Mistakes to avoid when planning managed care strategies.

Hospital executives, steeped in hospital business traditions, sometimes fall victim to those traditions when planning their managed care strategies. They may fail to sufficiently evaluate their hospitals' market position or set appropriate priorities for their various business strategies. They may not recruit individuals with managed care expertise, develop effective marketing plans, or construct realistic physician networks. Some hospital executives may be ill-equipped to deal with cultural clashes and reluctant to share control of their managed care organizations with physicians. Or, they may not always understand the true nature of the arrangement they have entered into, the information and technology needs of the arrangement, and their own strategic advantages. Today's hospital executives must plan their managed care strategies carefully and execute them intelligently to ensure success.

Over-the-counter drugs as a new managed care benefit.

Nonprescription or over-the-counter (OTC) drugs represent many opportunities for physicians, insurers, manufacturers, and pharmacies to work together synergistically to provide more cost-effective care for patients. The authors review the reasons for offering an OTC drug benefit and provide two proposals on how to implement the benefit in an HMO environment.

Redistribution of risk throughout the pharmaceutical industry.

When the pharmaceutical industry awoke to the reality of managed care, they found themselves spending millions of dollars on a customer they did not know or understand. Those companies did not realize that insurers and managed care organizations would be changing the entire face of the pharmaceutical industry. Nonaggressiveness by pharmaceutical manufacturers has meant loss of control by an industry that for many years existed in an unchallenged state. Partnerships are now tantamount to survival.