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PubMed1994

The effectiveness of health care cost management strategies: a review of the evidence.

This Issue Brief discusses the evolution of the health care delivery and financing systems and its effects on health care cost management and describes the changes in the health care delivery system as they pertain to managed care. It presents empirical evidence on the effectiveness of managed care and concludes with an analysis of the potential of future health care reform to influence the evolution of the health care delivery system and affect health care costs. Between 1987 and 1993, total enrollment in health maintenance organizations (HMOs) increased from 28.6 million to 39.8 million, representing an additional 11.2 million individuals, or 4 percent of the U.S. population. At the same time, new forms of managed care organizations emerged. Enrollment in preferred provider organizations increased from 12.2 million individuals in 1987 to 58 million in 1992, and enrollment in point-of-service plans increased from virtually none in 1987 to 2.3 million individuals in 1992. In addition, the percentage of traditional fee-for-service plans with some form of utilization review increased to 95 percent in 1990 from 41 percent in 1987. Measuring the effects of the changing delivery system on the costs and quality of health care services has been a difficult task, resulting in considerable disagreement as to whether or not costs have been affected. In a recent report, the Congressional Budget Office recognizes two new major findings. First, managed care can provide cost-effective health care at a level of quality comparable with the care typically provided by a fee-for-service plan. Second, independent practice associations can be as effective as group- or staff-model HMOs under certain conditions. In the future, we are likely to see a continued movement of Americans into managed care arrangements, an increase in the number of physicians forming networks, a reduction in the number of insurers, an increase in the number of employers joining coalitions to purchase health care services for their employees, and a health care system that is generally more concentrated and vertically integrated.

Cost Control↗

PubMedDate not supplied

Capitation: strategies for success with managed care contracts.

With enrollments in HMOs increasing at double digit rates, independent practice associations, integrated medical groups, hospitals and specialty networks are experiencing a substantial increase in the share of their business paid for through capitation. Experience has shown that once one contract is signed, many are sure to follow. Providers must make sure each contract signed is financially sound for the organization. Then they must be able to manage and monitor contracts long after the ink is dry. This column provides a brief overview ad list of pointers for organizations moving into the managed care arena.

Capitation Fee↗

PubMed1997

Hone your management skills for risk sharing.

This article is the first of two regarding capitation contract management. In this installment, we examine the factors that affect financial performance under a capitation agreement and how technology can play an important role in improving profitability. In part two, we will explore the range of new information-gathering needs a medical group, independent practice association, or physician-hospital organization (PHO) must consider under capitation and what kinds of internal systems need to be put in place to manage the contract.

Capitation Fee↗

PubMedDate not supplied

CHIPS: a health care system for the future.

The Comprehensive Health/Integrated Provider System (CHIPS) is a vertically integrated care delivery model that enables hospitals to maintain or increase market share by sponsoring the widest possible range of health-related services. These include long-term care, dental care, fitness promotion, sleep disturbance therapy--virtually any service that can be incorporated in a system of providers. The CHIPS model can be modified to focus on a specific segment of the population rather than attempting to serve as many people as possible. This focus could be based on geographic considerations or on some demographic or health characteristic of the targeted population segment. Three basic strategies are available for choosing CHIPS locations. Providers can be consolidated in a single campus, or a loose network of services can be scattered throughout the area. Midway between these two strategies is the satellite approach, whereby CHIPS providers offer their services shopping center-style in one or more locations; this approach could be used either in addition to or instead of the campus strategy. A CHIPS may establish financial links with its patients through such insurance models as prepaid group practices or health maintenance organizations based on independent practice associations. Such links can provide significant price advantages on insured items sold to patients without exposing the hospital to antitrust liability. Other advantages of a CHIPS are that it can build patient loyalty (its chief purpose) and strengthen ties with the medical staff.

Catchment Area, Health↗

PubMed1986

HMOs and PPOs in review.

The growth of health maintenance organizations (HMOs) and preferred provider organizations (PPOs) has continued in the past 3 months, marked by both an increase in numbers and enrollment. Independent practice associations (IPAs) have taken the lead as the dominant model type. The intensified activity and growth in HMOs have resulted in considerable discussion centering on cost containment and quality of care issues. Employers, enrollees, the Health Care Financing Administration, and the HMOs, each with its own vested interest in these issues, attempt to resolve the conflicts between the cost and quality of healthcare in prepaid plans.

Cost Control↗

PubMed1987

Guidelines for physician contracting with alternative delivery systems.

The rapid proliferation of alternative healthcare delivery systems--particularly health maintenance organizations (HMOs) and preferred provider organizations (PPOs)--means that physicians contemplating participation in one of these entities must obtain, at the least, information about the group's ability to operate efficiently and effectively. For physicians who are contracting directly with a specific HMO, PPO, or independent practice association (IPA), issues that are relevant in all situations include termination, submission of data, discipline procedures, no solicitation covenants, arbitration clauses, rights to discontinue treatment, use of consultants, compliance with state and federal laws, and exclusivity.

Contract Services↗

PubMed1987

Growth of HMOs challenges traditional health care.

Health maintenance organizations (HMOs)--a method of prepaid health care delivery guaranteeing all medical care for a fixed monthly payment--are growing rapidly and presenting traditional medical institutions with increased competition. Hospital must respond with their own HMOs or insurance plans or risk a loss of profits. The basic types of HMOs are structured in three ways: the staff model, in which the HMO owns or leases its facilities and directly employs health care professionals; the independent practice association in which the HMO retains private physicians who maintain their private practices and care for subscribers at their own offices; and the prepaid group health organization, in which the HMO contracts with the physicians to provide services to its subscribers. Although it may be difficult for a hospital to form an HMO because of the capital and expertise required, national hospital alliances can provide developmental assistance in terms of marketing sales, and management experience. For consumers, the major advantage of HMOs is a more reasonable cost, but some have expressed dissatisfaction with access to care and are reluctant to give up their own physician. Physicians benefit from HMOs because they are relieved of some administrative tasks and have better access to ancillary personnel and services. On the other hand, physicians' income may be limited, and HMO participation may adversely affect their relationships with patients and their practice patterns. Financers of HMOs benefit from lower administrative and health insurance costs and the opening of new markets, but this may pose new problems such as a need for expertise in a new area and loss of the insured person's confidence if the venture does not work.

Economic Competition↗

PubMedDate not supplied

Health educators in HMOs: a study of utilization and effectiveness.

This study examined the status of health educators in Health Maintenance Organizations (HMOs). Specifically, the investigation described the utilization of health education personnel in HMOs, the way in which health education services were provided, and the effectiveness of health educators in HMOs as perceived by HMO administrators. Data from a national study showed that health educators were employed by all HMO types except Independent Practice Associations. Health education services tended to be provided in-house rather than through contractual services. HMO administrators were generally favorable toward the presence of health educators in their organizations and were satisfied with their performances, believing that they were cost effective and well educated for their position. The belief that health educators could be better utilized if they possessed additional skills apparently existed.

Allied Health Personnel↗

PubMed1980

Cost containment through risk-sharing by primary care physicians: a history of the development of United Healthcare.

A new type of independent practice association has been organized to encourage primary care physicians in private practice to become coordinators and financial managers for their patients' medical care. Each patient chooses one internist, family or general physician, or pediatrician and must be referred by that physician for all specialized care. The primary care physician authorizes payment from his/her own account for hospital and referral care provided to patients. He or she shares any deficit or surplus remaining at the end of the year. This is a background paper detailing the history of development and specific features contained in this new concept of putting the physician in charge and "at risk" for the costs of medical care to his/her patients. The plan has been operating in northern California, Washington, and Utah and has 40,000 members and 750 participating physicians. This historical background paper is part of a large project--State Employees' Insurance Benefits Utilization Study (SEIBUS) being done by the University of Washington School of Public Health to evaluate use and costs of medical care under this innovative plan.

California↗

PubMedDate not supplied

The evolving role of the medical director.

A medical group, be it under one roof, as a single or multispecialty group, or in separate offices, as an independent practice association, develops with the size and make-up of its patient base. In this article we document the growth of selective contracting by third-party payers with medical groups in California and discuss the implications of these trends on the structure and management of medical practices. Specifically, we focus on the emerging role of the medical director.

California↗

PubMed1998

Where is the financial safety net for managed care physicians?

OBJECTIVE: Empiric research on mechanisms by which managed care physicians attempt to mitigate financial risk is lacking. We assumed the perspective of a managed care plan in investigating the relationship between risk sharing and the match between a physician's capitation payments and costs of care. DESIGN: The study design was a family of payment simulations using 2 years of managed care claims data. METHODS: Claims from a cohort of 82,525 managed care patients were used, with year 1 data determining a capitation rate for year 2 primary care services. The net provider payment in year 2 was examined under scenarios that might modify financial outcomes, including stop-loss insurance, age- and gender-adjustment of capitation, and risk pooling within independent practice associations. RESULTS: The size of a provider's patient panel was positively correlated with net per capita payment (r = 0.22; P < 0.0001 without risk modification strategies). The variance of the ratio of net to total revenue was utilized as a proxy for the degree of risk assumed in caring for a panel of capitated enrollees. Risk modification strategies reduced this variance measure, with risk pooling producing the largest effect, especially for providers of panels of fewer than 135 patients. In contrast, age- and gender-adjustment of capitation payments had little effect on reimbursement outcomes. CONCLUSIONS: Short of increasing the pool of capitated patients, risk modification strategies appear limited in their ability to produce more equitable reimbursement to providers with small patient panels. With many providers assuming substantial risk in pursuing managed care contracts, these dynamics may favor organizational forms of medical practice that facilitate large patient panels within a single plan.

Capitation Fee↗

PubMed2000

The economic burden of congestive heart failure in a managed care population.

OBJECTIVE: To examine the economic burden of and treatment patterns for congestive heart failure (CHF) in a managed care population. STUDY DESIGN: Retrospective review of medical and pharmacy claims. PATIENTS AND METHODS: We reviewed integrated medical and pharmacy claims data from 6 independent-practice-association model health maintenance organizations to identify patients diagnosed with CHF. Of the approximately 1.4 million people enrolled in these managed care plans during the study period (January through December 1994), a total of 2777 patients (mean age, 56.9 years) met the study criteria, which included diagnostic codes for CHF and claims eligibility of at least 1 year. We reviewed the charges incurred by patients diagnosed with CHF for the 6 months after the initial CHF medical claim. We also examined the treatment received by each of these patients. RESULTS: During the study period, 378 of the 2777 patients with CHF (14%) were admitted to the hospital at a cost of almost $3 million (an average of $7863 per hospitalized patient). Seventy-eight percent of the study population received prescription drugs, at an average per-patient cost of $942. The most commonly prescribed drug class was angiotensin-converting enzyme inhibitors, prescribed for 38% of patients. Calcium channel blockers were prescribed for 33% of patients, but beta-blockers were prescribed for only 18% of patients. Hospitalization accounted for 54% of the total cost for CHF treatment, with prescription drugs accounting for 38%. CONCLUSION: Congestive heart failure represents a significant financial burden within a non-elderly managed care population. Improved management of the condition is needed to reduce the morbidity and mortality, as well as the costs of treatment, associated with CHF. Considerable data indicate that drugs such as beta-blockers and angiotensin-converting enzyme inhibitors can significantly decrease the morbidity and mortality of CHF. Further investigation is needed into whether increased use of prescription pharmaceuticals may reduce hospitalization rates and overall costs for CHF in this setting.

Aged↗

PubMed2000

Tracking managed care: the importance of a cash incentive for medical director response to a survey.

OBJECTIVE: To assess the impact of a monetary incentive in a survey mailed to medical directors of large medical groups and independent practice associations (IPAs). STUDY DESIGN: Mailed survey. METHODS: We mailed a survey to the medical directors of all medical groups and IPAs contracted with Blue Cross California Care, a large California managed care health plan (n = 174). After 2 mailings without any monetary incentive, we included a $50 bill in the third mailing to increase the response rate. RESULTS: Only 46 medical directors responded to the first and second mailings (response rates of 17% and 13%, respectively). The third mailing, which included a $50 bill attached to the front of the survey, yielded 78 responses (66%), for an overall total of 124 (76%). We found no significant differences in the physician organizations of medical directors who responded to the mailing with the $50 incentive compared with the physician organizations of those who responded to 1 of the first 2 mailings, although medical directors who responded without the financial incentive were more likely to report that their organization had staff for quality assurance (96% vs 82%; P < or = .03). CONCLUSION: Including a $50 bill improved the rate of response to a survey mailed to medical directors from 13%-17% to 66%.

Aged↗

PubMedDate not supplied

Identification of criteria for a report card to evaluate clinical laboratory testing services.

Report cards increasingly are considered useful to evaluate health-care services. Identifying important criteria to stakeholders of clinical laboratory testing services is the first step in the development of a report card to evaluate such services. The purpose of this study was to identify and examine criteria important to two stakeholders of these services. Three phases of data collection were conducted: 1) structured telephone interviews, 2) a modified two-round Delphi study, and 3) a verification survey of hospital laboratories that purchase reference laboratory testing services and Independent Practice Associations (IPAs) and Preferred Provider Organizations (PPOs) that purchase clinical laboratory testing services. Fifteen of 20 (75%) criteria from the verification survey were ranked between very important and essential by hospital laboratory and managed care organization purchasers. Eleven of 15 (73.3%) criteria were common to both purchaser groups. Six of 11 (54.5%) criteria from the service dimension were the most prevalent. In addition to quality, stakeholders consider criteria for service, access, and cost important. Combining the criteria identified by these two groups serves as the basis of a report card to evaluate these services.

Attitude of Health Personnel↗

PubMed2003

What do physician recommendations of health plans mean?

OBJECTIVE: To examine what determines physician recommendations of health plans and whether their recommendations reflect experiences with specific plans. STUDY DESIGN: Cross-sectional mail and telephone survey. PARTICIPANTS AND METHODS: A sample of 11453 physicians was surveyed from November 2000 to early 2001, and 3798 (2105 generalists, 1693 specialists) responded. After adjusting for ineligibles and duplicates, the response rate was estimated to be between 41% and 45%. Physician respondents were from 23 health plans in 5 regions: Florida, New York, Colorado, Pennsylvania, and Washington. Plans included those serving commercial, Medicare and Medicaid populations and represented group/staff type HMOs, independent practice associations, and preferred provider organizations. Measurements included self-reported experience with 9 health plan care management strategies and ratings of managed care beliefs and satisfaction with pay. Physicians were asked about their willingness to recommend the health plan to a family member or friend, to people with serious illnesses, or to other physicians. RESULTS: Physician recommendations of a health plan were associated with the health plan's care management activities and with the physician's generalized beliefs about managed care and satisfaction with pay. CONCLUSION: Physician health plan recommendations can reasonably be interpreted as partially reflecting physician experiences with specific plans. Therefore, they can play a role in helping purchasers and consumers compare health plans.

Adult↗

PubMed2003

Physicians' reports of their experience with health plan care management practices.

OBJECTIVE: To determine the availability of care management practices in various practice settings, the degree to which physicians report that these practices are useful, and whether physicians' reports vary by their relationships with health plans. STUDY DESIGN: Cross-sectional survey. PARTICIPANT: In 2001, we surveyed generalist and specialist physicians serving commercial, Medicaid, and Medicare patients. This report focuses on the responses of 2134 physicians (1252 generalists, 882 specialists) who contracted with independent practice associations and preferred provider organizations. MEASURES: Physicians were asked about the availability, accuracy, and usefulness of specified care management practices. The responses were analyzed according to their relationships with their health plan. RESULTS: Generalists, physicians with a higher percentage of health plan patients, and physicians who reported that health plans sought their views were more likely to report that they used care management practices. The majority who used these practices found them somewhat or very useful. Guidelines and disease management were among the most commonly available and most highly rated care management practices. Physicians' ratings of the usefulness of practice reports were associated with their perceptions of the reports' accuracy and with whether health plans sought their views on other aspects of the care management process. CONCLUSION: The stronger a physician's relationship with a health plan, the more positive the physician's experience with care management practices and policies was. The concordance between the types of available practices and physicians' ratings suggests that health plans and physicians agree about how to improve the quality of care.

Adult↗

PubMedDate not supplied

[Nursing practice in family medicine groups and its interdisciplinary context].

Nursing practice in family medicine groups (FMGs) is a major issue in the implementation of this new healthcare organization model in Quebec. Using a constructivist qualitative research approach, a case study of a FMG in a region of Quebec looked at how the partners involved in the project defined nursing practice, and highlighted the similarities and differences in their views. The results of this study show that nursing practice as a concept is perceived in two different ways: independent practice, associated with the recognition of nurses' potential, and interdisciplinary collaborative practice. Nurses view nursing practice from a client-base approach, whereas doctors view it from the perspective of how services are organized. The study found that trust is the fundamental element that makes interdisciplinary collaboration possible.

Adult↗

PubMed2005

Determinants of compliance with statin therapy and low-density lipoprotein cholesterol goal attainment in a managed care population.

OBJECTIVE: To identify determinants of medication compliance and low-density lipoprotein cholesterol goal attainment. STUDY DESIGN: This retrospective analysis used claims data from a large, national, employment-based independent practice association database. Subjects were identified based on the existence of a filled prescription for statin therapy between April 1, 1999, and June 30, 2001. Subjects had to be 18 years or older, continuously enrolled in the health plan for 2 years, and new users of statin therapy. METHODS: Multivariate logistic regression models were used to identify predictors of compliance and goal attainment in high-risk subjects. RESULTS: As the mean copayment for statins increased, there was a decrease in the likelihood of compliance. Of the subjects with laboratory results, 50.7% attained their low-density lipoprotein cholesterol goal level established by National Cholesterol Education Program Adult Treatment Panel III guidelines. Older individuals and men were more likely to reach their low-density lipoprotein cholesterol target goal, as were individuals who were compliant with their statin therapy. CONCLUSIONS: Compliance with statin therapy in the managed care setting remains poor. Of particular concern is the lower level of compliance among women and younger high-risk patients, along with patients who have fewer outpatient visits associated with hyperlipidemia and lower incidences of cholesterol testing.

Aged↗