Managed care will stay, but who will manage it?
More physician friendliness may be ahead
If you’re hoping that one of the changes your practice will see in the next century is the demise of managed care, you’re out of luck, experts say.
"Physicians have to consider that managed care is here to stay, and its driving force is not going to go away. Even if the federal government regulates it, managed care is still going to be a force," says William J. DeMarco, MA, CMC, president of DeMarco & Associates, a Rockford, IL, health care consulting firm.
It doesn’t matter what physicians think about managed care; the employers, who are paying the majority of health care costs, love it, adds Ernest Berger, chief operating officer of Physicians Strategic Resources, an Atlanta firm that assists physicians with the non-legal issues of terminating their contracts with physician practice management firms.
"The question is not if we’re going to have managed care, but who is going to be managing the care," says Randall Killian, MS, MBA, executive vice president of the National Association of Managed Care Physicians in Glen Allen, VA.
For instance, even in the wake of a plethora of horror stories, managed care enrollment increased 6.5% in the past year. There are 30 large health care markets that already report more than 50% penetration by managed care.
"There are a lot of managed care patients. The physician has to reconsider why managed care exists. It exists because employers don’t believe that hospitals and physicians will work together for cost-effective care. And, until recently, they didn’t have to," DeMarco says.
But, while managed care will continue, the managed care of the 21st century may be very different.
"There will always be managed care, but I seriously doubt if the managed care we know today will be the managed care we know tomorrow," predicts Thomas R. Reardon, MD, president of the American Medical Association.
For instance, the patient backlash against managed care will continue, prompting companies to return decision making to physicians, he says.
"Insurers have been spending more money to micromanage physician practices than they were saving. They’re realizing that what they were doing wasn’t working," Reardon adds.
A prime example was when UnitedHealth Group, the second-largest health insurer in the country, recently announced with great fanfare that it will give doctors the final say on what treatments are medically necessary. Other insurers are expected to follow that lead.
As a result of the consumer backlash, you can expect your relationship with health plans to improve in the future.
Health plans aren’t going to be more physician-friendly as far as reimbursement is concerned because they still want to hold down costs, but they may approach the relationship in a friendlier, less adversarial manner, Killian says.
Community partnerships could increase
He sees an emerging partnership with the patient at the center of care, and an increasing tendency for physicians, pharmacies, hospitals, health plans, and employers to work together.
"Because health care delivery is community-oriented, you are going to see markets where health plans, hospitals, and physicians come together as partnerships, along with the employees who pick up the tab," Killian says.
DeMarco foresees an increase in regional health plans as big companies begin to decentralize their services. The most successful plans may be run by physicians and hospitals, he adds.
"We are seeing a shift to decentralization and bringing control back to physicians and hospitals locally," he adds.
Local plans have the advantage over large national plans because they are more customer-friendly, DeMarco says.
For instance, in Madison, WI, 80% of the population is covered by HMOs, the majority of which are physician-owned and -operated. Physicians in Madison have a higher satisfaction level with managed care than they had with fee for service, according to a study conducted by researchers at the University of Wisconsin, DeMarco says.
Physicians who want to succeed in the future should work together with other health care entities in the community to create a local solution to the community’s health care needs.
"Somebody needs to provide leadership in the community, to get employers to see the vision of locally controlled health care," he says.
Consider sidestepping the health plan
The physician-hospital partnership could consider contracting directly with employers, rather than going through a health plan, DeMarco suggests. More and more employers are open to direct contracting with physicians and hospitals, he adds.
At the very least, physicians should improve their relationships with a select number of managed care companies and negotiate with managed care companies, employers, or an employer coalition.
"There are things that physicians can control by negotiating effectively with health plans. If physicians don’t step up to the plate, their options will be limited," DeMarco says.
"Physicians should think in terms of creating a new, re-engineered version of managed care for themselves," he adds. "They should improve their clinical product and contracts with three or four really good health plans and build a solid relationship with them."
Here are some other suggestions for coping with managed care in the future:
• Be selective about the managed care plans with which you contract, DeMarco advises. "Stop signing up for everything and giving your practice away," he adds.
• Read all your managed care contracts and decide what you like and don’t like. DeMarco suggests that physicians take time off to carefully read their managed care contracts and come up with their own modified agreement, based on the good and bad features of each plan.
• Develop your own modified agreement and start talking to two or three managed care plans.
• Develop a core strategy for where you will be five years from now and how managed care fits into your plan.
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