The Managed Care Patient Advocate Information and Discussion about Managed Care

Dialogue To control rising medical costs, many employers and other insurance providers are choosing managed care. In the traditional health-care system, physicians are reimbursed for performing any medical procedure they think may help their patients. Often there are few incentives to save money. Under managed care, a single organization has responsibility for delivering care and conserving re sources. Doctors must be frugal, often following guidelines set by the organization. Some say this is no solution at all, only another extreme. Endeavors' Angela Spivey asked Paul Halverson, instructor in health policy and administration, and Larry Churchill, professor and chair of social medicine, to share their opinions on the health care debate. Putting prevention to practice by Paul Halverson Health maintenance organizations (hmos) are not intrinsically good or bad; it depends on how they're implemented. The hmo was designed to emphasize maintaining health rather than performing the expensive, acute interventions that generally characterize health care. The theory is that an hmo is paid a certain amount of money per patient per month to take responsibility for keeping the person healthy, so the organization has financial incentives to screen for disease and prevent costly illnesses or injuries. For example, if a patient has the potential for cardiovascular problems because of his genetic makeup or health history, we'll reduce costs if we give him nutrition and exercise counseling and risk-factor screening and treatment. It's less expensive to pay for one hour of nutrition counseling than to pay for the coronary artery bypass surgery that might ensue if the individual doesn't change his lifestyle. Managed care takes a macroview of the world in which we devote our attention and money to prevention; instead of doing one heart transplant, maybe we have the money to do 2,000 hypertension screening exams. Unfortunately, much of this is theoretical in the current health-care system. My research shows that hmos are reluctant to spend money on prevention for a patient with the hope of a payoff coming in ten years, when in fact that patient may not be a member in even one year. The hmos that were most interested in prevention and improving community health were in a market where hmos had been in the area for a long time and most people belonged to one. These organizations are more likely to spend money for prevention becau se a healthier community overall reduces expenses for the entire market. The type of hmo also makes a difference. Most in this country are independent-practice associations in which doctors belong to an hmo and receive a certain amount of money per member to take care of those patients, while at the same time they continue seeing fee-for-service patients. This makes the hmo simply a payment vehicle rather than a different way of treating patients. The most success with preventive care occurs in the group- and staff -models such as Kaiser Permanente or Prudential, where the doctors actually work directly for the hmo, or they work for a group that has an exclusive contract with an hmo. These physicians can standardize treatment for certain conditions based upon the most effective approach. For example, Group Health of Puget Sound in Washington has studied extensively how to best take care of patients with diabetes, so they were able to develop and implement a protocol that all their physicans followed. That resulted in substantial reductions in costs of treating diabetic complica tions and, most importantly, improvement in the health of the diabetic patients. Despite its problems, managed care is here to stay. The incentives in the fee-for-service system are fundamentally wrong--the more doctors do, the more they get paid. There's no incentive to keep patients healthy, and no cost-limiting factor. And since money is limited, we wind up with a rationing system in which the government comes in and says, "Y ou can have this care, but you can't." Rather than making this smorgasbord of benefits available to an individual to use as they desire, the managed-care philosophy says, "There's some rationality about this system, and we will develop guidelines by which individuals can best use services." It seems to me that a managed-care system that focuses on keeping people healthy is a good alternative to a rationing system. Keeping the trust between doctors and patients by Larry Churchill In the fee-for-service system, the patient trusts the doctor to do anything and everything possible to heal him or her. But in the managed-care system, doctors and patients are somewhat at odds, because doctors have loyalties not only to individual patients, but also to the entire patient population and the managed-care organization. Doctors have direct incentives for being efficient in using resources, not in offering everything. This puts indi vidual patients at some slight increased risk. But the patient still wants the best possible care, and the assurance that the physician really has his or her best interests in mind. So how can we make managed care work and ensure that the trust between doctors and patients is not lost? One way is for patients to be well-informed and ask questions before they choose a health plan, before they get sick and are more vulnerable. Patients need to know that most hmo doctors have powerful, direct financial incentives to provide less care. For example, some organizations withhold a portion of each physician's monthly salary until the end of the year, when they receive the withheld amount only if the organization has done well and met its budgetary goals. If patients are aware that such financial tradeoffs influence doctors' recommendations for treatment, they'll be more likely to ask about other available options. It's also imperative that doctors play a large role in determining care guidelines and that they be given enough latitude to override the rules in individual cases. Physicians, not business people, should be determining what counts as good medicine. The amount of control doctors have over these guidelines varies among managed-care organiza tions, so this is another question patients should ask. Patients also need to know how much of an hmo 's dollar actually goes into care, and how much goes for profits. There's nothing wrong with profit in healthcare, but there is something wrong with outrageous profit that sacrifices the quality of medical care to provide dividends to stockholders. I've seen statistics recently that show, in some in stances, out of every dollar paid in health-care premiums, only 75 cents gets returned in direct services to patients. That's a 25 percent overhead cost, which is outrageous. Compare that to a government-run organization such as Medicare, which has an overhead cost of something like 3 percent. Unfortunately, all this information is hard to obtain. For example, a managed-care organization called U.S. Healthcare fired one of its physicians, David Himmelstein, after he went on television and talked about his contract. By speaking up he violated the contract, which said that he couldn't talk about any of U.S. Healthcare's efficiency mechanisms, and that he couldn't say anything that would possibly reflect negatively on the organization. Largely because of the bad press from this incident, these so-called gag clauses are probably on their way out. But waiting for lawsuits and television shows to change the system is a slow, expensive process. Managed care isn't going away, because the government and employers are not willing to pay for the high costs of the traditional system. So we need consumer groups and physicians to be much more active in getting regulations passed that ensure patients' access to information, allow doctors more control over care guidelines, and limit the profits hmos can make. Right now there are virtually no laws about these matters. There should be.