Improving the national health care system

Health Care Reform

Several years ago, health care reform was a hot political topic with President Bill Clinton's proposals to revolutionize medical health insurance. Even though his proposals didn't become law, sweeping changes are occurring within the health care system, particularly in regards to managed care health insurance and the reengineering of the hospital. The goals of these changes are to cut medical costs, make the delivery of health care more efficient, and to promote preventive medicine, health, and primary care. While these changes are positive in many ways, they are also creating concerns among both the health care consumer and provider. These changes must be managed to insure that high quality care remains at the forefront of medical care.

MANAGED CARE HEALTH INSURANCE

GROWTH AND DEVELOPMENT

Managed care plans are the fastest growing form of health insurance (Whigham-Desir, 1996). Sarah Glazer (1996) describes the concept of managed care: "The underlying principle of managed care is to keep the entire community healthy by providing preventive care, such as immunizations and mammograms, at little or no cost. In exchange for lower premiums, copayments and deductibles, the consumer agrees to Health care 2 see a limited group of physicians selected by the plan. The plan keeps costs down by limiting the consumer's access to expensive specialists and procedures." Since three-fourths of Americans receive health insurance through their employer, managed care plans are becoming increasingly popular as both employer and employee seek to decrease medical care costs (Whigham-Desir, 1996).

Managed care has been around since the 1930s when HMOs were formed to promote preventive medicine among doctors (Spragins, 1996). In the 1970s, the federal government encouraged the formation of HMOs to control rising hospital costs (Glazer, 1996). In the late 1980s, costs skyrocketed, and in 1988, employers' health benefit costs rose a record 18.6% (Glazer, 1996). As a result, managed care began to take root, and by 1993, a majority of employees were covered by managed care (Glazer, 1996). With medical costs approaching one trillion dollars, 15% of the Gross National Product, cost containment is a major issue (Shortell, Gillies, & Devers, 1995). As of July of this year, 56 million people have joined managed care plans (Bennett Clark, 1996), and another 50 million will have joined by 2000 (Spragins, 1996).

TYPES OF HEALTH INSURANCE PLANS

At least 1,000 health insurance plans exist but they fall into certain categories (Whigham-Desir, 1996). The traditional plan has been the indemnity or fee-for-service plan. Patients visit any doctor at any time and pay directly for their treatment. They can be reimbursed later, usually for 80% of the cost (Whigham-Desir, 1996). These plans are the least restrictive, but the most expensive.Four types of managed care

Health care 3 plans exist. They are the health maintenance organization (HMO), preferred provider organization (PPO), point-of-service (POS), and independent practice association (IPA). In an HMO, the member is offered a specific list of doctors and hospitals from whom he or she must receive care in order to be covered. He or she must also choose a primary care physician clled the "gatekeeper" through whom all care is channeled. This type of plan is the cheapest but most restrictive.

Three other types of managed care plans are available. A PPO contracts with doctors and specialists to provide care at discounted rates. Members usually have a wider choice than an HMO (Glazer, 1996). They can utilize these services without going through a gatekeeper, but if they go outside of the plan they pay like fee-for-service, usually with 70% of the cost covered (Whigham-Desir, 1996). A POS plan is similar to a PPO, in that members can receive care from a certain list of doctors and specialists who've contracted with that insurer. They can also see non-plan doctors with or without a gatekeeper's permission, but they must be willing to pay more and pay like fee-for-service if they do so (Whigham-Desir, 1996). An IPA is a fourth managed care plan "in which individual physicians, typically practicing out of their private offices as part of a medical group, contract with a health plan for a fee or fixed amount per patient" (Glazer, 1996).

ADVANTAGES OF MANAGED CARE

Managed care offers advantages over the traditional fee-for-service plans. Cost is the primary reason so many people are joining managed care plans. Members pay premiums like fee-for-service, usually by having the cost deducted from their

Health care 4 paychecks, but when they visit the doctor they only have to pay a $5 to $10 copayment fee so an $8,000 bill for delivering a baby would only cost a $10 copayment fee (Whigham-Desir, 1996).

In fee-for-service, proponents of HMOs say that doctors had a tendency to overtreat to receive more income since each treatment or test carried an additional fee (Glazer, 1996). Managed care seeks to control more how doctors treat patients to prevent overtreatment and higher costs.

Other advantages are that there are no deductibles to pay or insurance claims to fill out by the consumer (Whigham-Desir, 1996). Also, a person has one "wellness checkup" a year, while babies have several checkups during their first year so such a plan is ideal for families or people with health problems that need regular checkups (Whigham-Desir, 1996). Doctors' credentials also tend to be screened more by managed care companies (Glazer, 1996). Glazer (1996) points out another advantage: "By relying heavily on a primary-care physician as an overall health-care coordinator, HMOs may give more comprehensive care to someone with a disease that crosses several specialties."

DISADVANTAGES AND CONCERNS OF MANAGED CARE

Despite the positive aspects of managed care, problems have arisen. Former U.S. Surgeon General C. Everett Koop (1996) notes that "the rapidly proliferating HMOs-most of them investor owned and for profit-seem to be interested firstly in managing costs and only secondarily in maintaining health. When profit, not health, is the Health care 5 objective, it poses a real threat to the doctor-patient relationship, to academic medical centers, to medical research, and to those who are unable to obtain health insurance. Whatever its flaws, traditional fee-for-service medicine always allowed physicians to act as advocates for their patients. HMOs cannot assure us that physicians will, in every instance, put their patients first."

In recent years, a few incidents have made the news in which a patient's medical care wasn't covered by an HMO. A major legal battle usually followed in response to the HMO's refusal to provide coverage. Nelene Fox was a patient who was found to have breast cancer in 1991 at the age of 38. A $200,000 experimental bone marrow transplant was thought to be her best chance at survival, but her HMO, Health Net, refused to cover it. She and her family raised the money for the operation, but in early 1993, she died nine months after receiving it. Because they didn't provide coverage, Health Net was sued by her family for $89 million but an undisclosed amount was settled on later. The case caused Health Net and other HMOs to allow more bone marrow transplants (Glazer, 1996).

As in Nelene Fox's case, denying or delaying specialized care is a major concern for members in a managed care plan. Glazer (1996) mentions that "as the nation shifts to managed care and changes its focus from high-tech care for the very sick to keeping the overall population healthy, controversies like the Fox case are inevitable, some experts say." She also says, however, that "delays in referrals to the right specialist can have serious consequences for people with complicated illnesses."

Health care 6

Therefore, people with severe illnesses may be at a disadvantage if they are enrolled in a managed care plan. Since cost containment is a major goal, limiting access to specialists is encouraged among the primary care doctors in a managed care plan.

The question of whether or not the quality of care is suffering because of managed care is debatable. Quality has been found to be equal according to studies comparing traditional fee-for-service and managed care (Glazer, 1996). Glazer (1996) also notes that the same studies reveal that HMO patients tend to be less satisfied with their care but happier with the costs than people in fee-for-service plans. Bennett Clark

1996) cites a study indicating that managed care members with illnesses are more restricted from specialized care, wait longer for care, and tend to be unhappier with their physicians than people in fee-for-service plans.

Not only is access to specialized care more restricted in managed care plans, but many plans offer physicians financial incentives to deny advanced care. Glazer (1996) cites what two Harvard doctors feel about HMOs: "Doctors who contract with HMOs may find that the fixed fee they receive for each patient, known as "capitation," just covers their costs, they said. To make a reasonable income, the authors said that physicians must earn bonuses for keeping down hospitalizations, referrals to specialists, and other costs." Sometimes an HMO will withhold pay from a primary care doctor to pay for specialized care (Bennett Clark, 1996).

The incentive not to refer patients to specialists leads to another problem with managed care: the so-called "gag rule" which threatens doctor-patient relationships. Contracts with doctors often contain a clause which doesn't allow the doctors to discuss

Health care 7 with their patients financial incentives to deny treatment or about treatments not covered by the plan (Glazer, 1996). This has caused many consumers, especially those with chronic illnesses, to form organizations with the American Medical Association and physician specialty groups to promote legislation forbidding "gag rules" (Glazer, 1996). One group, Citizen Action, has 3 million members and "has been lobbying in state legislatures for laws that would require plans to disclose how they pay their doctors; give patients the right to choose specialists outside the plan; and provide appeals for patients who get turned down for expensive treatments" (Glazer, 1996).

The doctor-patient relationship is also affected if a patient must switch to a new doctor under managed care. Having a longterm relationship with a primary doctor is important because he or she is more knowledgeable about the patient's history. If employers switch often to other managed care plans, the primary care doctor a patient sees is also likely to change (Glazer, 1996). This affects the physician's practice as well. To keep patients, a doctor is often inclined to join more insurance plans. This is the case for OB-GYN physician M. Gerald Hood of Atlanta who belongs to 15 different plans, but despite this, his practice has declined 50% in the last three years (Bennett Clark, 1996).

Another concern deals with the percentage of the premium cost which goes directly to medical care. The remaining percentage finances administrative costs and profits. Bennett Clark (1996) says that "a plan with 90% of premiums going to medical care is "very good." Some plans, however, set aside up to 25% for Health care 8 administration and profit according to a California Medical Association survey, and Cathy Hurwit of Citizen Action says, "There are a lot of plans that are ripping consumers off" (qtd. In Glazer, 1996). Legislation is being promoted by Citizen Action which requires at least 85% of premiums to be spent on medical care (Glazer, 1996).

Medical research and education is also being affected by managed care.

The HMO, Health Net, like other HMOs doesn't spend money on research and also won't cover experimental or investigative treatments (Larson, 1996). In the past, research has been paid for by patient bills, but teaching hospitals are having to compete with managed care plans for patients (Glazer, 1996). Since managed care promotes preventive medicine to serve community needs better, medical research is becoming a lesser priority.

Managed care is also hurting the uninsured poor. In the past, doctors paid for such people through the bills of other patients, but with managed care, such a cushion won't be available (Glazer, 1996).

ASSESSING PLANS FOR QUALITY

With the concerns managed care is bringing, assessing plans for quality is vital. Close to 600 HMOs exist, and most are new (Spragins, 1996). Managed care plans receive accreditation from the National Committee for Quality Assurance (NCQA), and they are judged on 50 different characteristics such as the credentials of the plans' doctors (Spragins, 1996). Under half of the HMOs have been reviewed, and 37% received full accreditation, 39% received partial accreditation, 11%

Health care 9 received provisional accreditation, and 12% failed to be accredited (Spragins, 1996). These results show that many plans need to improve to be fully accredited. The quality of a plan can also be reviewed if it publishes the results of the Health Plan Employer Data and Information Set (called HEDIS) (Spragins, 1996). Two other quality control measures to look for is the percentage of a managed care plan's doctors that are board certified and if the plan is associated with hospitals accredited by the Joint Commission on Accreditation of Healthcare Organizations (Spragins, 1996).

Regardless of these quality control measures, another concern exists.

According to surveys, NCQA results aren't used by most employers in determining which plans to use (Glazer, 1996). Cost, rather than quality, is the determining factor in deciding which plan to sign up with. However, employers will need to start assessing plans for quality more now that costs are being controlled (Glazer, 1996).