Prepaid health plans have aroused new competition in health care in many parts of the nation. Federal Trade Commission economists reported yesterday after a study of nine metropolitan areas.
But they called the Washington area one of the glaring exceptions, despite the presence of one of the nation's oldest such plans, Group Health Association.
Prepaid health plans - also known as "health maintenance organization" or HMOs - are plans that give their members almost all their hospital and medical care for a fixed monthly sum, most of it under one roof by the plans' own medical staffs.
First the Nixon and now the Carter administration have pushed expansion of these plans because they typically manage to keep down high-priced hospital use just by stressing good out-patient care.
In several regions, said FTC economists Lawrence Goldberg and Warren Greenberg, such plans have forced their main competitor, Blue Cross, to increase its benefits to keep subscribers. Unlike HMOs, Blue Cross does not provide care; it only pays for care after it is given.
Also, the economists maintained, Blue Cross has managed to reduce hospital use by its subscribers in these regions, too.
Finally, they said, in many cities both Blue Cross and doctor's groups have started new prepaid plans in response to the early plans' challenge.
Only recently, the economists reported, has Washington's 39-year-old Group Health Association begun to trigger such response.
The economists made no attempt to judge the quality of GHA's care or tis value so its subscribers, but they praised all such plan as potential cost-cutters and worthwhile alternatives to fee-for-service medicine.
While GHA may have served its own members well, th economists said, it has not been aggressive until recent years, and failed to expand quickly enough into Virginia and Maryland suburbs where it now has new clinics.
Also, the economists said Group health costs, and what it takes to which it has solved in largely by moving care of many patients from costly George Washington University Hospital to less expensive Doctor's Hospital.
Also, they said, Group Health has bad to pay Blue Cross to pay its members' hospital bills to take advantage of Blue Cross' unique ability to get discounts from hospital.
Group Health could do even better in growth and cost control if it had its own hospital "as the strongest prepaid plans do," the FTC staff members said. The District Department of Human Resources has turned down a GHA request for a certificate of need to build a hospital, saying the city already has too many hospital beds.
"We're not trying to tell a community it should have more hospital beds'." "We are saying that prepaid plans can help communities control health costs, and what it takes to make strong plans Goldberg said.
Medical competition may finally be growing here, the economists concluded. Both Georgetown and George Washington Universities have started their own prepaid health plans - also called "health maintenance organizations" or HMOs. Sixty doctors and dentists have started an independent practice association through which, too, are offering care for a fixed, prepaid sum, though in their own offices rather than central clinics.