Managed Care - PowerPoint PPT Presentation

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Managed Care

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If the patients together spend more than 363 days, the doctor receives nothing extra. ... employees get booklets which rank doctor groups on what they charge ... – PowerPoint PPT presentation

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Title: Managed Care


1
Managed Care
  • James G. Anderson, Ph.D.
  • Purdue University

2
History of Managed Care
  • Early Plans Kaiser-Permanente Group
    Health of Puget Sound Health Insurance Plan, NY
  • HMO Act 1973 200 million awarded to
    non-profit groups
  • Employers in the 1980s began to contract with
    managed care plans to reduce health care costs

3
History of Managed Care
  • Federal and State Governments began to encourage
    Medicare/Medicaid enrollees to enroll in managed
    care plans
  • Managed Care Plans begin to withdraw from
    covering Medicare enrollees

4
Major Types of Plans Group or Staff Model
  • Group of physicians contracts to provide services
  • Physicians are employees and are not organized in
    separate medical groups
  • Exercise control over the amount and type of
    care patients receive
  • Primary care doctors act as gatekeepers
  • Pre-approval of specialty services, expensive
    diagnostic tests, hospitalization
  • Incentives to physicians to limit services

5
Major Types of Plans Independent Practice
Association
  • Physicians remain in their own offices but
    contract to treat patients enrolled in plan
  • Health plan contracts with physicians to provide
    care at a negotiated rate per capita, for a
    negotiated fee, or on a fee-for-service basis
  • Physicians may contract with more than one
    managed care plan
  • A portion of the physicians fees may be held
    back until the end of the year and distributed if
    there is a profit

6
Major Types of Plans Preferred Provider
Organization
  • Physicians remain in their own offices but
    contract to treat patients enrolled in plan
  • Health plan contracts with physicians to provide
    care according to a discounted fee schedule
  • Physicians may contract with more than one
    managed care plan and can see other patients on
    a fee-for service basis
  • Plans generally do not use primary care
    physicians as gatekeepers

7
Major Types of Plans Point-of-Service
  • Encourages the coupling of a patient with a
    primary care physician who acts as a gatekeeper
    by offering employee incentives (e.g., more
    benefits, lower co-payments)
  • Enrollees have the freedom to seek care from
    nonaffiliated providers but pay substantially
    more out-of-pocket for care

8
Percentage of all Covered Workers By Type of
Plan1996-2002
9
Number of Persons Enrolled in Medicare under
Different Payment Options 2002
10
Number of Medicaid Beneficiaries Enrolled in
Managed Care1990-2002
11
How do managed care plans influence physicians
practice behavior?
  • Clinical rules - treatment protocols,
    algorithms, practice guidelines, regulations,
    administrative constraints, utilization review
  • Incentives - Reimbursement through per capita,
    discounted fee schedules, bonuses, etc.

12
Care vs. CostExamples of US Healthcare Incentives
  • Hospital Stay. If the patients collectively
    average fewer than 178 days in the hospital per
    year, the doctor receives a bonus of 2,063 per
    month. If the patients together spend more than
    363 days, the doctor receives nothing extra.

13
Care vs. CostExamples of US Healthcare Incentives
  • Emergency-room Use. If emergency-room costs
    average les than .84 per patient in any given
    month, the doctor receives a 453 bonus for that
    month. If the patients average more than 1.64,
    their doctor receives nothing extra.

14
Care vs. CostExamples of US Healthcare Incentives
  • Specialist Referral. If specialist costs per
    patient average less than 14.49 per month, the
    doctor gets a bonus of 1,323 for the month. But
    if the costs rise above 30.49, the doctor
    receives nothing extra.

15
Typical Hospital Stay for New Mothers
  • Australia 4-6 days
  • Canada 2 ½ days
  • France Up to 2 weeks 5-day minimum
  • Germany 7 days
  • Great Britain 3 days
  • Ireland 5-6 days
  • Japan 5-7 days
  • Netherlands Mostly home births with all-day
    nurse for a week
  • Sweden 1-3 days w/ midwife home visit
  • United States 24-36 hours

16
Percentage of Mastectomies Done on an Outpatient
Basis
17
Do managed care plans reduce health care costs?
  • Plans have a significant impact on use and costs
    of service, although this may not result in lower
    system-wide costs
  • A survey of 2,409 employers found that
    respondents spent 14.7 less per employee for
    HMO coverage than the average cost per employee
    of traditional indemnity plans
  • The average cost per employee for care delivered
    through PPOs was 6.1 below that of indemnity
    plans
  • The average cost per employee of point-of-service
    plans was 7.9 lower than traditional indemnity
    plans

18
How do managed care plans affect quality of care?
  • Studies have shown that elderly, poor and
    chronically ill patients have worse physical
    outcomes under Managed care
  • Hospitals under managed care plans more
    frequently deny admission or prematurely
    discharge mentally ill patients
  • HMOs frequently limit access to National Cancer
    Centers and enrollment in clinical trials of
    experimental cancer treatments

19
Potential BenefitsPatients
  • Less over-treatment
  • More preventive care
  • Lower cost
  • Minimal paperwork
  • Low or no co-payment and deductibles

20
Potential BenefitsPhysicians
  • Lower practice start-up costs
  • Dependable income
  • Regular hours
  • Structured practice
  • Incentives for cost-effective care
  • Assured patients

21
Potential BenefitsPayers
  • Lower health care costs
  • More predictable costs
  • Use of business management practices (e.g., CQI)

22
Potential BurdensPatients
  • Incomprehensible benefit plans
  • Limits on specialty services, hospitalization,
    etc.
  • Physician is no longer the patients advocate

23
Potential BurdensPhysicians
  • Physicians role is changed to that of a
    business-person
  • The physician is less responsive to the patients
    needs
  • Physicians lose clinical autonomy in ordering
    tests, treatment, hospitalization, etc.

24
Potential BurdensPayers
  • Complex health care plans
  • Inadequate data concerning outcomes, quality of
    care
  • Concerns about price-fixing, monopolization
  • Uncertainty concerning liability

25
Percent of Public Dissatisfied with Health Care
26
The Backlash Against Managed Care
  • AMAs patient Protection Act.
  • Patients Rights bills in the U.S. Congress.
  • Over 27 states have passed patient protection
    laws that include some or all of the following
  • Right to sue External appeals Referra
    l out-of-network Coverage of Emergency
    services Access to prescriptions not
    covered by the plan

27
Conflicts
  • Choice
  • Cost Quality

28
Employer Backlash
  • Minneapolis businesses launched a program to
    overhaul local health delivery systems. Their
    objective was to bypass the region's three large
    health maintenance organizations (HMOs), contract
    directly with doctors and inject a dose of
    free-market economics into medicine.
  • No fewer than 26 of the region's largest
    corporations -- including 3M, Honeywell, Dayton
    Hudson, Pillsbury and Carlson Companies --
    entered into the arrangement, which has been
    described as a rebellion.

29
Employer Backlash
  • In the new scheme, doctors are free to charge,
    organize and operate as they choose.
  • But employees get booklets which rank doctor
    groups on what they charge and how they fare in
    terms of customer satisfaction -- and employees
    who choose expensive doctors must pay the extra
    out-of-pocket.
  • Payments to doctor groups are raised if they wind
    up attracting sicker-than-average patients -- who
    cost more to treat.
  • Physician groups which find ways to treat
    patients more efficiently get to keep the savings
    -- while inefficient or wasteful doctors who go
    over budget are penalized.

30
Physician-Patient Conflicts
  • A number of studies and press reports indicate
    that the financial arrangements Health
    Maintenance Organizations (HMOs) make with
    doctors reward physicians and hospitals for
    deferring or withholding care that is deemed too
    expensive, pitting the financial interest of the
    doctor against the medical needs of the patient.
    For example

31
Physician-Patient Conflicts
  • The brain tumor of a 5-year old Florida girl was
    repeatedly misdiagnosed as the flu until her
    mother took her to a facility outside the HMO -
    which refused to pay for the surgery resulting
    from the correct diagnosis.
  • Long Island Jewish Hospital in Queens replaced
    private doctors in its anesthesia department with
    lower-paid and less-experienced salaried
    physicians, and in one 10-week period four
    patients died from anesthesia-related
    complications after successful surgery.
  • A California HMO was fined 500,000 by the state
    for refusing to refer a young girl to a
    specialist for her Wilm's tumor and instead
    assigning a physician who had never operated on
    children or on a Wilm's tumor.

32
Public Misunderstanding of HMOs
  • Some 55 percent said they have either never heard
    the term "managed care" or didn't have a good
    understanding of what it means.
  • Nearly one-third said they have never heard the
    term "health maintenance organization" -- or had
    heard it but didn't know its meaning.
  • Only 52 percent knew that HMOs put emphasis on
    preventive care.
  • One in three who knew what HMOs were didn't know
    that they provide coverage for set monthly fees.
  • Moreover, one in four in an HMO didn't know that
    their choice of physicians was limited.

33
Patients Bill of RightsEnrollment
  • Prohibit managed care plans from refusing to
    enroll patients with preconditions.

34
Patients Bill of RightsPatient Information
  • Publish managed care plans performance ratings.
  • Establish and inform members of grievance
    procedures.
  • Ban physician gag clauses in contracts.

35
Patients Bill of RightsMandated Services
  • Require coverage for a 48 hour hospital stay
    after delivery and mastectomies.
  • A Hospital patient who is too sick to be
    discharged may request their case be reviewed by
    an impartial arbiter.
  • Require coverage for emergency room visits when
    there is a reasonable expectation that an
    emergency exists.
  • Guarantee patients right to be referred to a
    specialist when they require specialty care..

36
Patients Bill of RightsMandated Services
  • Permit members to seek care from providers
    outside the plan when more experienced providers
    exist for the illness.
  • Cover prescription drugs not on the plans
    approval list if the patient can show a need for
    the drug.
  • Permit members to enroll in clinical trials for
    new drugs and therapies.

37
Patients Bill of RightsIncentives
  • Prohibit managed care plans from paying bonuses
    to doctors who delay or withhold treatment for
    patients.
  • Prohibit capitation payments to family physicians
    and internists.
  • If a health plan cancels or refuse to sign a
    contract with a doctor, require the plan to
    explain its reasons. Permit the doctor to appeal
    and request a hearing. a

38
Patients Bill of RightsGrievances
  • Establish independent boards to review decisions
    to deny coverage for specific procedures.
  • Require plans to respond within three hours to a
    doctors request to extend a patients hospital
    stay.
  • Plans must rule on patient request for services
    within 14 days or 72 hours in urgent cases. They
    must respond to an appeal within 30 days or 72
    hours in urgent cases.
  • Allow patients to sue their managed care plan
    when medical benefits are improperly denied.

39
The Changing Face of Managed Care
  • Broader and more inclusive provider networks
  • Elimination or modification of Gatekeepers
  • Reintroduction of prior authorization
    requirements for selected services
  • Expanded investment in disease and case
    management
  • Increased consumer cost-sharing and introduction
    of consumer-directed plans
  • Capitated payment arrangement with providers
    scaled back or eliminated

40
Questions
  • How much control over access to specialized care
    and clinical decisions should the managers of
    managed care be able to exercise?
  • How much autonomy should physicians have
    in Setting fees? Ordering diagnostic
    procedures? Referral of patients to
    specialists? Ordering hospitalization?
    Enrolling patients in experimental
    therapies?

41
Questions
  • What is the quality of care delivered by NPs and
    PAs compared to care delivered by MDs?
  • Does the substitution of lesser trained personnel
    for RNs adversely affect the quality of care?

42
Heart Attack Death Rate Higher In HMOs
  • Health Maintenance Organization (HMO) enrollees
    with cardiac disease are twice as likely to die
    after a heart attack as those with traditional
    fee-for-service coverage, says cardiologist Paul
    Casale in a report to the American Heart
    Association.

43
Heart Attack Death Rate Higher In HMOs
  • Casale studied 4,000 heart attack patients
    admitted to Pennsylvania hospitals in 1993.
  • He found HMO patients are less likely to receive
    two surgical procedures common after heart
    attacks -- heart catheterization and angioplasty.
  • However, Casale's study did not have data on how
    long patients waited to get care -- considered
    the best predictor of heart attack survival
    rates.
  • But Casale notes that HMO policies discouraging
    emergency room use could have delayed patients
    seeking treatment.
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