Paul M. Ellwood, Jr.

Paul Murdock Ellwood Jr. (July 16, 1926 – June 20, 2022) was an American physician and a controversial figure in American health care. Often referred to as the "father of the health maintenance organization", he not only coined the term, he also played a role in bringing about structural changes to the American health care system to simultaneously control cost and promote health by replacing fee-for-service with prepaid, comprehensive care. The term "HMO" was coined by Ellwood in a January 1970 Fortune magazine article. More recently, he had advanced an agenda for monitoring health outcomes, so that patients, providers, and payers can make health care decisions based on real information about what treatments and providers are actually effective.

Ellwood began his career as a pediatric neurologist, specializing in polio at the height of the international polio epidemic in the early 1950s. The epidemic subsided with the introduction of the polio vaccine by Jonas Salk. The Sister Kenny Institute, which Ellwood directed, then filled its vacant beds with children suffering from learning disabilities. According to Ellwood, one evening while doing rounds amid crying children, it struck him that they were making decisions for economic reasons (the need to fill hospital beds) that were not in the best interests of patients. His growing conviction that this calculus – putting the interests of health care providers over patient well-being – characterized the American medical system in general, led him to conceive of and advocate for alternative approaches.

Biography Ellwood was born to Paul and Mary (Logan) Ellwood on July 16, 1926, in San Francisco and raised in Oakland, California. His mother was a nurse-turned-homemaker and his father worked as a family physician. He was co-editor of the Handbook of Physical Medicine, and received the 1971 Gold Key, physical medicine's highest award. In 1973

Controversy over HMOs Subsequently, when the Clinton administration was grappling with health care reform, the Jackson Hole Group, according to The New York Times, was "one of the most important influences in the shaping of the Clinton plan." The plan was called managed competition, and two of its most prominent advocates from the Jackson Hole Group were Ellwood and Alain Enthoven. In essence, the concept was that groups of health care providers and insurers would compete with each other to get the business of large cooperatives seeking insurance. In the end the Clinton reform plan collapsed. By then, the Jackson Hole Group had distanced itself due to disagreement about the degree of regulation the plan sought to impose, and Ellwood had become a pioneer in outcomes management.

The spread of HMOs and other pre-paid health plans has spawned significant debate about the impact on quality of care. From the beginning, critics argued that pre-paid competitive plans like HMOs provided incentives for doctors and hospitals to "skimp" on care. Many have complained that the plans restrict providers' autonomy and patients’ choice of doctors. On the left, advocates of a Canadian style government health plan have argued that the Managed Competition approach enriches the insurance industry at patient and taxpayer expense and relies naively on free market forces. Many proponents of the managed competition approach, including Ellwood, argue that regulations built into the legislation have undermined the market competition that was meant to enable patients and providers to choose among plans based on quality and cost. Ellwood has repeatedly expressed disappointment with the way his concepts played out. "What went wrong?" he reflected in 2011. "Political expediency in the initial plan designed to promote HMO growth led to the inclusion of three mistakes: for-profit plans, independent practice associations, and the failure to include outcome accountability." Ellwood was particularly adamant about the last. Without measures of health outcomes, which he had advocated from the beginning, there was no way to really know how the changes in health care organization were affecting patients. More important, there was no way to ensure that patients and providers were making good decisions. And there was no way to hold health providers accountable, to ensure that they were not reducing costs in ways that hurt patients.

Outcomes management Ellwood's concern about the importance of measuring health outcomes that would hold health providers accountable for quality dated to the mid-1960s. In 1968, as an adviser to the Johnson administration, he devised the plans for the establishment of U.S. Agency for Healthcare Research and Quality (AHRQ). He would become increasingly vocal about the need for evidence-based medicine and outcomes accountability.

In 1988, he was invited by the Massachusetts Medical Society, which publishes The New England Journal of Medicine, to deliver their annual Shattuck Lecture. He called for "a national database containing information and analysis on clinical, financial, and health outcomes that estimate as best we can the relation between medical interventions and health outcomes, as well as the relation between health outcomes and money." He envisioned a sort of health plan "report card" that would allow patients to make informed choices among health plans based on health outcomes for specific conditions and patients’ reports of their satisfaction. He argued that there is extraordinary variation in the quality-performance of different doctors and health institutions, yet patients, insurers, policymakers, and even other doctors have few tools for assessing quality. Similarly, doctors and patients often choose medical interventions with only limited information about the effectiveness of various treatments and how they impact patients' quality of life; a health outcomes database would vastly improve the information available when making such decisions. Finally, a health outcomes database would guide policymakers and large providers in the overall design of health systems. The Mayo Clinic and some health providers have begun to experiment with outcomes management.

Personal life Ellwood and his former wife, Elizabeth Ann Schwenk, On December 8, 1996, The New York Times Magazine ran back-to-back stories about Paul Ellwood and David Ellwood under the cover banner, "What Have the Ellwoods Done to America?" – a reference to Paul Ellwood's role in reshaping American health care and his son's role in reshaping the American welfare system. In 2000, Ellwood married Barbara Winch, a former academic health science center executive. They eventually resided in Bellingham, Washington, where Ellwood died on June 20, 2022, at the age of 95.

Publications 1970–1979

1980–1989

1990–1999

Interview by Stephen Murata.

2000–2009

Article first published online: September 18, 2006. Reprinted from The Milbank Memorial Fund Quarterly, Vol. 50, No. 4, Pt. 2, 1972, pp. 73–101. . .