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Source: Maureen McInaney
415-476-2557
04 April 2001
Physicians, employers encourage managed care organizations to improve quality of care
Physicians are assuming a stronger stance in their negotiations with managed care organizations, and employers and federal and state governments are becoming more sophisticated about promoting and rewarding high quality care, according to UCSF researchers who have summarized the evolution of managed care in the United States.
"In an effort to improve consumer confidence, managed care organizations are now being challenged to emphasize quality in addition to cost controls," said Adams Dudley, MD, MBA, UCSF assistant professor of medicine and co-author of the paper called Managed Care in Transition. The paper appears in the April 5 issue of the New England Journal of Medicine in a new series called Health Policy 2001.
"For their part, physicians are demanding that capitation contracts provide sufficient resources to allow them to focus on prevention, early diagnosis, and coordinated care initiatives such as disease management programs - rather than episodic provision of services," he said. He explained that disease management programs (multidisciplinary teams that coordinate care across services) are intended to reduce errors, keep costs lower, and help providers deliver better continuity of care for patients.
One of the primary strategies physicians now use to counterbalance the purchasing power of managed care organizations is to affiliate with each other, said the researchers. The number of physicians in solo practice has declined significantly in the last two decades, while the proportion of young physicians who enter practice as the employee of a medical group or an HMO has increased from one-third to two-thirds, said Harold Luft, PhD, director of the UCSF Institute for Health Policy Studies and co-author of the paper. In addition, physician-hospital organizations have been created either to accept global capitation (a contract in which the insurance company sends one check for a set per-member, per-month fee, regardless of the amount of service provided) or ensure hospitals a steady stream of admissions. However, differences in cultures between medical groups and hospitals have limited the growth of these combined organizations, said to Luft.
Employers have also turned to collective action in the drive to improve quality of care, said the researchers. The Leapfrog Group is a national coalition that includes more than 65 Fortune 500 companies. The group is trying to use its leverage to foster community-wide improvement in the quality of care. The paper cites Leapfrog's involvement with the Michigan Health and Safety coalition, which includes hospitals, health plans, medical groups, employers, unions, and government agencies. "Leapfrog is collaborating with the Michigan Coalition to improve the safety of hospitalized patients and to inform patients and providers about issues involving safety," said Dudley. In addition, employers are less tolerant of managed care organizations that enroll only healthy patients and get rid of sick ones. Some employers are adjusting the premiums they pay to plans, lowering them for plans that have only healthy enrollees and raising them for plans willing to take on the sickest patients, he added.
Some employers are creating direct incentives to improve quality of care. The Central Florida Health Care Coalition, for example, plans to rate the quality of inpatient and outpatient care provided by physicians. The coalition will allow its members to select any physician, but co-payments will be lower if they select providers with high ratings for quality of care.
The UCSF researchers noted that health care is not being transformed in isolation. Health care organizations are using the Internet to disseminate data to patients. For example, the Medicare website can show patients statistics about the quality of care provided by each of the managed care organizations participating in the Medicare program in each patient's zip code. "Furthermore, the cost of an Internet-based system of medical records is falling, making it possible to collect and audit data on quality and risk adjustment less expensively. Thus, the cost of providing incentives for managed care plans to improve the quality of care is falling as well," said Dudley.
In addition to citing the above trends, the paper traces the development of managed care from the 1960s to the present - highlighting not just changes in the financing of health insurance, but also changes in the way medicine is practiced.
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