn.-based Physicians Health Services and incoming chairman of the AAHP, noted the opportunity during his remarks at the association's annual meeting in New Orleans last week.

"Other countries are crying out for help from our health plans,'' he said. "American companies have to skate to where the puck is going to be.''

In recognition of the growing interest, the AAHP will co-sponsor with the international academy the first ``Managed Care Leadership Summit on International Healthcare Trends'' in Mexico City this September. Representatives from countries as far-ranging as Brazil, Israel, Korea, the Netherlands and Venezuela are scheduled to attend.
"Companies should go in early so that they're not left with the less desirable partners,'' he advised.
"We've been asked to come in and help them develop plans to introduce certain managed-care techniques,'' Hoffman said. "Contracting and licensing our services are constructive ways to market our technologies and techniques.''
"These consulting arrangements are generally viewed as part of a larger vision to get connected with the community and learn about the market,'' Lewis said.
International healthcare: U.S. HMOs to go global via overseas Modern Healthcare International June 24, 1996

With most U.S. hospitals already in the fold of one or more purchasing organizations, market-share growth here has become a zero-sum game, where one group's customer gains come at another's expense.
"One of the best-kept secrets in the purchasing industry today is the amount of time and energy going into international efforts."

As for-profit managed-care plans expand in the United States, the rate of profit begins to fall and the market becomes increasingly saturated. - - - - - "By the year 2000, it is estimated [that] 80% of the total U.S. population will be insured by some sort of MCO [managed-care organization]. Since 70% of all American MCOs are for-profit enterprises, new markets are needed to sustain growth and return on investment." The Exportation of Managed Care to Latin America by Karen Stocker, Howard Waitzkin, Celia Iriart The New England Journal of Medicine -- April 8, 1999

Specific domestic conditions are pushing the U.S. managed-care sector to find new foreign markets. At home the market is saturated, HMOs are demonized and clinical judgments are politicized.

Managed care in some form covers 90% of all U.S. insured workers, 15% of Medicare recipients and 40% of Medicaid beneficiaries. Even though we shouldn't rule out the possibility of continued growth across the entire industry, the current market fundamentals do not augur well.
U.S. managed-care companies have every reason to look overseas for new and more stable and profitable markets. Just as they evolved from regional and neighborhood centers to serve statewide and national clients and consumers, the managed-care plans of the 21st century will have to be able to service the globe.
The universal solution: Nations worldwide are turning to managed care by Jonathan Lewis president of the Academy for International Health Studies. Modern Healthcare International April 24, 2000

Allyson Pollock
Now you have to understand where the US is in this. Its health maintenance organisations, its health care industry is in financial crisis. It can’t squeeze any more out of its government, nor can it squeeze any more out of its employers. Its million-dollar profits turned into nearly a billion dollar losses last year. The major long-term care health chains are now in voluntary liquidation as are many of the HMOs, and the government’s having to bail them out. They are now desperate for new markets and new sources of profit, and for the US the export of the managed care model, the HMO is foreign policy. So you have to understand where some of these influences are coming from; they’re coming from the desperate search for new markets to keep the economic stability of vibrancy of say the US and Europe, and the US and Europe are partners in crime in this, in that they’re both competing for the same markets.
The World Trade Organisation And Health Care Systems ABC Radio Broadcast Monday 26 March 2001 with Norman Swan


Pressure from world bodies

The USA claims that countries have welcomed managed care and asked for help and advice. It may be that much of this is a response to coercion from international financial institutions including the World Bank, and trade agreement such as those at the WTO.

These organisations, founded to assist developing nations favour privatisation and multinational corporate involvement. They do not distinguish between health care and other commercial ventures. They make privatisation a condition for multinational assistance and promote introduction of managed care in health. Multinationals are not entering these countries to serve the community. They are going for the money. One wonders what sort of health service they will get.

IFC, with $33 billion invested in more than 100 countries, is the world's largest source of funds for the private sector in emerging markets. It is one of a number of the World Bank's member groups.

So far, IFC has invested about $200 million in healthcare, but it's expecting to increase that amount "substantially" in the next few years, says Robert Taylor, president of Taylor Associates International. "They haven't been active in that sector until now," he says.

The Health Coalition obtained a legal opinion from University of Manitoba Law Professor Bryan Schwartz which confirmed that the protections for health care services under NAFTA (North American Free Trade Agreement) are ambiguous at best and rife with gray areas.
Ethical reflections on the MAI Ecumenical Coalition for Economic Justice :: Economic Justice Report March, 1998

Since the mid-1990s, U.S. managed-care organizations and investment funds have rapidly entered the Latin American market. The exportation of managed care has been linked to privatization and cutbacks in public-sector services; international lending agencies such as the World Bank and the International Monetary Fund usually will not make additional loans unless these cutbacks have been made. Although privatization does not necessarily lead to the introduction of managed care, the two often occur together and involve the participation of U.S. insurance companies and other multinational corporations.
Economic globalization has also facilitated multinational investment in managed care. Previous trade barriers have been removed through such treaties as the General Agreement on Tariffs and Trade, the North American Free Trade Agreement, and the Common Market of the South (which covers the southern cone of South America). Multinational corporations have sought managed-care programs for their employees based abroad. For example, corporations with operations in Mexico City, including IBM, Johnson & Johnson, Bristol-Myers Squibb, and Hewlett-Packard, have formed a consortium to promote the development of managed-care programs.
The World Bank and other multilateral lending agencies favor the privatization of public services and the entry of managed-care corporations into Latin American markets. Policies for "structural adjustment," as defined by these agencies, require privatization, reduced public-sector expenditures, and the repayment of prior loans.
In the widely debated 1993 World Development Report, entitled "Investing in Health," the World Bank argued that inefficiencies of public-sector programs hindered the delivery of services as well as the reduction in poverty. The report advocated incentives for the purchase of private insurance, privatization of public services, promotion of market competition, and emphasis on primary care and
prevention. Through this document and subsequent policies, according to critics in Latin America, the World Bank has promulgated an ideology that "health is a private matter and health care a private good." Specifically, the World Bank has supported managed-care initiatives that convert public health care institutions and social-security funds to private management, private ownership, or both. These initiatives entail new loans and thus increased foreign debt for participating countries. Access to capital in public-sector social-security funds has become an important incentive for investment by multinational corporations.

Other multilateral lending agencies have participated in the same reform strategies. The Inter-American Development Bank offers lines of credit to be used for implementing changes in organizational structure and physical plant consistent with privatization. In Argentina, the bank has collaborated with the World Bank in supporting the conversion of public hospitals to "hospitals of self-management" (hospitales de auto-gestion), in which managed-care principles require the hospitals to compete with private hospitals in the market for patients covered under social-security programs. The support of public hospital reform in Colombia has proceeded along similar lines.

The International Monetary Fund makes its new loans conditional on macroeconomic indicators of public-sector cutbacks, privatization, and the introduction of managed care, partly to reduce public expenditures and national budget deficits. The pressure exerted by the International Monetary Fund encourages the private management of services and social-security funds that were previously managed in the public sector. The Exportation of Managed Care to Latin America by Karen Stocker, Howard Waitzkin, Celia Iriart The New England Journal of Medicine -- April 8, 1999

The World Trade Organisation (WTO) is drawing up regulatory proposals which could force governments to open up their public services to foreign investors and markets. As part of the General Agreement on Trade in Services (GATS) negotiations, the WTO working party on reform of domestic regulation is developing a regulatory reform agenda which could mark a new era of compulsion in international trade law.
The domestic policies of national governments will be subject to WTO rules, and if declared illegal, could lead to trade sanctions under the WTO disputes panel process. The USA and European Union, with the backing of their own multinational corporations, believe that these new powers will advantage their own economies. Health-care professionals and public-health activists must ensure that this secretive regulatory reform process is opened up for public debate.
But behind the scenes, the WTO, with the support of the USA and international trade organisations, continues to develop an agenda aimed at opening all public services to trade and foreign investment.
It is difficult to see how health services are exempt under this part of the Treaty, since in most countries health services involve both competition and commercial provision.
Globalisation, according to a UK House of Lords select committee, is effectively about "reducing the power of individual governments in the face of multinational corporations whose annual turnover may exceed the GNP of many WTO member countries". If this is true, WTO regulatory reform proposals are a pure case of globalisation.

Most European health-care systems guarantee access to health care as a universal right. Because of this, health care is funded either through general taxation or social insurance with the role of for-profit firms severely limited or banned altogether. To extend rights of access for private firms, the WTO, with the backing of powerful trading blocs, multinational corporations, and US and European governments, is attempting to use regulatory reform to challenge limitations on private-sector involvement. But this amounts to a challenge to the principles that lie at the heart of social welfare systems in Europe. The new criteria proposed at the WTO threaten some of the key mechanisms that allow governments to guarantee health care for their populations by requiring governments to demonstrate that their pursuit of social policy goals are least restrictive and least costly to trade. Rewriting the regulations: how the World Trade Organisation could accelerate privatisation in health-care systems Allyson M Pollock, David Price Lancet 2000; 356: 1995-2000

Norman Swan:
Medicare, the way we regulate the introduction of new medications and the PBS which sets prices for subsidised drugs, could be seriously under threat if negotiations just started at the World Trade Organisation go the way of large private sector interests.

Under the banner of free trade, US managed care organisations could find it a lot easier to gain access to the Australian healthcare market, and perhaps even force the dismantling of some publicly funded services.

These are the allegations being made by a British group of health policy analysts.

Allyson Pollock:
One of the problems is that manufacturing has declined because of international competition. The big US and European corporations have had to look at services and an alternative source of profit, and by services I mean everything from health and education to transport and prisons. So this is the new profitable sector that they’re targeting. And if you think about it, on average most countries in the Western world are spending anything between 8% and 13% of their GDP on their health and perhaps the same on education. So of course this has been considered the great unopened oyster for the corporations, and that’s exactly their rationale, is that they’re now targeting the funds that governments were once spending on public services and they see this as a very important source of profits.
Yes, they want to open up what we have traditionally considered as public services to trade, that’s their remit, the liberalisation as it’s called, or the opening to trade of what has been traditionally the remit of governments and under the control of government. So really they’re looking for opportunities to expand into health care and education which have normally been under the control of government. And the reason for that is of course they’re targeting the money that government currently spends on these services.
Well there are two things. I mean the US is of the view that commercial opportunities exist across the whole spectrum of health and social care, everything, hospitals, out-patients, clinics, nursing homes. And then the second problem for them is how are they going to target these services. So then what they have to do is redesign the trade treaties, redesign the rules so that they have openings into what has traditionally has been public services under the control of national governments. So what they want to do is remove the control that national governments have over their own services in order to create the openings for the corporations.
No indeed, and in fact there’s now debate as to whether countries should be offering universal health care services, at best they can find new mechanisms. But in fact the overall position is that nothing should obstruct trade, that public health will be subsumed to trade, and one of the best examples of that is in the asbestos dispute that the WTO disputes panel heard where France banned asbestos products in public health grounds, but Canada complained that the ban discriminated against their goods and the disputes panel supported Canada’s interpretation, ruling that goods cannot be discriminated against on the grounds of health risk. It wasn’t appropriate to apply a health risk. So there you saw the trade organisations using their own definitions to promote the interests of trade rather than public health, and that’s one of the problems, that the trade organisation will be applying this thing called the necessity test, it won’t be applied by outside bodies.
The World Trade Organisation And Health Care Systems ABC Radio Broadcast Monday 26 March 2001 with Norman Swan (Interview with Allyson Pollock - extracts)


The international marketplace

In this section I have put articles which illustrate the thinking and practices at the time. The fact that managed care and its practice of putting profit before care is in contravention of the Hippocratic oath does not stop anyone from advocating managed care or inducing them to debate the issue seriously. I found only one mention of this.

Cigna offers a panoply of products-from indemnity health insurance through PPOs, point-of-service plans, HMOs, mental health and workers' compensation services-that other companies are scrambling to acquire through mergers and acquisitions. Cigna also has a large, profitable international property and casualty operation-a platform that is the envy of HMOs wishing to move overseas. It has small but growing managed-care operations in several European countries. QUIET GIANT: AMONG MANAGED-CARE PLANS, CIGNA HEALTHCARE IS THE BIGGEST AND MOST-OFTEN OVERLOOKED Modern Healthcare March 10, 1997

Modern Healthcare's editor describes the reason for writing about international opportunities and difficulties.

Many of our clients are now active internationally. They sell all kinds of medical equipment, pharmaceuticals and other healthcare products to a variety of customers around the world. They have urged us to take a more active role internationally for some time now.

In this issue, we touch on subjects such as managed care's growing influence internationally, private healthcare investment opportunities in the developing world, a U.S. company that just opened the first foreign-run hospital in China, and expatriate U.S. healthcare executives who share the highlights and pitfalls of working abroad.

We hope to cover the international healthcare market in even greater depth in the future in order to give you, the reader, the best product possible.
MHI: PUBLISHER'S LETTER Modern healthcare Nov. 3, 1997

Like it or not, managed care is taking root across the globe.

As more and more governments move to control costs and privatize wasteful healthcare delivery systems, and as a rising middle class becomes willing to pay for quality medical treatment, U.S. managed-care expertise is in demand around the world.
But a number of U.S. health maintenance organizations and executives are actively seeking out opportunities, and some already have set up or acquired significant insurance operations in other countries.
"There are many North American healthcare companies evaluating the market. There's not a week that goes by I'm not entertaining someone from the states trying to enter the market," Cuny says.
Michael Tremblay, a health insurance consultant based in the United Kingdom, moderated a recent conference in Washington on exporting managed care to Europe. He urged those at the conference, organized by International Business Communications, to "think big."
Governments tend to go to academics for advice, he says, but businesses can help governments learn new ways of delivering healthcare efficiently. "It's a high-risk, high-reward business, and there's less competition" than for smaller projects, he says.

For example, Tremblay believes there are "opportunities galore" for
companies with occupational health expertise since there are few programs in Europe for getting injured workers back to work quickly.
The publication reports there is a debate going on in South Africa about whether the profit motives of managed care are compatible with the Hippocratic oath. It's a debate, no doubt, that will rage on for years.
MHI: THE NEW WORLD OF MANAGED CARE Modern Healthcare Nov. 3, 1997

The creation of a misleading image by word play is a common practice. The fraud ridden National Medical Enterprises (NME) with its integrity in tatters changed its name to Tenet Healthcare because the name reflected values it wanted others to associate with it. The next extract is another example. HealthReform Partners claims to be about improving clinical outcomes. It is not about health care but about money. It is an investment manager. Market based reform of health care is the latest buzz word around the world and it jumps on to the band wagon.

"It's a $2.5 trillion (market) at least," says the president of HealthReform Partners, a New York-based investment manager with $50 million under management.

What HealthReform Partners has discovered is no big secret, really. The firm simply invests in companies whose products and services have global implications for containing healthcare costs or improving clinical outcomes. "We're investing in a trend rather than an industry," Talbot says.
Talbot contends HealthReform Partners is "the only investment group looking at the cross-sectors of healthcare reform." He may be right.
Talbot also sees abundant global opportunities in healthcare delivery. He says Europe today is like the U.S. in 1992 when healthcare costs were running amok, and it's only a matter of time before Europeans begin adopting strategies that helped America put the brakes on healthcare inflation.

The U.S. agency has established an outreach division that's consulting and advising healthcare organizations in central Asia, eastern Europe, Japan Saudi Arabia, Spain and about 30 countries altogether. Even the United Kingdom, which has a variety of accreditation choices, has looked at JCAHO standards and modified them to suit the National Health Service.
Tina Cleland, USAID's director for healthcare reform activities in central and eastern Europe and the former Soviet bloc countries, says there's a lot of interest in "getting the U.S. healthcare industry to go global. Until things stabilize in the health sectors, there isn't much interest by U.S. investors in going over there."

Note that the Michael Ford in the article below was the same Michael Ford who was the subject of un-confronted allegations of trading in patients when he worked for NME in Singapore. He was also a participant in what New South Wales Health Department describes as a lack of frankness and candour in Australia in 1993.

The report, titled "Private Hospital Investment Opportunities," profiles 30 developing countries believed to have potential for private healthcare investment. It finds many with growing middle and upper classes willing to spend money for high-quality private healthcare.
"Private entrepreneurs and investors, in healthcare as in other sectors, are the first to respond to indications of growing demand," the report says, "and throughout the developing world there are signs of increasing investor activity in the health sector."
In the face of this potential, U.S. investors may be ready to put their money into international healthcare ventures.

"I think you're about to find some aggressive new behavior," Taylor says.

Chase Capital Partners, the investment branch of Chase Manhattan Bank, is backing a venture known as Vista Health Care, which is based in Singapore and plans to invest in healthcare projects.

Chase's initial investment is $2 million, "but there is no limitation of funds from Chase," says Michael Ford, who works as a consultant for Vista and Chase.

Ford, 55, is the former president of Tenet Healthcare Corp.'s international division. He had 17 years of experience in international healthcare with Santa Barbara, Calif.-based Tenet and its predecessor, National Medical Enterprises. He joined Vista earlier this year.

"If there is a capital call for an acquisition or a start-up, Chase will come up with the capital for it," Ford says.
The Tenet executives who made up the international division now work for Vista and remain bullish on emerging markets. They say Tenet's decision to sell most of its international operations had more to do with the company's domestic focus than a lack of enthusiasm for foreign markets.
The report also sees promising investment opportunities besides hospitals in certain countries. Those opportunities include diagnostic radiology centers, outpatient surgery, managed care and other insurance plans, home healthcare and hospital renovation.

For now the European market is soft, and economies are bending under the strain of government single-payer healthcare systems, Trafton said, adding that those systems will have to find "something akin to managed care" to get costs and operations under control. BRITISH INVASION: HBO & CO. BUYS TWO BUSINESSES OPERATING IN U.K. Modern Healthcare Nov. 10, 1997

In the USA involving doctors in corporate businesses so that they profit by their own referrals when using corporate facilities has been a major problem. It is really a form of kickback and is mostly illegal. That other countries do not have laws prohibiting these practices is seen as an opportunity to set up such arrangements.

Physician entrepreneurs are taking steps to sell their expertise in less competitive markets abroad.

The Midwest Center for Day Surgery, a joint venture that's 51% owned by physicians and 49% owned by Advocate Health Care, has partnered with Gemini Consulting Group to help the group's United Kingdom subsidiary set up surgery centers with local specialists as equity owners.
The U.K. facilities will be owned by local specialists-called consultants-in partnership with Surgicenters U.K., which is owned by a Gemini subsidiary in the U.K. Gemini is based in Oak Brook, Ill.
Since "prohibitions doctors face in the states (against self-referrals) are unlikely in the U.K.," primary-care doctors in the U.K.-called GP fundholders-also could buy equity in the surgery centers, McCarthy said.
SVI will funnel expertise and management assistance from the Midwest Center and Gemini to the U.K. surgery centers and to physicians, hospitals and health systems in the U.S. and abroad that want to set up ambulatory surgical centers.
He made his remarks during an International Business Communications conference, "Exporting Managed Care to Europe," recently held in Washington.
"Surgery centers are one of the last legal investments for doctors," Ladniak said. Midwest Center, which opened in 1985, will gross over $8 million in revenues this year. It has been very profitable for its shareholder physicians, who sought to supplement their income as managed care squeezed their rates, Ladniak said.

Without a doubt, however, the skills developed by America's best HMOs would be useful overseas. In Britain, a version of managed care is practised, if anything, even more cost-effectively than in America, but American HMOs could still offer tips on how to use information technology better. More generally, national health-care systems everywhere are under financial strain--above all in the third world. As populations age and chronic ailments such as heart disease and cancer take a heavier toll, governments there face demands for expensive treatment from a growing middle class. Managed care could help.
For help in dealing with foreign regulators and medical practice, American firms tend either to buy up or form joint ventures with local health care providers or insurers--as Cigna did with Brazil's Golden Cross in 1997. Partners are quite plentiful. Homegrown alliances of insurers, hospitals and doctors already prosper in Latin America and south-east Asia. The Philippines has had private for-profit managed care since the late 1970s. Over 10% of Brazil's population is covered by almost 700 local HMOs. Tie-ups with Americans are often attractive, because they bring their computer skills and their huge databases, which help analyse which treatments work best under various circumstances. The habit of measuring "medical outcomes" is rare outside the West, which is why Kaiser Permanente International is taking its time setting up comprehensive patient databases in its first managed care project in Shanghai.
Medicine for export The Economist March 7, 1998, U.S. Edition

MANAGED care is inevitably marching its way into the New Zealand health care system to the beat of Bill English's drum.
Health shifts to managed care The Sunday Star-Times (Auckland) March 29, 1998

Large US health care corporations, including insurance companies and health care management organizations, are already making their way into the Canadian market and looking for opportunities to expand.
Ethical reflections on the MAI Ecumenical Coalition for Economic Justice :: Economic Justice Report March, 1998

Lewis organizes two such missions for senior executives of U.S. healthcare companies each year and produces the annual Summit on International Managed Care Trends, which will be held Dec. 9-12 in Miami Beach, Fla. Lewis, 49, former executive director of the California Association of Health Maintenance Organizations, founded the Davis, Calif.-based academy in 1993.

The March 18-26 trip to South Africa included sessions with leading providers, insurers, economists, investors and government officials in Johannesburg and Cape Town.

In a pattern familiar to U.S. healthcare providers, a number of foreign governments are trying to crack down on fraud -- and they are considering U.S.-style corporate compliance programs as a way to help.
"But most people who are knowledgeable about these things think many of the challenges of the future are in foreign countries," Yuspeh says.

There is no doubt that foreign markets offer huge opportunities to many sectors of the healthcare industry. According to U.S. government estimates, healthcare spending will top $3 trillion by 2000 in the world's developed countries.
One thing spurring countries to change is a move toward American-style healthcare reimbursement systems. According to a recent study, a half-dozen countries are looking at some form of reimbursement similar to diagnosis-related groups in the U.S.

Managed care has marched into Europe as more nations rethink their government-sponsored universal coverage.

To improve quality and cut costs, European health plans, often called health funds, are studying and adopting aspects of American-style managed care.
Managed care has American roots going back to the Great Depression, but it's new in Europe. In France, the first PPO was formed in 1995; in Poland, the first managed-care organization was launched this year; and in Germany, health reforms in 1997 permitted pilot projects to use some aspects of managed care, such as physician contracting.
The academy and the Washington-based American Association of Health Plans co-sponsor the Summit on International Managed Care Trends. This year, the summit will be held in Miami Beach, Fla., in December.

Many U.S. managed-care organizations-such as Aetna U.S. Healthcare, Cigna HealthCare, Health Partners, Humana, Kaiser Permanente International and United HealthCare Corp.-are trying to spread their business globally.
MANAGED CARE POISED TO TAKE EUROPE Modern Healthcare Nov. 2, 1998

It is interesting that Kaiser, a not for profit HMO was initially at the forefront looking at international expansion - including Australia. By 1998 it was backing away.

It was never clear that Kaiser's ambitions were quite as grandiose as the CNA portrayed. But today, any dreams Kaiser may have had of cloning itself abroad are on hold.

The 9.2-million-enrollee domestic health plan appears to be downsizing expectations for its 2-year-old Kaiser Permanente International unit, formally launched in October 1996

Kaiser officials say the unit was a direct response to requests from foreign countries and companies for advice on managed care. There are no immediate plans to establish Kaiser health plans, Kaiser hospitals or Kaiser medical group alliances abroad, they say.

"The goal is to be a global presence" in the next decade or two, says Joyce Berger, the international unit's managing director, "but we're not setting up global Kaisers."

For the future, governments throughout the EU seem increasingly willing to allow responsibility for long-term care and rehabilitation to rest with the private sector. The market share of private nursing and residential care homes accounts for a significant portion of the total market in Germany, the UK and the Netherlands. In the UK, for example, the private sector accounts for 56% of the beds in 17,800 residential care homes.
As hospitals are encouraged to divert primary care back to the community, the private sector can hope to benefit from working both in partnership and in competition with the public sector. For example in the UK, drop-in medical centres-called Medicenters-have been developed by Sinclair Montrose Healthcare. They offer a convenient alternative to consultation with local GPs and have proved popular among shoppers and commuters in the supermarkets and railway stations where they are located. The company is reported to have made a good return on its investment.
Healthcare Europe 3rd quarter, 1999 Ch 8-Health trends: A time for growth The state of private healthcare today- The Economist Intelligence Unit <> Nov 1999

Market-oriented systems have encouraged the introduction of more businesslike techniques, such as the tools of managed care. Private-sector insurers and providers can expect to benefit from the decentralisation of healthcare provision by bringing management expertise and know-how to the sector.
Healthcare Europe 3rd quarter, 1999 Ch 8-Health trends: Three reasons why - The impact of health reforms The state of private healthcare today- The Economist Intelligence Unit <> Nov 1999

Aetna also said it would sell some of its overseas health care units and use the money to reduce debt and buy back stock later this year. Aetna wants to placate worried investors who have driven its stock price down, - - -.
Aetna Fends Off a Takeover Offer and Plans a Split New York Times: March 13, 2000

It is interesting that countries who have problems financing health care turn to the country with the most expensive, the most complex, the most inequitable and probably the most inefficient system in the world for help. The evidence is there and this speaks for the power of credibility and marketing.

Managed care is going global. People all over the world are expressing interest in the tools and techniques of managed care--both its American and non-American versions--to help control costs and
maintain clinical quality.
In places like Egypt, Europe, Israel, Latin America, Malaysia and the Philippines, vibrant managed-care sectors have taken root. In some locales American managed-care companies are partnering with, merging with or acquiring indigenous organizations. A few courageous health plans are even testing the feasibility of exporting their unique experiences in healthcare delivery and finance to the U.S.
The universal solution: Nations worldwide are turning to managed care by Jonathan Lewis president of the Academy for International Health Studies. Modern Healthcare International April 24, 2000




It was not all plain sailing and a number of articles cautioned against simply transplanting US Healthcare to foreign countries. Some had experienced diffculty. It was seen as potentially lucrative but high risk.

U.S. healthcare executives and managers planning to get involved in international ventures had best keep one thought in mind: There's no place like home.

"The most important thing for Americans to understand is, especially in healthcare, our unique system grew up in a very American environment, an environment that is not replicated anywhere else with the exception of white South Africa."

So believes Susan Cheney, a veteran of tours in Cameroon, the Central African Republic, Chad, India, Pakistan, Russia and Thailand, variously on the payroll of the World Bank, the U.S. Agency for International Development and private projects.

"When Americans go overseas and try to apply what they know, it's not (very) relevant, if at all," she says. "Of all the sectors, healthcare is as much cultural and economic and political as it is the technical delivery of healthcare."
Modern Healthcare Nov. 3, 1997

The world's health care systems are too diverse, however, for American HMOs to be able simply to replicate overseas what they do at home. Managed care executives are taking tools and techniques abroad, and trying to adapt them to local conditions. Health care is not like hamburgers. 'We're not planning to start a global HMO,' says Michael Cryer, a vice president of Aetna International.
Medicine for export The Economist March 7, 1998, U.S. Edition

But with the opportunities come great risks. When dealing with foreign countries, ethics issues are not always clear-cut, Vincze said at the conference.

"The whole notion of compliance and ethics is fraught with pitfalls when you attempt to move to other countries," Vincze said. "People in foreign countries aren't sure this stuff really works. You have to be able to show empirically that compliance programs result in reduced costs."
Vincze has created a model international compliance program he said can be customized to fit each country's system. It is based on the compliance model HHS' inspector general's office gave U.S. hospitals earlier this year (See chart above).
"The significance of this finding is that a compliance program for medical billing that is designed in the U.S. should be applicable in a global context," Vincze said.


Self Deception

Citizens and doctors in the USA were taking action to do something about the serious problems for patient care created by managed care and the disruption of the system by intense distrust. HMO executives were reluctantly acknowledging their failures and promising to change. None of this served to challenge the views of advocates of international expansion. There was no doubt about the benefits managed care offered to others - a poison pill perhaps but they were there to sell it! Many of the claims are snake oil or rationalisations like the reference to doctors below. One of the major claims was to controlling costs. In the USA HMOs simply imposed another layer of profit taking before the money went to care. It was the underlying system and the ideology which supported it which was at fault and no one was prepared to change that.

In less developed countries-India, for instance-utilization review techniques "will enhance quality right off," says Howard Kahn, who heads Aetna's global healthcare activities.
But consultants and entrepreneurs, many of whom talk up the possibilities of global managed care with a kind of Wild West enthusiasm, say the market is lucrative. At the least, everyone agrees it is growing
U.S. flashback. The Latin American healthcare scene is "a snapshot of the U.S. 10 years ago," says Maria T. Currier, a partner in the Miami, Florida, law firm Steel Hector & Davis who recently moved to Caracas, Venezuela, to develop managed-care products in Latin America. U.S. insurers have been selling there for 10 years, but "the real action is about to begin," she says.
"There was a fear in some countries when we started talking about (managed care) because some doctors have gone to the U.S. for training or continuing education, and they read the paper. They read about the challenges to managed care (in the U.S.), and the information is out of context" for the foreign physicians, Kahn says.
MHI: THE NEW WORLD OF MANAGED CARE Modern Healthcare Nov. 3, 1997


Deceiving Others
Con Men Selling Health Care

Managed care's reputation for denying access and compromising care had spread across the world. The response of the con men was not to properly address and discuss the issues. Instead they deceive by calling it "integrated care". This has positive associations with an obvious feeling of validity. This is not seen as dishonesty. The consequence of this is that those who argue for real integrated care have to cope with the smell of managed care. This is why I have not written about integrated care on these pages except to condemn it.

I question the morality of playing on politicians pain in order to create "silos of opportunity" in health care. What has happened to our society?

Indeed, managed care's reputation could use some polishing. "I always stay away from saying `managed care' in other environments because the term carries some baggage," says Aetna's Kahn. "I usually refer to our core capabilities in managing health.
Rather than waiting for governments around the globe to privatize, Tremblay suggests that companies with managed-care expertise approach governments with their ideas on how to save money and improve quality. The key is understanding a government's "pain," Tremblay says. "Governments can be silos of opportunity."
MHI: THE NEW WORLD OF MANAGED CARE Modern Healthcare Nov. 3, 1997

Another way of getting into the system was to get local doctors and businesses to advocate for and become the front for the US company. It is also a nice quirk of chance that Michael Ford's views are mentioned in the same article as comments ridiculing claims of exploitation of patients for profit. This is exactly what Ford's previous employer Tenet Healthcare did on a massive scale.

Likewise, the report cautions against relying on foreign doctors. "Tie down a core group of local general physicians, with excellent training and reputation" and with ties to the community, the report says.
U.S. firms planning to replicate American healthcare overseas shouldn't bolt onto the scene waving the stars and stripes.

"We must do a lot to adapt our system," Ford says. "You cannot go over there with the idea that we are the best. You do not take the attitude that we are an American hospital company. You want to joint venture and build a Chinese hospital with the help of American know-how."
Investors also should be aware that private hospitals can be lightning rods for criticism.

"In some cases, private providers are accused of exploiting patients for profit-prescribing unnecessary tests, performing unnecessary surgery, and prolonging hospital stays," according to the IFC report. "Others suggest that the private sector drains resources away from the public sector that could better be used to serve the poor and dependent."

Working with local governments and encouraging public and private cooperation can help head off those criticisms, the report says. MHI: EMERGING MARKETS: DEVELOPING COUNTRIES OFFER BURGEONING OPPORTUNITIES FOR PRIVATE-SECTOR INVESTMENT Modern Healthcare Nov. 3, 1997

FOREIGN doctors hate HMOs just as much as their American counterparts. - - - - In Europe, for-profit medicine is barely more respectable than loan-sharking. There too, HMOs have to tread softly. One of Germany's troubled public-sector health insurers has America's United Health-Care as a partner: it keeps quiet about this association.
Medicine for export The Economist March 7, 1998, U.S. Edition

Despite growing interest, few of the European health funds use the term "managed care," because its negative connotations in the U.S. have spread abroad, says Susan Corning, deputy secretary-general of the International Federation of Health Funds, a 93-member global network based in Reading, England. Instead, the organizations use the terms "integrated care" or "coordinated care."

"Basically, they realize that as a buzzword, the term has a bad reputation," Corning says. "However, they see (managed care) as an absolute necessity in terms of delivering quality. The concept is inevitable, no matter what you call it."
MANAGED CARE POISED TO TAKE EUROPE Modern Healthcare Nov. 2, 1998

Nevertheless a major impediment has been the context in which the specific term "integrated care" emerged. In 1996 it was not part of the health bureaucracy's language. Instead "managed care" was the rhetoric flavour of the month. However, the controversial experience of managed care in the United States created political risks, particularly reaction to the fear or perception of the "Americanisation" of the health system. Consequently the safer, nicer and more politically correct term "integrated care" was adopted instead. One can fairly describe this as language capture.

I do not have a pristine neatly packaged definition of integrated care that lends itself to pretentious quotation on the conference circuit. Partly this is because the label of integrated care is being tacked on to processes and projects that were underway before the terminology was adopted. That is, it is an after-the-event descriptive label. Partly also because it has unfortunately become interwoven with ideological agendas and venal interests.
Association Of Salaried Medical Specialists taking the ideology out of INTEGRATED CARE Address To Business Information In Action NZ Ltd Integrated Healthcare Summit by Ian Powell, Auckland, March 4, 1999



It is hardly surprising that there should be ideological opposition in countries with a socialist background and in the majority of those capitalist countries which have traditionally considered health to be a common good rather than a commercial opportunity. Citizens in many countries have paid taxes to build up large social security funds. Corporations can smell the dollars.

While concern about the direction of managed care has intensified in the United States, managed care has been diffusing rapidly to other countries. During the late 1980s and early 1990s, reforms in several European national health programs introduced principles of managed care, market competition, and privatization of public services. More recently, managed-care reforms in some European countries, including the United Kingdom, the Netherlands, and Sweden, have been reversed.
The executives responsible for the exportation of managed care have emphasized its financial rewards and have rarely referred to preventive care or quality control, goals that have historically been valued by some health maintenance organizations (HMOs) in the United States. Support for education and research, also valued by some HMOs, has not emerged as an explicit goal.

In explaining their financial motivations for entering the Latin American marketplace, managed-care executives have consistently referred to the importance of access to the social-security funds of these countries. In contrast to the United States, most Latin American countries have organized social-security systems that include health care benefits as well as retirement benefits for many employed workers in large private or public enterprises.
Throughout Latin America, the social-security systems have acquired large funds, which are managed by governmental or publicly regulated agencies. North American executives have perceived the social-security funds in Latin America as a major new source of finance capital.
Access to privatized social-security funds -- recently termed "the manana pension bonanza" in a trade journal (18) -- creates multibillion-dollar capital pools that are available for reinvestment by participating corporations.
As poverty and inequality of income have increased, the number of families with incomes high enough to purchase private health insurance has also grown.
As for-profit managed-care organizations have taken over the administration of public institutions, increased administrative costs have diverted funds from clinical services.
Managed-care organizations in Latin America have attracted healthier patients, whereas sicker patients gravitate to the public sector. In Chile, the ISAPREs have aimed to capture capitation payments for younger workers without chronic medical conditions. As a result, only 3.2 percent of the patients covered by the ISAPREs are 60 years of age or older, as compared with 8.9 percent of the general population and 12.0 percent of patients seen at public hospitals and clinics.
The introduction of managed-care organizations in Latin America is viewed by investors as a potentially lucrative business opportunity; this viewpoint justifies continuing scrutiny.
The Exportation of Managed Care to Latin America by Karen Stocker, Howard Waitzkin, Celia Iriart The New England Journal of Medicine -- April 8, 1999

But the system is still chaotic. In 1998 Malaysia passed the Private Healthcare Facilities and Services Act, which provides clear guidelines for managed-care organizations, including restrictions on their

controls over medical decisions. But the rules often are not followed, according to some sources in the market. Health Minister Datuk Chua Jui Meng recently talked with healthcare industry leaders about his

concern that managed-care organizations have breached medical ethics and government guidelines.
Predictably, physicians are not happy about the entry of managed care, fearful that their fees will be slashed and new rules imposed. The Malaysian Medical Association has urged the government to step up its oversight of managed-care organizations.

"Right now, the doctors are trying to stop real U.S.-style managed care from coming in," says consultant Chye, who predicts that some managed-care companies will fail to deliver promised services or pay providers.

Some opponents of privatization and managed care insist that their nation places such a high value on equity and equal access that only a publicly financed insurance system could meet its needs.
The theme of this year's conference was "Containing Healthcare Costs-Is Managed Care the Solution?"

There, association president and Pantai executive Ridzwan Bakar, M.D., summarized the situation, telling fellow healthcare leaders: "Like it or not, managed care is here on your door stop." Managed care storms Malaysia: Fears are brewing that consumers will be hurt in the transition to privatized U.S.-style HMOs Modern Healthcare International November 15, 1999



 It is impossible to deal with all of the countries targeted in detail. The extracts give an indication.

Last year, a three-way partnership in South Africa called Southern HealthCare Joint Venture was formed by United Healthcare Corp., Minneapolis; Anglo-American, one of the country's largest employers; and Southern Life, a South African life and property insurance company.

The for-profit venture is structured as an American-style managed-care organization that contracts with healthcare providers to offer services to consumers.
Anglo-American and Southern Life have split the remaining 80%. They are providing industry and government contacts and are funneling their employees to the new company for healthcare coverage.

A team of six or seven United executives has been in South Africa since last fall setting up shop. Marketing already has begun, and the first enrollment period is scheduled for this summer in Johannesburg, South Africa.
Over the last three months, United also has been working to strike a deal with Bonn, Germany-based Allgemeine Orts Krankenkassen, a not-for-profit association of so-called ``sickness funds'' that provides coverage for 30% to 40% of the German population.

Because the healthcare industry is still heavily regulated in Germany, United is not planning to set up a separate for-profit company.

Rather, it wants to form a strategic alliance with the national organization that will allow it to provide managed-care management techniques and systems on a contractual basis.
In Tula, Russia, CHP and Albany (N.Y.) Medical College representatives provided advice during the launch of the first Russian HMO. CHP also trained Romanian physicians in various child-care techniques and plans to advise health officials in Poland on how to develop an HMO.
U.S. Healthcare also has gotten its passport stamped.

Jacob Getson, who's in charge of international activities, said the Blue Bell, Pa.-based company has been securing reciprocity agreements and consulting contracts from private insurers since 1990. Hong Kong,
Israel, Spain and the United Kingdom are among places where U.S. Healthcare has done business.
``We waited to see who came to us asking how to apply managed-care techniques,'' he said.

Getson said U.S. Healthcare is not yet ready to bear risk or make major financial investments in these arrangements.
Aetna's planned $8.9 billion acquisition of U.S. Healthcare has the potential to broaden the companies' boundaries even farther.

Aetna International, an Aetna subsidiary, provides health benefit plans to 2.2 million foreign residents in Canada and nine countries in Asia and Latin America.

Aetna typically has a 50% to 80% ownership stake in the foreign affiliates that manage the benefit plans explained Charles Bell, senior vice president for healthcare at Aetna International. In 1995, Bell said,
Aetna's international business lines brought in $88.7 million in net operating income.
International healthcare: U.S. HMOs to go global via overseas Modern Healthcare International June 24, 1996

Aetna Health Management Canada Inc. of Toronto has acquired Associative Rehabilitation Inc. (ARI) of London, ON, one of Canada's leading health and disability management companies. Aetna Health Management is a wholly-owned subsidiary of Aetna Canada Holdings and an affiliate of Aetna Life Insurance Company of Canada.

Another American company, the managed-care giant Kaiser Permanente, has been talking to doctors and governments for the past two years and Columbia's arrival might prompt it to increase its efforts.

Although Kaiser is yet to win a major contract providing health services it is advising on the setting up of computer systems and management services for the South Australian Health Commission.
Slash And Burn And Heal: US Health Care On The Way Sydney Morning Herald February 14, 1997

Parkway Holdings purchased Tenets Asian hospitals in 1996 and maintained a close link with Tenet in its operations. One of its subsidiaries was a managed care group and it had US directors

PARKWAY related companies

Parkway Managed Care Pte Ltd

. . . . . *Director -------THOMAS EGGER LEE 1994-95 (USA)

New frontiers. Kaiser also has begun overseas activity. Kaiser Permanente International was formed in October 1996, following "a deluge of requests for help from around the world," says Williams, who is president of KPI.

Kaiser is providing management and advisory services in more than a dozen countries, including Japan, Russia and the United Kingdom. Kaiser has formed partnerships with a number of organizations in several countries but so far has no direct investments. The international business "is very much part of the future of Kaiser Permanente," Williams says. WHICH IS THE REAL KAISER?: IS THE NATION'S LARGEST HMO A MODEL OF COST-EFFECTIVE, QUALITY CARE OR A GREEDY MEDICAL FACTORY THAT ENDANGERS ITS PATIENTS? Modern Healthcare Aug. 25, 1997

Aetna's international division recently bought a half-interest in a joint venture with Sul America, the largest insurance company in Brazil. Sul America Aetna has 1.6 million healthcare enrollees.

Cigna HealthCare's international unit manages health insurance for 2.5 million enrollees in Brazil through a joint venture formed this year with a large Brazilian bank.
"Following Chile's early example, Colombia, Argentina, Mexico and Brazil all will be privatizing their social security and healthcare systems over the next few years," she says.
Right now, he says, GLT (Galeno Life Tim, which is now the largest HMO in Argentina.) is "exploring an equity relationship with a large U.S. managed-care company," which he declines to identify.

GLT also is evaluating opportunities in Brazil, Chile and Uruguay, he says.
Difficulty in Europe.

Outside Latin America the going can be tougher.

Europe, in which most countries have state-run health systems, is difficult for insurers.

United HealthCare Global Consulting, a division of Minneapolis, Minnesota-based United HealthCare Corp., has several consulting projects in Germany.

"We're focused on implementing medical management programs to manage utilization and improve quality, hospital precertification and concurrent stay-review programs," says Sid Stolz, senior vice president of United's global division. United sells these services to large German insurance companies "looking for ways to better manage their exposure for healthcare," says Stolz, who is based in Minneapolis.

But the European market is difficult to crack, and United has to be selective in where it goes, Stolz says.
And as Europe becomes more unified, there will be growing opportunities for transborder health insurance claims processing and management, Tremblay says.

Kaiser has projects in Germany and the Netherlands, but, like Aetna, it has focused more on areas outside developed Western Europe. Kaiser has been consulting and sometimes providing management services and actual healthcare-through stints spent abroad by its U.S. doctors-in countries including Borneo, China, India, Japan, Malaysia, Poland, Russia, Singapore, Turkey and Vietnam.

Last year Kaiser announced a $4.5 million, three-year cooperative agreement with the U.S. Agency for International Development to assist the Russians in reforming their healthcare system. The project involved setting up three demonstration sites in Russia for several models of integrated healthcare delivery systems.

In October last year, 14 Russian doctors and administrators traveled to Kaiser's Oakland, California, headquarters for an intensive introduction to the concepts of managed care. Since then, more Russian doctors have visited Kaiser operations.
South Africa's inflation problem.
The market conditions seem right for managed care in South Africa, which has been experiencing what Finance Week recently called an unsustainable medical inflation rate.

The South African publication reported in September that the cumulative total inflation for all healthcare sectors from 1992 to 1995 was 152%. The country is turning to managed-care companies to control costs.

United HealthCare has developed an HMO-like plan in Johannesburg. The plan, in its second year of operation, has more than 200,000 enrollees. United's partners there are two large local insurance carriers, Stolz says.

Meanwhile, Aetna's quality-measurement subsidiary, U.S. Quality Algorithms, has signed a three-year consulting agreement with Sanlam Health, South Africa's second-largest private insurer. USQA and Sanlam will co-develop and implement a measurement system to analyze physician performance and care delivered to Sanlam's enrollees.

"Quality is paramount in Sanlam's move to managed care," says Altus van der Merwe, managing director of Sanlam. "Fee-for-service medicine has become unaffordable, and quality-based managed healthcare can provide a more cost-effective solution."

About 20% of South Africa's population is covered by private insurance. Managed care is a developing concept in the country, with an incomplete set of tools to measure quality.
MHI: THE NEW WORLD OF MANAGED CARE Modern Healthcare Nov. 3, 1997

With this month's opening of Beijing (China) United Family Health Center, a U.S.-based company is proving that the Chinese wall keeping foreign hospital investors at bay can be hurdled.
On Nov. 1, the company was scheduled to open what it says is China's first foreign-managed healthcare facility. The hospital is designed to woo Beijing's 80,000 Western expatriates and the local private-pay population.
Beijing United is only the first leg of Chindex's healthcare service strategy. The company hopes to build five more hospitals in China over the next several years and five outpatient clinics over the next 12 months. It recently hired an executive director of hospital development to spearhead future clinic and hospital development programs.

But according to a new report prepared for International Finance Corp., Uganda and many other developing countries may offer rich potential for private healthcare investment.

Uganda's newly stable government has cleaned up corruption, has gotten the economy moving and is putting infrastructure in place, the report says. But in the country's largest city and capital, Kampala, there remains no high-quality hospital to treat upper-income residents and expatriates, who must travel to Kenya for care.
In sub-Saharan Africa, Uganda is called promising, but South Africa is seen as "overbedded," so private investors are advised to focus on "support services rather than hospitals."
Certain areas of developing Europe may not be ready. "Countries emerging from Soviet domination have little experience with private healthcare and, except for Estonia and Poland, which are ready for investment, will take two
to four years for private health markets to develop," the report says.

However, like the U.S., South Africa lacks a national health insurance program. The result is a widely divergent, two-tiered delivery system separated mostly by race and wealth.
Keith Hollis, chairman of Medscheme, the nation's largest health plan, is convinced managed care can help slow medical inflation in the private sector and help mend some of the rips in the public sector's safety net. Yet he says he realizes change will be slow in coming.
Still, South African physicians share American doctors' fear of losing control through managed care, just as patients in both countries dread intrusion and the loss of choice. And managed-care efforts are hampered by the lack of established clinical and financial coding systems.
"Healthcare in South Africa is not for the fainthearted, although there is clearly a role for the tools of managed care," says Lewis, president of the Academy for International Health Studies. "But for now, the challenges are expanding employment, treating the water supply, access to primary care and improving other essential parts of the infrastructure."

Aetna International, Inc., the international arm of Aetna (NYSE:AET) today announced that it has acquired 100 percent of the common shares of Asistencia Medica Social Argentina S.A. (AMSA), Argentina's largest health care company with 250,000 members. Aetna will pay approximately $ 120 million for AMSA and will begin managing the AMSA operations immediately
Aetna Acquires Argentine Health Care Company Business Wire January 13, 1999

"Now, with our partners, we're the No. 1 healthcare company in Brazil, Chile and Argentina, and we rank second in the Mexican healthcare market,'' Frederick Copeland Jr., president and chief executive of Aetna International, said in a statement. He did not elaborate. Aetna to Appeal Landmark Damages for Denying Care Medical Industry Today January 22, 1999

Growth in the international business for the fourth quarter was driven by strong earnings from Brazil, Canada, Taiwan and the Mexican Afore pension business, partially offset by other Mexican operations and start-up businesses, Aetna said.

Notice the way managed care is called integrated care below

A GROUP of Taranaki GPs is spearheading a New Zealand-first health insurance scheme which they say is aimed at helping patients no longer eligible for operations through the public health system.

New Health Minister Wyatt Creech praised the integrated care plan when in New Plymouth last week saying it would help keep people healthy and out of hospital.

The First Health doctors, backed by United States-based insurance group Aetna Health, last month launched the scheme, called Active Care.
Health care insurance gets trial in Taranaki The Daily News (New Plymouth) March 10, 1999

I suspect that Canadians were not receptive to managed care. They have a universal insurance system run by government.

Aetna sold the division, company officials said, to devote more resources to markets in Latin America and East Asia. AETNA CANADA IS BEING SOLD THE HARTFORD COURANT April 21, 1999

But this dreamy Southeast Asian healthcare landscape is fading, and Malaysia's days as a refuge for carte blanche fee-for-service medicine appear numbered. Private-sector managed care is expected to hit Malaysia like a typhoon off the South China Sea.
Fears are brewing that consumers will be hurt in the transition, particularly with the growth of U.S.-style managed-care plans.

Just four years after their 1995 introduction in Malaysia, managed-care organizations have enrolled approximately 600,000 people.
Two U.S. players, Aetna U.S. Healthcare and UnitedHealth Group, recently entered the market. Britain's largest insurance companies are expected to follow suit, said Pang Hsiang Chye, a Malaysian-born

healthcare consultant at Milliman & Robertson in San Francisco.

Overall, 30 or more managed-care organizations have registered with the Ministry of Health to do business in the country, according to officials, although only a handful of those appear to have products on the market.
Howard Kahn, vice president of global health business at Hartford, Conn.-based Aetna International, says he expects the plan to grow "by leaps and bounds." Some analysts say plan enrollment could increase to as many as 500,000 members in five years. Malaysia is Aetna's largest market in Southeast Asia so far, surpassing Indonesia, New Zealand and the Philippines.

The country's expanding middle class is producing educated consumers who demand service and modern technology, says Kahn. That's driving interest in private-sector care and inspiring employers and individual consumers alike to turn to insurance companies and managed-care organizations to spread risk and control costs. Managed care storms Malaysia: Fears are brewing that consumers will be hurt in the transition to privatized U.S.-style HMOs Modern Healthcare International November 15, 1999

The Malaysian Medical Association (MMA), wiser and more enlightened perhaps than its US counterpart, has opted for a different tack and has thrown its weight behind the proposal for a publicly-operated healthinsurance scheme for Malaysia.
The proposal for a National Health Financing Authority is now being finalised by the Ministry of Health for submission to the National Planning and Development Committee, and eventually to the Economic Planning Unit for consideration under the 8th Malaysia Plan.
Six Questions for the Health Minister on the National Health Financing Authority (letter to the Sun) Dr Chan Chee Khoon Co-ordinator Citizens' Health Initiative Penang, Malaysia March 5, 2001


Central Map ..... Initial Map ..... USA Map ..... Australian Map ..... International Map ..... Corporate Practices Map..... (to print)
   Home Page .......... US Corporate page ........... Entry Man Care
Managed Care
Man Care I ..... Man Care II ..... Man Care III

This page created in September 2003 by Michael Wynne