GERIATRICS IN MANAGED CARE: Is Managed Care Good or Bad for Geriatric Medicine?*

This article uses clinical vignettes to examine the simultaneous dangers and opportunities that managed care brings to geriatric medicine. While the complex multifactorial syndromes prevalent in older adults might at first glance seem poorly handled under capitation, we argue that the incentives provided under existing delivery systems can be equally perverse. These improper incentives have arisen from (1) the fee-for-service payment mechanism itself, which has spawned a subspecialty culture ill-equipped to deal with the primary care needs of older adults and (2) the fragmentation of funding sources for geriatric care into two major payers (Medicare and Medicaid), encouraging providers to focus on cost shifting rather than the logical integration of services. The result has been a delivery system that provides little impetus to maximize functional status, the central goal of modern geriatric medicine. Because physicians may assume financial risk under global capitation, and because the cost of caring for a frail older adult is inversely related to functional status, managed care offers the potential to align the goals of cost containment with the goals of modern geriatric medicine. Physicians should have a substantive voice in the design and implementation of these systems.