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Managed care: The changing environment for consumers and health care providers

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Abstract

“Managed care is the health law issue of 1999” (Leibold, 1999, p. 5). This chapter addresses changes in the health care system initiated by the managed care paradigm — which, in turn, has prompted many legal changes and challenges. Specifically, this chapter will describe the following: (a) an overview of the managed care system versus the traditional fee-for-service system; (b) a selected review of research literature on the strengths and limitations of the managed care system; and (c) a projection of the future trends of the managed care system for patients, consumers, health providers and society. The second area, the review of research literature, will include the impact of managed care on patients, consumers, physicians and nurses. In this chapter, the word patient, means someone who is ill; the word consumer, means someone who has health insurance and may become ill in the future and needs to utilize the health delivery system.

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This study was designed to evaluate patients presenting to a large urban university emergency department (ED) who were subsequently denied authorization for reimbursed care by their managed care provider and to characterize the denial as potentially safe or unsafe based on published triage criteria. A consecutive case surveillance was performed from October 1, 1994 to September 30, 1995 at a university-based ED (30,000 visits per year) for adult patients in inner-city Chicago. Cases were comprised of adult managed care participants whose providers refused by telephone to authorize payment for ED services and who then left the ED without treatment. Chief complaints and vital signs were used to categorize patients as high-risk or nonemergent based on previously published criteria. A total of 2,965 adult managed care patients presented to the ED during the study period, representing 11.1% of the total ED census. Of these patients, 244 (8.2%) were denied authorization for payment of their care. By previously established criteria, 115 (47.1%) were identified as potentially unstable, 61 (53%) due to abnormal vital signs and 54 (47%) with other high-risk indications such as severe pain, chest pain, or abdominal pain. These potentially high-risk patients may subsequently suffer adverse outcomes. Current guidelines used for telephone triage by managed care to divert patients from our ED do not meet previously published safe triage criteria.
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Despite the considerable attention paid to the collection of data and the publication of health plan report cards, there is no available study on the comparability of published report cards. Ratings from seven health plan report cards publicly available in fall 1996 were compared--including those produced by major periodicals, a large national employer, a nonprofit consumer group, a health maintenance organization accreditation agency, and a consortium of employers. Dimensions of plan performance common to the seven report cards were identified. Spearman rank correlation coefficients were computed for each pair of report cards for each of the three dimensions that were evaluated. COMPARABILITY OF REPORT CARDS: Although plan ratings tended to be positively correlated as hypothesized, the magnitude of the estimated correlation coefficients varied. For example, the estimated correlation coefficient between two periodicals' overall plan ratings was 0.48. The ranges of estimated correlations were 0.18-0.70 for preventive care (among four report cards) and 0.19-0.73 for enrollee satisfaction (among three report cards). Discrepancies in ratings may reflect methodologic issues pertaining to the sample of health plans used, plan performance measures included, and the processes by which individual measures were aggregated to construct indices and ratings. Health plan report cards may be sending mixed signals to consumers. These inconsistencies may explain why focus group studies have found that despite the widespread indication that plan performance measures would be useful, relatively few of those who had seen such information report using it in making their plan choice. Future efforts to evaluate health plans should clearly identify assumptions, methods, normative judgments, and limitations.
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Article
Patients with chronic disease may be excluded from capitated managed care plans due to higher than average expected costs. In an attempt to remedy this inequity, one type of risk adjustment technique proposes to set separate capitation rates for certain chronic illnesses, including coronary artery disease (CAD). Cardiologists, who increasingly are requested to accept capitation, will benefit from understanding the impact of using clinical factors as opposed to using demographic factors to set capitation rates. Using a 5% national random sample of the 1992 Medicare population, we determined mean annual expenditures and variation in expenditures of individuals with CAD. We compared the use of 2 demographic factors currently used for capitation rate adjustment (age and gender) with 2 factors not currently used--3-digit International Classification of Disease (ICD-9) code (a measure for severity) and Charlson index (a measure for comorbidity). Mean annual expenditures for individuals with CAD were more than double mean annual expenditures for the general Medicare population ($6,944 vs $3,247). Among individuals with CAD, mean expenditures of subgroups defined by both age and gender ranged from $6,205 to $7,724. In comparison, stratifying by measures of severity and comorbidity identified subgroups with lower and higher mean expenditures, producing a range of $1,702 to $19,959. Substantial variation of expenditures for individuals within subgroups defined by severity and comorbidity remained, with few patients having substantially higher expenditures than the rest. When capitation rates are set with the use of demographic factors alone, patients may be subjected to risk selection and physicians to financial loss. Using clinical measures may decrease the incentive for patient risk selection, but substantial financial risk to physicians would remain, because of a relatively few patients with high expenditures (or costs).
Background: It is often difficult to understand where responsibility lies for monitoring and improving quality in managed care. From 1996 through 1998 a group of individuals convened by the Institute of Medicine's (Washington, DC) National Roundtable on Health Care Quality developed a model of accountability for the quality of care provided by managed care organizations (MCOs). Each of three overarching forms of accountability (professional, market, and regulatory) has a set of tools for imposing accountability and-because accountability relationships are not self-enforcing-sanctions for failures of accountability. Professional accountability: Fiduciary relationships in medicine are an essential part of any quality accountability mechanism, and it will be important to maintain the strength of the professional model in the changing health care system. Yet it is not easy to preserve the strength of the professional model in an MCO environment in which professionals are not dominant, and there is likely to be increasing pressure to weaken their autonomy. Market accountability: The primary assumption of market accountability is that consumers will select options based on perceived value to them and will make new choices based on their information and experience. Market accountability requires choice among competing providers and information to inform choice. In health care, however, individuals rarely have the information they need and often do not have choice. Accountability for quality generally has not been a major feature in contracts. Regulatory accountability: There is a widespread perception of defects in a market-based health care system. Many believe there is a need for a regulatory structure to correct market failures. The use of regulation to impose accountability for quality requires that a regulatory framework, penalties for violations, and effective enforcement mechanisms are all established. PUBLIC GOODS: The model of accountability for quality in managed care does not promote public goods such as education, research, public health, or care for the uninsured. Indeed, the locus of responsibility to the community when markets fail to supply these public goods is controversial. Nevertheless, such responsibility should be considered by MCOs and policy makers. Collaboration to improve quality of care: Given market-driven models of health care financing and delivery, it might be feasible and desirable to encourage collaboration among MCOs to improve quality, whether at the national or local market level. The health professions in general, and the medical profession in particular, are and must be accountable to society for providing leadership in the development of knowledge about effective medical care, in defining high-quality care, and in advocating for and improving the quality of care. Conclusion: Establishing effective accountability for quality involves multiple entities and many different kinds of accountability relationships. The three forms of accountability interact, and all operate at once.
Article
This is a comparative analysis of California's "experiment" in Medi-Cal managed care. It compares managed care to fee-for-service in the area of quality. In March 1993, the California State Department of Health Services issued a State Strategic Plan for Medi-Cal Managed Care. The goal: to transfer the delivery of care for the majority of the state's Medi-Cal population from a predominantly fee-for-service payment system to capitated managed care. The state of California has steadily increased its commitment to the large-scale expansion of managed care within the Medi-Cal Program in order to improve beneficiaries' access to quality preventative and primary health care while acting as a prudent purchaser of services. This study examines one Local Initiative--Inland Empire Health Plan--created as a not-for-profit, joint powers, public entity by Riverside and San Bernardino counties, California.
Article
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Article
To determine whether membership in a managed care organization is associated with a delay in receiving definitive surgical treatment for benign gynecologic or gynecologic oncologic diseases. Four hundred patients who had definitive surgery between 1994 and 1997 were divided into those with benign gynecologic (n = 207) and gynecologic oncologic diagnoses (n = 193). Each group was subdivided into managed care patients and fee-for-service patients. Subgroups were analyzed for delay in surgical treatment, emergency room visits, length of stay, age, clinic visits, prior evaluation, prior treatment, second opinions, operating room time, estimated blood loss, and surgical complications. There were 122 managed care and 85 fee-for-service patients with benign gynecologic diagnoses. The time from initial presentation to the date of definitive surgery was significantly longer for the managed care patients (133.7 +/- 21 days compared with 84.9 +/- 12.8 days, P = .03). Of the 193 patients with gynecologic cancer 96 were in the managed care group and 97 were under fee-for-service arrangements. There was no significant difference in the time from initial presentation to the date of definitive surgery between these two groups (35.7 +/- 7.4 days compared with 20.5 +/- 2.5 days, P = .29). There were no significant differences between groups in emergency room or clinic visits, prior evaluations or treatments, or surgical complications when stratified by diagnosis. The mean age of managed care patients was significantly lower than that of fee-for-service patients for gynecologic diagnoses (46.4 +/- 9.7 years compared with 56.5 +/- 14.9 years, P < .001), and gynecologic oncologic diagnoses (47.5 +/- 13.2 years compared with 60.9 +/- 15.8 years, P < .001). Membership in a managed care organization is associated with a delay in receiving definitive surgical care for benign gynecologic, but not gynecologic oncologic, diseases.
Article
This article compares the quality of care provided by managed care plans (MCPs) and indemnity (or fee-for-service [FFS]) plans since 1980. The 44 studies examined are the studies that Miller and Luft cited in their 1994 and 1997 reviews of the literature comparing MCPs with FFS plans. These studies are examined to determine how well they met Miller and Luft's selection criteria and, in addition, whether they controlled for differences in the breadth of insurance coverage. The 44 studies generated 57 observations. MCPs scored better than FFS plans on 10 of these, equally well on 25, and worse on 22. However, only 44 of these observations met the Miller-Luft criteria plus the coverage criterion. Four of these indicated that MCP care was better, 19 that MCP and FFS care were equivalent, and 21 that MCP care was worse. The small body of reliable studies comparing the quality of MCP care with that of FFS care indicates that the quality of care provided by MCPs tends to be equal or inferior to that provided by FFS plans.
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