Current trends and future legislation's impact on managed care

¶ … Future Legislation: The Impact on the Future of Managed Care

The focus of the research proposed in this study is to ascertain what the advantages and disadvantages exist relating to managed care and to attempt to understand the impact that the current trends and future legislation in health care will have on the future of managed care in the health care system of the United States. Unless future legislation addresses the disadvantages and drawbacks that exist in relation to the managed care of the health care system will suffer greatly not only in relation to the quality of services and care provided to patients but will as well suffer from the inability to properly train and educate medical service providers. It is likely that the impact of future health care reforms and legislation will result in changing the face of managed care so dramatically that it will fail to exist in its present form. Questions in this proposal for research include those of: (1) What impact has managed care had on the training and education of health care service providers? (2) What does future legislation relating to health care system financing need to address to optimize services patients receive from health care providers and to optimize the training and educational potential of health care service providers? And (3) What effect will the proposed health care reforms have on managed care and will managed care exist in its present form following these health care reforms?

CURRENT TRENDS & FUTURE LEGISLATION: THE IMPACT on the FUTURE of MANAGED CARE

INTRODUCTION

The focus of the research proposed in this study is to ascertain what the advantages and disadvantages exist relating to managed care and to attempt to understand the impact that the current trends and future legislation in health care will have on the future of managed care in the health care system of the United States.

STATEMENT of THESIS

Unless future legislation addresses the disadvantages and drawbacks that exist in relation to the managed care of the health care system will suffer greatly not only in relation to the quality of services and care provided to patients but will as well suffer from the inability to properly train and educate medical service providers.

RESEARCH QUESTIONS

The questions addressed in the research proposed herein are those as follows:

What impact has managed care had on the training and education of health care service providers?

What does future legislation relating to health care system financing need to address to optimize services patients receive from health care providers and to optimize the training and educational potential of health care service providers?

What effect will the proposed health care reforms have on managed care and will managed care exist in its present form following these health care reforms?

LITERATURE REVIEW

The David and Lucille Packard Foundation journal 'The Future of Children' Vol. 8, No. 2 states that managed care has "...revolutionized the health care system in America." (1998) Managed care is described as a "vast array of financing and health care delivery practices that are designed to limit costs and ration care." (David and Lucille Packard Foundation, 1998) it is additionally related that healthcare providers and insurers have "created cost0conscious health insurance plans and employers and individuals are subscribing to them at unprecedented rates." (Ibid, 1998) Characteristics common to managed health care plans are inclusive of those as follows:

1) Strong financial incentives for members to obtain health care from only selected providers and hospitals that follow the rules established by the plan.

2) Reliance on gatekeepers, preauthorization, and other techniques to control access to specialty care, diagnostic tests, and hospitalization.

3) Shared financial risk among doctors, the health plan, and other health care professionals through the use of capitated payment methods or bonuses and penalties. (David and Lucille Packard Foundation, 1998)

According to this study reported in 1998, managed care has the potential of improving "delivery, quality and financing of health care services..." (Ibid) Additionally provider networks have served to improve both access to and coordination of care and in addition "the use of financial incentives to providers and members may promote preventive health care." (Ibid, 1998) the information systems which are very sophisticated have the potential to bring about improvement to accountability to customers through costs and services being monitored as well as the health of the managed care system members. Managed care has served to:

1) Reduce overall health care costs;

2) Stimulate the growth of for-profit health care;

3) Stimulate the growth of 'for-profit' health care;

4) Improve the access to preventive health and specifically for children who are privately insured;

5) Decrease access to preventive health care for children enrolled in Medicaid; and 6) Reduce access to specialty care for all insured children with an illness that is 'chronic or disabling'. (Ibid, 1998) critical feature of the revolutionary managed care system is the opportunity that presents in the creation of a managed care system that 'works for children'. The features of such a system are stated as follows:

1) a "medical home" that provides accessible, continuous, comprehensive, family-centered, coordinated, and compassionate care for all children.

2) a defined benefit package that is crafted around children's changing physical and emotional needs.

3) Access to appropriate pediatric specialists for children with chronic or disabling illnesses.

4) Coordinated care both within the managed care network and among other child-serving organizations outside the plan.

5) Rewards and encouragement for the active participation of parents.

6) Fair reimbursement rates, particularly for children with special health needs; and 7) Rewards to plans that improve the health of the children they serve. (Ibid, 1998)

The work of Seymour H. Levitt (2000) entitled: "Impact of Managed Care on Scholarly Activity and Patient Care: Case Study of 12 Academic Radiology and Radiation Oncology Departments" published in the Journal of Radiology reports a study in which "Six departments of radiology and six departments of radiation oncology from areas with low, medium, or high managed care penetration were asked to complete a questionnaire designed to address the impact of managed care on research and scholarly activity. Information, when available, was taken from fiscal years 1993 and 1998." According to Levitt site visits were made to the 12 departments which were then followed up with questionnaires. Findings of the study show that the departments that had "medium to high managed care penetration" had reported a higher level of dissatisfaction "in their ability to remain active in their education and research goals." (2000)

The results of this study indicate "...that for the period surveyed, the departments needed to increase clinical time to make up for decreasing patient care revenues. In turn, this has reduced the time and money devoted to scholarly activities. Information from this study will be used to develop a trends database for all U.S. radiology and radiation oncology departments. This, together with a more comprehensive study by the RSNA, will assist in measuring the current and potential long-term impact of managed care and other system changes on the practice of radiology and radiation oncology." (Levitt, 2000)

Levitt states that in the current focus held in health care on the marketing and economics of health care that the discussion surrounding health care is quickly becoming "one solely of dollars, policy, budgets and marketing strategies." (2000) This puts the primary purpose and mission of medical care, which is providing care to ill people at risk and diminishes this central purpose. According to Levitt (2000), health care professionals are "being challenged to clearly and strongly define" precisely who they are and what they do in order to "prevent this erosion of the central purpose" of the mission of those in the health care profession as they go about shaping the profession's future in the health care environment characterized by "rapid changes." (Levitt, 2000)

The health care professional's primary responsibility is to its patients and in order to make provision of the "best technology and clinical experience" to patients it is necessary that the health care professional of today "support and participate in scholarly activities" that serve to best inform the health care profession of the best methods of caring for their patients. The following figure is stated by Levitt to illustrate the relation of quality patient care to organizations that sponsor educational and research activities.

Relation of Quality Care to Organizations that Sponsor Educational and Research Activities

Source: Levitt (2000)

Levitt reports that centers of education and research and academic health centers are "under threat from the combined dominance of managed care and legislation results from the 1997 Balanced Budget Act. The revenue that is received from patient care that has been provided at academic health centers and that has been derived from research has been historically utilized in supporting academic health center activities which includes education in basic and clinical science and this revenue is stated by Levitt (2000) to contribute "up to 90% of the budget" however, "with the current focus on cost and budgets, serious problems are occurring within these institutions that are regulating research and education to secondary status..." This has resulted in health care that is high quality in nature being threatened.

In the absence of a strong focus on research and development towards testing new technology and pharmaceutical benefits and risks future health care quality is at risk. Undermining the current and future skill and problem-solving abilities of physicians is the lack of a strong commitment to education. Because previous studies which have cited the adverse effect of managed care on scholarly pursuits have been for the most part merely "anecdotal" the RSNA developed a "two phase project to systematically and scientifically examine the impact of managed care on the scholarly activities of departments of radiology and radiation oncology in the United States." (Levitt, 2000)

Levitt states that the goals of the questionnaires in this study were to "...establish a trends database for all radiology and radiation oncology academic departments nationwide. The database will help departments measure the ongoing impact of managed care and other health care system changes on research and scholarly activity." (Levitt, 2000) Findings of the study state that the majority of the departments, "regardless of managed care penetration recognized the extent of managed care penetration in their market areas. In most cases, managed care was defined as reduced-fee health care. All departments indicated that the growth of managed care firms had influenced their departments, and that Medicare rules and regulations were exacerbating that influence." (Levitt, 2000)

Levitt reports that the departments that had higher levels of managed care penetration stated the following which has resulted in managed care being impacted by:

1) Increased total patient examinations;

2) Higher billing for services and lower collection rates, ranging from 25% to 50% of billing;

3) Lower reimbursement rates because of increased concentration of managed care firms, and 4) Increased levels of clinical time required to maintain department revenue.

Levitt (2000) states that the specific effects of managed care on faculty activities included those as follows:

Teaching;

Research;

Publishing.

According to Levitt (2000) that which was stated as being the main reasons of the inability of faculty in fulfilling their scholarly responsibilities was "...the demand for increased clinical time because of falling patient revenues." Levitt concludes his report by stating that managed care in combination with the Balanced Budget Act of 1997 "is threatening to undermine the financing of education and research, which, along with patient care have been the basic mission and tenets of academic health centers." The effects specifically stated include those as follows:

constraints on patient care revenues are restricting funds flowing to education and research;

Funds from medical school tuition and fees are lower due to medical school enrollment; and Cuts in Medicare resulting from the Balanced Budget Act of 1997 are reducing money available to help fund graduate medical education. (Levitt, 2000)

The American Medical Student Association reports in the "2008-2009 Legislative Agenda" that it believes that Congress must take the following steps in address problems relating to health care among the population:

Congress must fund title VII and VII of the U.S. Public Health Service Act and ensure equity in access to quality, affordable health care for communities of color and underserved populations;

Congress must act to guarantee affordable access to essential medicines and regulate the conflict of interest to increase professionalism in interactions between pharmaceutical industry representatives and prescribers;

Congress must take proactive steps to reduce and eventually eliminate medical student indebtedness by reforming the policies of the Higher Education Act;

Congress must assure access to comprehensive reproductive health services;

Congress must protect the rights and health care rights of gay and lesbian couples;

Congress must invest in global health and set policies that guarantee access to health care and affordable essential medicines;

Congress must overhaul America's health care system to create a single, comprehensive publicly funded, privately provided system of health care for all; and Congress must pass legislation to control and eventually eliminate negative environmental determinants of health, and invest in a primary care workforce for underserved communities. (American Medical Student Association 2008-2009)

FINDINGS

This research proposal has found that managed care has great disadvantages to patients due to the limitations and restrictions as well as the efficiency requirements that are placed on health care service providers. Due to the dissatisfaction of the public relating to managed care services provision in combination with the proposed health care reforms there are many questions surrounding the future of managed care and even as to whether managed care will continue to exist in its present form. Managed care has historically failed in its provision of quality health care services due to the limitations that are placed on health care service providers by outside entities. Added to this is the failure of managed care to allocate proper funding for academic hospitals for use in their education and training of hospital staff.

CONCLUSION

Because of the disadvantages and limitations of managed care and the added factor of the looming future health care reforms and uncertain legislation, the future of managed care is at best precarious at present and is greatly uncertain.

RECOMMENDATIONS

Because of the importance in understanding what current trends and future legislation hold for managed care it is important that this issue be examined in greater depth. Therefore, arising from this brief study in the form of a proposal for research is the recommendation that this issue be examined in greater length and at a greater depth in attempting to understand these issues and what the precise impact of current trends and future legislation will be upon managed care in the U.S. health care industry.