Managed care deserves some of its bad press
Providers’ guidelines could lessen industry woes
Ralph Pollock, MPH, is a Denver-based consultant and principal of the AP Group. As a speaker, he addresses market analysis and dynamics, employer and purchaser issues, as well as business and strategic planning for nearly all segments of the industry.
Pollock chairs Colorado’s Business Council for HealthCare Competition. He serves as advisor and faculty member to the University of Denver’s Healthcare Systems Graduate Program. His often provocative analyses of health care trends are grounded in experience with most of the interest groups that have left their mark on health care over the past three decades.
Q. In many provider and consumer circles, the answer to, "What’s wrong with health care?" is managed care. How has this come to be?
A. Somehow, we started looking at managed care benefits as entitlements. We forgot why managed care came to be in the first place, and the additional benefits it brought. With indemnity insurance, "well visits," and preventive care were not covered, for example, and we did not have office visit copays; we had co-insurance and annual deductibles instead.
We also had a steady escalation of health care costs, based on charges and demand for services. The system did not employ restraints on use of services, tests, or the like, and many patients were over-treated by doctors taking advantage of the fee-for-service, charge-based payment scheme.
Without some new system, very few would have been able to afford health care today. Managed care intended to exercise some control over the use and cost of services, and certainly to eliminate unnecessary care.
True, some programs became heavy-handed in their approach; but the backlash has been mostly a media phenomenon based on anecdotal, isolated incidents. It is not a perfect world. Managed care is evolving in response to the market and its customers.
Interestingly, managed care patients have come to expect that they are owed every convenience, treatment, and remedy under the sun. Recent studies have shown that patients will demand more services and care from an HMO than they will from an unmanaged plan. Managed care’s worst decision may have been that of charging the patient a $5 or $10 copayment.
People have come to expect that the copayment entitles them to unlimited access to all the resources. The patients’ virtual isolation from economic responsibilities has probably contributed to the lack of attention to clinical quality issues.
One way to put the brakes on this is the three-tiered payment system, especially for prescriptions. Many HMOs are using it. For example, they charge full price for brand-name drugs, $20 for the formulary drugs, and $10 for generics.
Q. Are providers and health care delivery organizations still dragging their heels in areas where they could reach higher degrees of excellence?
A. It’s difficult to make a concerted effort in this environment. Achieving higher degrees of excellence in a physician practice requires the application of assessment tools, benchmarking, and monitoring progress.
Any activity that requires this type of intensive administration and operational oversight will be seen as detracting from the business at hand: Seeing patients and getting paid for seeing patients. Both of these activities are rather labor intensive.
Without outside administration and oversight of a quality improvement program, requiring virtually no time or resources from the provider, it would be difficult to persuade a practitioner to participate in any meaningful way. Unless achieving the improvement can be accomplished in a seamless manner as a matter of course, the current environment is not conducive to an all-out effort in this regard.
Physicians in small, organized groups, where peer pressure and review are important, have demonstrated some success in disease management and coordination of patient care. We know that when groups are within the 12 to 18 range, they’re small enough to operate on peer pressure. When they’re larger, you lose the impact.
Health care delivery organizations such as HMOs, on the other hand, may have the aggregated data to help effect certain simple improvements, but they are often in a touch-and-go relationship with the physicians whose practices they monitor through claims activity, utilization review, chart review, and such. That is where the ball could be picked up. But it would take a trusting relationship between payer and physician in order for such efforts to be successful.
Certainly, some physician-based delivery organizations make an attempt to engage such measures, but increasingly these organizations are operating under severe financial constraints themselves. When efforts are made by individual organizations, they are piecemeal efforts without systemwide application or benefit. Still, every bit helps.
Q. You’ve described the mismatch between quality data that employers want when they shop for health care benefits, and what’s available to them. Should we stop tracking the so-called soft measures — wait times and patient satisfaction — in favor of "real" health information like the best place to have your hernia repaired or average back-to-work times?
A. First, it can be argued that the simple, seemingly benign, measures such as patient satisfaction and wait times are often good proxies for overall quality of care in a physician’s office. Beyond that, other measures are available to employers through various vendors who audit charts and track quality on behalf of health plans in order to comply with HEDIS.
Employers have access to that information if they are willing to pay for it. I don’t think we should stop tracking the so-called "soft measures," though. They provide valuable information for the employer and consumer.
Q. Can we afford to apply best practices, as we know them, without bankrupting our health care resources?
A. By definition, best practices include efficiency and efficacy. I would expect that applying best practices would therefore result in lower costs. The problem is in using a piecemeal approach, or in becoming complacent when we think we have identified a best practice.
We have to be constantly alert, updating and upgrading our operational and clinical approaches to each disease, each process, and each system. Since communication is the cornerstone to success in this arena, the connectivity that the Internet provides might offer the best opportunity to make notable progress in the next few years.
[For further information, contact Ralph Pollock, AP Group Inc., P.O. Box 480706, Denver, CO 80248-0706. Telephone: (303) 282-6466. Fax: (303) 282-6465. E-mail: [email protected].]
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