Managed Care

1
Managed Care

• Chapter 19
• Dr. Tracey Lynn Koehlmoos

2
Defining Managed Care

• Ill-defined, ill-applied and overused term.
• Patient utilization and provider practices are
  managed by an entity with a fiduciary interest in
  the interaction between the two.

3
Back in the Old Days

• Access to care increased 1960s
• Employers and Federal Govt--payors
• Consumers choice of provider, unrestricted
• Providers choice of services, FFS
• Managed care (pre-paid healthcare) served a small
  segment of US population

4
Paul EllwoodThe Father of Managed Care
5
Rise Fall of Managed Care

• HMO Act of 1973, Paul Ellwood
• 1979 start of NCQA
• 1980s, Employers focus on wellness
• 1996 HIPAA passed
• By 1997, 8.1 million Americans in some form of
  managed care
• 2000 HIPAA enacted
• 2000 Death of Managed Care ?!?

6
FFS vs. Managed Care

• Individual patient
• Acute Care
• Overservice Incentive for providers
• Unrestricted access to providers by the patient

• Population
• Disease Prevention/ Health Maintenance
• Underservice Incentive for Providers
• Barriers to providers/ Controls and restrictions

7
Forces of Change

• Sky-rocketing costs
• Need to establish cost predictions
• Societal need to account for expenditures
• Optimal vs. maximal

8
Do you know your ABCs?

• Continuum of Managed Care
• Managed Indemnity Service Plans PPOs POS Open
  Panel HMO Closed Panel
• Increasing Cost and Quality Control

9
Do you know your ABCs?

• Evaluate MCOs based on
• Set up, Provider Payment, Enrollee Incentive
• Cost Savings Mechanisms, Risk Assumption
• Alphabet Soup of Managed Care
• HMO (staff model), HMO (group model)
• IPA/Network, PPO, EPO
• POS, PSO,
• IDS (PHO, IPA, MSO)

10
Managed Care Today

• 92 of Employer Sponsored Insurance in Managed
  Care, 2002
• 60 of Medicaid
• MedicareChoice Plans on the decline
• POS fastest growing model
• Mergers, bigger MCOs
• 11 HMOs capture 50 of enrollees

11
Managed Care Pros

• 1990sslow of healthcare expenditures
• lt admissions, shorter LOS, lt tests
• Reliable Outcomes Measurements
• Best Practice Guidelines
• Reduce waste and redundancy
• Promotes prevention and promotion
• Chronic Disease Management

12
Managed Care Cons

• Phys/Hospitals working to protect economic
  interests
• Failure to arrest US health expenditures
• Physician economic survival v. patient health
• Potential under service due to short LOS
• Lack of accountability for public health quality
• Lack of developed and useful IS
• Altered core function of insurer

13
Physician Controversy!

• Gag Rules
• Physician Autonomy
• Physician Satisfaction

14
Enrollees Discontent!

• Consumer Choice
• Selection Bias
• Turnover
• Consumer Satisfaction

15
Quality and Regulation

• Quality Research HMO Indemnity
• Should we leave MC to market forces?
• Cost containment Does MC work?

16
Conclusion

• Are the cost savings days over for good?
• Is Managed Care Dead or just evolving?