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OCR for page 13
Public Health and Managed Care
In the past decade, there has been substantial growth in organized health care
delivery systems in most parts of the United States. Managed care organizations,
the most common form of these systems, can be defined as "any system that is
under the management of a single entity that (1 ) insures members-either by itself
or through an intermediary, (2) furnishes covered benefits through a defined
network of participating providers, and (3) manages the health care practices of
participating providers" (Rosenbaum and Richards, 1996~.
Public health practice is sometimes thought of as separate from, or
complementary to, the delivery of personal health services. A more helpful
distinction is between personal health services and community interventions.
Personal health services involve a one-to-one interaction between a provider and a
patient (IOM, 1993~. Personal health services are delivered primarily by private-
sector organizations, but in many communities, governmental health departments
provide many of these services, especially for disadvantaged populations.
Community interventions aim to alter the social or physical environment to
change one or more health-related behaviors or to directly reduce the risk of
causing a health problem. Community-based services are usually carried out by
public health agencies, other government agencies, or community-based voluntary
organizations. The provision of personal health services per se, even if they are
delivered in the community rather than in health care settings, is not a
community intervention. Outreach or community-based activities intended to
improve access to personal health services or their utilization, however, are
included. Public health agencies are often challenged to provide both types of
services, but community organizations frequently help the public health agency
13
OCR for page 14
14
HEALTHY COMMUNITIES
achieve a public heal objective In a community (Box 1~. Private heal service
organizations sometimes sponsor outreach activities such as mass screening arid
heals fairs (at times win commercial Interests), with and without a public heals
agency's involvement.
BOX 1. Overcoming Barriers to Immunization: An Example for Public Health
In 1992 the 16,000 members of the Florida District of Kiwanis International formed
a partnership with the Department of Health and Rehabilitative Services' (HRS's) State
Health Office Immunization Program to help increase immunization levels in the
preschool population. As part of their "Young Children: Priority One" major initiative,
the Florida District Kiwanis made an eight-year commitment to be lead volunteer agency
assisting in implementing Florida's Immunization Action Plan. This flare provides
objectives to raise the immunization rates of Florida's two-year-olds to 90% by the year
2000. At the time of the formation of the partnership, only 63% of Florida's two-year-
olds were up to date with their immunizations. Since the HRS-Kiwar~is partnership was
formed four years ago, the immunization levels have increased by 27%.
The Kiwanis have donated many thousands of volunteer hours in immunization
clinics and have organized coalitions, recruited other community groups, and purchased
computer equipment, vans, and educational materials. With the Kiwanis's help, Florida's
67 county public health units have increased their clinic hours, opened new clinic sites,
extended service times and added locations, arranged transportation services for low-
income clients, and coordinated services with other agencies to reach more children.
Because of this partnership, more of Florida's young children are protected against
vaccine-preventable diseases now than at any other time in the state's history. The 1995
Survey of Immunization Levels in the two-year-old population indicated that an
unprecedented 80% of Florida's two-year-olds are immunized. Much of the increase can
be attributed to the Kiwanis's leadership in volunteer efforts.
This partnership has helped reduce the dangers that exist when society fails to
immunize its children. For example, the number of measles cases in Florida had nearly
doubled, from 322 cases in 1989 to 603 cases in 1990. Two of the cases occurred among
unvaccinated preschool children. In 1995, there were 14 confirmed measles cases in
Florida. Through this partnership, the Kiwanis, the county public health units, and the
immunization program office have set an example that demonstrates the positive benefits
that result when a community-based partnership works together to donate time, energy,
and resources to improve the health of Florida's children.
SOURCE: Based on information provided by Charles Mahan, Dean of the University of
South Florida College of Public Health (former director, Florida State Department of
Health and Rehabilitative Services), 1996.
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PUBLIC HEALTH AND MANAGED CARE
15
An estimated 90 million insured Americans are enrolled in managed care
plans, including more than 25% of Medicaid beneficiaries and 10% of Medicare
beneficiaries (Rosenbaum and Richards, 19961. Most of the growth in enrollment
has occurred in recent years. Between 1988 and 1993, the percentage of
employees enrolled in a managed care plan increased from 29% to 51% (Gabel et
al., 1994~. In the Medicaid program, the growth has been even more dramatic as
states have requested waivers from the Health Care Financing Administration
(HCFA) to shift their Medicaid populations into managed care arrangements.
Between 1993 and 1994, the number of Medicaid beneficiaries in managed care
increased by 63%, from 4.8 million to 7.8 million (Kaiser Commission, 1995~. The
factors contributing to the growth in managed care are the rising costs of personal
health care and an interest among employers to find ways to control providers and,
therefore, to control costs (Rosenbaum and Richards, 1996~. States have also used
managed care arrangements as a way of containing spiraling costs in the Medicaid
program and of trying to improve access to care (Kaiser Commission, 1995~.
STRENGTHS AND WEAKNESSES OF
MANAGED CARE FOR PUBLIC HEALTH
Managed care offers opportunities for public health (CDC and GHAA, n.d.;
Baker et al., 1994; HRSA, n.d.) but it also poses challenges. In the discussions
initiated by the Public Health Committee, proponents of managed care have
argued that its goals and tools are consistent with public health. Many public
health professionals, on the other hand, have also indicated concern about
managed care organizations' motives and ability to deliver on Heir promises. The
committee's view, as developed in this section, is that if the proper kinds of
partnerships between managed care organizations and governmental public health
departments are developed, managed care can indeed make an important
contribution to improving the health of the public.
Accountability, Responsibility, and Quality
Because it is responsible for delivering care to a defined group of enrollees,
managed care makes possible, for the first time, accountability in terms of quality
of care for populations, including access to care and heals outcomes. This is
possible because managed care organizations can monitor the health outcomes of
enrollees and examine their use of services. However, this is not regularly done.
Some managed care organizations, especially large staff-model managed care
organizations, are using their data systems to track the health oftheir enrollees, but
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16
HEALTHY COMMUNITIES
many managed care organizations do not collect the types of information needed
for surveillance and epidemiologic studies. There have been a number of attempts
to assess the quality of care offered by managed care organizations. The National
Committee for Quality Assurance (NCQA), which accredits managed care
organizations, has developed the Health Plan Employer Data and Information Set
(HEDIS), a set of performance measures for managed care organizations designed
to meet employers' and government purchasers' needs for information about the
value of services they purchase and to systematize the measurement process
(NCQA, 19939.
The data systems maintained by some managed care organizations are an
important tool for improving performance and maintaining accountability, and
simply by having performance monitoring systems, these organizations compare
favorably with fee-for-service delivery systems or indemnity insurance companies
that typically have no data with which to monitor performance. The committee
heard of instances in which a managed care organization's performance in terms
of provision of preventive services, for example was criticized based on the
organization's own data, with the implicit assumption that other providers do
better. Such assumptions may well be incorrect and are unfair because they cannot
be checked unless the other providers have appropriate data systems. Experience
suggests that performance monitoring as a basis for punishing those who are not
producing as expected is not an effective way to alter behavior and improve
outcomes. Rather, performance monitoring should be used to encourage
productive action and broad collaboration (Berwick, 1989; IOM, in press).
Population Orientation and Prevention
Managed care's responsibility for a defined population gives it an interest in
promoting health and preventing disease in that population, which is the mission of
public health. Both managed care organizations and governmental public health
agencies have a philosophical emphasis on promoting health and preventing
disease. Both address prevention and health promotion in a defined population.
However, in actual practice, some managed care organizations seem more
concerned about efficiency and controlling short-run costs than about prevention
or the health status of their members. Governmental public health agencies have a
geographic perspective and are accountable to the people within their jurisdiction
while many managed care organizations focus on their current enrollees, an ever-
changing group, who may only be a subset of the population. Committee
discussions suggested that in the long term, it is important for managed care
organizations to think more broadly and to promote health in the whole
community because anyone may be their enrollee in the future (Box 2~. In a
OCR for page 17
P UBLIC HEAL TH AND At4NA GED CARE
17
capitated system with limited turnover, some prevention activities might result In
larger filture profit margins. Unlike public heals agencies, managed care
organizations are primarily accountable to purchasers, subscribing employers,
large groups of payers, and ultimately weir stockholders or trustees. As managed
care organizations respond to public demands for accountability, more should find
ways to measure the quality of services Hey provide. A focus on heal outcomes
and prevention objectives, as some organizations which have adopted HEDIS and
other performance measures have done, would help.
BOX 2. Group Health Cooperative of Puget Sound
Group Health Cooperative of Puget Sound is a large, nonprofit health maintenance
organization (HMO) that was established in 1947. It has approximately 540,000
enrollees, of whom about 80,00090,000 are enrolled in the Medicare and Medicaid
Basic Health Plan. The cooperative has been involved in community-based health for
more than 50 years. Its public health focus grew out of 10 years of involvement with
public health in community issues and priorities such as AIDS prevention.
In 1992, Group Health adopted a vision statement that calls for delivery of quality
health care to the whole community, not just its enrolled population. They also adopted
a set of community service principles to recognize the work that Group Health had been
doing in the community in the area of health promotion and disease prevention. They
currently focus their attention on four areas: (1) childhood immunization, (2) the
reduction of infant mortality, (3) health care for homeless families, and (4) the reduction
and prevention of interpersonal violence. In their community-based programs, Group
Health has gone beyond just providing immunization and preventive clinical services to
issues that deal with changing social norms, such as violence and alcohol abuse. Group
Health is also working with the State of Washington on surveillance issues to improve
their performance measurements and develop more integrated information systems.
Group Health considered several factors in implementing its community programs.
Improving community health in general is expected to lead to improved health for the
members of Group Health as well. Involvement in community-based programs also
helps Group Health compete for contracts with large employer groups and with Medicaid
and Medicare populations. In addition, community service programs help to encourage
innovative approaches to providing services to the patient population.
SOURCE: Based on a presentation by William Berry, director, Center for Health
Promotion, Group Health Cooperative of Puget Sound, at the February 22, 1996,
meeting of the Public Health Committee.
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18
HEALTHY COMMUNITIES
Personal Health Services for Vulnerable Populations
As managed care organizations enroll increasing numbers of people from
disadvantaged groups, the biggest challenge for public health agencies is in the
area of providing personal health services for poor and vulnerable populations.
Public health agencies, primarily at the local level, have played an important role
in providing health care services to both Medicaid-eligible and uninsured and
underinsured population groups. For example, they provide maternal and child
health services, sexually transmitted disease (STD) services, and tuberculosis
services. For certain services, issues of expertise or confidentiality would suggest
that public health agencies are the appropriate entities to continue to provide these
services (Frieden et al., 1995; IOM 1996), so local public health agencies must
maintain this capacity. As more states shift their Medicaid enrollees into managed
care, public health agencies have the option of trying to obtain contracts with
managed care organizations, but many are ill-equipped to compete for and
negotiate with health plans (Lipson and Naierman, 1996~. Many issues of
language, culture, tradition, class, race, and ethnicity need to be taken into account
when providing services to especially vulnerable populations. Perhaps the most
serious aspect of this problem is providing services to those who are covered by
neither insurance nor Medicaid and who are especially vulnerable.
As many cities and counties move to privatize public hospitals, which have
traditionally served vulnerable populations, they will have to consider whether and
how managed care organizations fill this role and how the delivery of care to the
underinsured and uninsured will continue. Individuals who are eligible for
Medicaid but unfamiliar with managed care organizations may not understand
how to access needed services. A strategy of partnering with both governmental
public health agencies and community-based organizations, which have the skills
and experience needed to work effectively with these vulnerable populations,
could strengthen the entire health system's response to the needs of these special
populations.
Many state Medicaid agencies do not have the management skills to
monitor the performance of managed care organizations or to write appropriate
contracts with these organizations (Box 3~. Competitive cost-cutting pressures
coupled with vulnerable populations may result in opportunities for health care
plans or providers to take advantage of poor patients. The problem of turnover
of patient population as enrollees lose and regain their eligibility for Medicaid
also contributes to serious problems of continuity of care.
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PUBLIC HEALTHAND MANAGED CARE
19
BOX 3. Medicaid Managed Care
The move toward managed care for Medicaid patients offers promise for improving
health outcomes arid solving potential problems. The promise is due to the shift inherent
in managed care toward interest in the health of defined populations. This facilitates the
use of public health assessment tools (e.g., epidemiology), strategic thinking about
efficient ways to improve the health of populations, and opportunities to undertake
activities focused on disease prevention.
Problems that may occur during this transition to Medicaid managed care include
(1) personal health services traditionally carried out by public health departments (i.e.,
prenatal care, immunization services, family planning arid sexually transmitted disease
[STD] clinics, and Early and Periodic Screening, Diagnosis, arid Treatment [EPSDT])
will not be completely transferred to a managed care organization; (2) poor people who
are eligible for Medicaid but are unfamiliar with managed care organizations may not
understand how to access needed service; (3) marry state Medicaid agencies do not have
the management skills to monitor the performance of managed care organizations or to
write appropriate contracts with them; and (4) competitive cost-cutting pressures coupled
with vulnerable populations and weak oversight may result in some unscrupulous health
care providers talking advantage of poor patients.
There is a growing realization that managed care organizations need the expertise
and authority of public health agencies to undertake community-based interventions arid
perform outreach services that are necessary for maintaining the health of the populations
for which they are responsible. Public health services are also necessary in cases in
which confidentiality is art issue, such as at STD or family planning clinics.
Many public health professionals now provide personal health services, often in
community-based categorical public health clinics. Such services are the type that
managed care organizations should be able to handle, and therefore, once they are
trasfemed, there will be less of a need for health professionals with the same skills in
public health departments. There will be art increased need in both public health
departments and managed care organizations for people with public health assessment
skills arid health care management skills.
SOURCE: Presentations to the Institute of Medicine (IOM) Board on Health Promotion
arid Disease Prevention alla the National Research Council/IOM Board on Children arid
Families in joint session on June 15, 1995.
DEFINING ROLES AND RESPONSIBILITIES
Given the challenges involved in the transition to managed care, it will be
important for each community to define the roles and responsibilities of
governmental public health agencies and managed care organizations in improving
health. Depending on local conditions, public health agencies can play a variety of
roles, from serving in an advisory or regulatory capacity to obtaining contracts to
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20
HEALTHY COMMUNITIES
provide services. Managed care organizations can play a role In heal promotion
and disease prevention, disease surveillance, and promoting quality. The IOM
report The Hidden Epidemic: Confronting Sexually Transmitted Diseases (~1996~),
illustrates He opportunities and problems In He relationship between heals
department and managed care organizations in one area (Box 4~. Two recent
reports (CDC and GHAA, n.d.; Joint Council, 1996) identify a varietal of
approaches to collaboration. More generally, a new joint initiative of He
American Medical Association and the American Public Heals Association is
exploring new ways Hat medicine and public health can collaborate to Improve
health and heals care In the United States (Reiser, 1996~.
BOX 4. IOM Committee on the Prevention and Control of Sexually
Transmitted Diseases (STDs)
The Institute of Medicine (IOM) Committee on the Prevention and Control of STDs
held a workshop on November 8, 1995, to examine the role of managed care in STD
prevention and control. The national movement toward managed care coupled with
limited public funds for health programs will have a significant impact on the delivery of
services provided by public health agencies, especially those that involve many providers
and intervention points such as STD prevention and control.
There are many opportunities and challenges for managed care to address STD
issues effectively. Strengths of managed care organizations that are particularly
appropriate for this role include (1) a population-based focus (i.e., group and staff
models track disease and health trends for a population), (2) the ability to coordinate and
integrate STD services into primary care, and (3) accountability to purchasers of health
services.
Increasingly, managed care organizations are enrolling Medicaid populations whose
health care used to be provided by local public health departments. In some states,
Medicaid revenues have been a major source of funding for public health clinical
services. The absence of the revenues becomes a problem for local health departments as
well as for community-based health clinics that have been providing services.
Nevertheless, local health departments report that many persons with health insurance
continue to use public health clinics, local health department STD clinics, or other clinics
outside of their health plan for STD-related services.
! OURCE: Presentation by Richard Brown, member of He IOM Committee on the
Prevention and Control of STDs, at the February 22, 1996, meeting of the Public Health
Committee; IOM (1996).
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PUBLIC HEALTH AND MANAGED CARE
Roles for Public Health Agencies
21
With their potentially extensive knowledge of the community and its depth
and breadth of experience in fields such as epidemiology and injury prevention,
governmental public health agencies can play an important role with managed care
organizations. The Future of Public Healths analysis implies that public health
departments should work with managed care organizations, in the public interest,
as part of their assessment and assurance mandate. Their role can include
everything from offering advice about data and information systems, to developing
training and education programs, even to fostering an advocacy role (Box 5~. In
particular, governmental public health agencies can:
· provide information about the health status, risks, and determinants of
communities served by managed care organizations, which is vital for raising
awareness and setting priorities even if the jurisdictions of the health agencies do
not correspond exactly to the population covered by the managed care
organizations;
· participate with managed care organizations in planning and policy
development related to voluntary collaborative actions or regulatory policy
development;
· provide services, such as case management and enabling services, to
managed care clients; and
· assist managed care organizations with assurance and oversight when
working with state agencies with regulatory responsibility.
In carrying out the assessment function, governmental public health
agencies have a responsibility to monitor the health status of managed care
enrollees, just as for others in their communities. Similarly, governmental
agencies must ensure that members of managed care plans have access to quality
health care, and assessment results provide relevant information to carry out this
function. In conjunction with managed care, these two functions are clearly
interrelated and have undeniable costs. Managed care organizations can and
should participate in data preparation and analysis, and their data systems can
facilitate these activities. If there are to be independent checks on managed care
plans' performance, these functions must, at some level, involve public health or
other governmental agencies.
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22
HEALTHY COMMUNITIES
BOX 5. Minnesota Department of Health
Minnesota has a relatively mature managed care market and has been licensing
health maintenance organizations (HMOs) since the early 1970s. Most of the employer-
insured population is enrolled in an HMO, except in rural areas. In 1994, approximately
80% of the Twin Cities population of 2.6 million was enrolled in HMOs, Preferred
Provider Organizations, and self-funded employer plans. The State of Minnesota is a
large employer that began coordinating health services for its employees in 1989 and
joined the Buyers' Health Care Action Group (BHCAG) in 1995. BHCAG is a coalition
of 23 area employers that developed a plan to provide direct contracting with competing
health systems to develop health care systems that offer a full continuum of services;
shared financial risk with purchasers; clinical and fiscal accountability; competition on
the basis of quality, cost, and service; and commitment to community-wide quality
improvement.
In addition, Minnesota is in the process of transferring its Medicaid enrollees and
Aid to Families with Dependent Children recipients into HMOs. It plans in the event
that Congress enacts legislation that creates a block grant system for Medicaid to take a
portion of Medicaid funds and set it aside for the public health infrastructure.
Minnesota requires all HMOs to file annual action and collaboration plans. Action
plans provide information to consumers, purchasers, and the community, as a first step
toward greater accountability of health plan companies. This is intended to encourage
local discussions of the health needs of the community. The Minnesota Department of
Health is responsible for ensuring that the action plans submitted by managed care
organizations are available for review by local organizations. Collaboration plans
describe the actions that managed care organizations intend to take to achieve public
health goals for their service areas. Action plan are to be jointly developed in
collaboration with community health boards, regional coordinating boards, and other
community organizations providing health services within the service area of the
managed care organization. Managed care organizations are required to cover services
out of network in the area of STDs, AIDS, tuberculosis, and family planning.
Minnesota has a Community Health Services Act that provides the framework for
state and local partnerships in that the state delegates most core public health functions to
the local level. Community health boards submit a plan every year based upon the
community's assessment of its needs. Funds are provided from the state to the
community, based upon its needs assessment. Federal preventive health block grants are
used to hold capacity-building conferences in specific areas such as immunization, STDs,
alcohol and tobacco use, prenatal care, and violence. These conferences bring together
representatives from local public health agencies, community health providers, managed
care organizations, and other health service providers to analyze the community's needs
assessment data.
| OURCES: Based on a presentation by Anne Barry, commissioner of health of|
Minnesota, at the February 22, 1996 meeting of the Public Health Committee; National
Health Policy Forum, 1995; Minnesota Department of Health, 1 995a,b.
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PUBLIC HEALTH AND Al4NAGED CARE
Roles for Managed Care Organizations
23
Managed care organizations can also take a more active role in improving the
public's health. They can strengthen their health promotion and disease
prevention activities by integrating public health programs and services with their
primary health care activities and collaborating with public health agencies. With
public health agencies and others, managed care organizations can advocate for
measures to improve the public's health in the community. Managed care
organizations can also develop their data systems to be useful for surveillance and
epidemiologic research. Furthermore, they can continue to pave the way for
improving the quality of health care (Box 6~.
Showstack and colleagues (1996) have argued that managed care
organizations have a social responsibility to "broaden their missions from the care
of enrolled populations to include contributions to the health of the communities in
which they serve." To guide managed care organizations and judge whether they
are responsible, accountable, and responsive contributors to the community's
health, Showstack and colleagues offer the following eight attributes of a socially
responsible managed care system:
enrolls a representative segment of the general population living in the
system's geographic service area;
2. identifies and acts on opportunities for community health improvement;
3. participates in community-wide data networking and sharing;
4. publishes information regarding its financial performance and contribu-
tions to its community;
5. includes the community, broadly defined, in the governance and advisory
structures of the managed care system;
6. participates actively in health professions education programs;
7. collaborates meaningfully with academic health centers, health depart-
ments, and other components ofthe public health infrastructure; and
8. advocates publicly for community health promotion and disease prevent
. . .
Ion pot .lcles.
Local health deparDnents can organize as managed care providers and
compete with private care plans for payer contracts or they can contract with
managed care plans to provide specific services. Public health agencies can also
assert their assurance function. They can play a strong regulatory role by setting
standards, through licensing, and by monitoring the quality of services (Box 7~.
These roles, while important, will take time, skill, and initiative to develop.
Furthermore, some challenges will arise. For example, there is a potential conflict
of interest if public health departments have managed care contracts and are also
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24
HEALTHY COMMUNITIES
BOX 6. U.S. Healthcare
U.S. Healthcare is a large, for-profit company that operates in the northeastern,
middle Atlantic, and southeastern United States. It was founded 22 years ago in
Pennsylvania and uses an independent physician association model, which means that
each physician has a private practice and agrees by contract to accept U.S. Healthcare
members. U.S. Healthcare has approximately 2.5 million members, of which 130,000
are Medicare members, 87,000 are Medicaid members, and 10,000 are covered under an
uninsured children's program. Each year about 26% of the Medicaid population
disenrolls. Only 3.6% of the Medicare population disenrolls, which makes it the most
stable group.
U.S. Healthcare's responsibility for public health cuts across many of its programs.
These programs include women's health, domestic violence, primary care, and a program
that incorporates nutritional screening and interventions into medical practice. Health
educators at U.S. Healthcare developed off~ce-based programs to assist physicians
working with patients who are enrolled in programs such as smoking cessation. For
patient outreach, there are preventive care and immunization programs. Other public
health programs include (1) Challenge 1996 to immunize the Medicare population
against pneumococcal pneumonia; (2) cancer screening; (3) Medicaid's Early and
Periodic Screening, Diagnosis, and Treatment; (4) an uninsured children's program; and
(5) health education programs such as Healthy Breathing for smoking cessation, Healthy
Lifestyles to decrease stress, Healthy Eating to assist in establishing healthy eating
patterns, as well as avoiding obesity, and a fitness program. Case management is also a
part of their health care plan. Teams of nurse case managers and social work case
managers are formed depending upon the patient population.
Health plan accountability is a major issue for the company, because its
management believes it is important to make available performance measurement
information that assesses the health plan's effectiveness in providing services and to
identify areas for improvement. U.S. Healthcare has been involved in developing the
Heath Plan Employer Data and Information Set (HEDIS) and has a representative serving
on the Medicaid HEDIS committee and the Medicare HEDIS subcommittee. The
Medicare Quality report card was developed by U.S. Healthcare in collaboration with its
division, U.S. Quality Algorithms, because the Medicare HEDIS was still being
developed at the time and there were no measurements that they could use for their
Medicare beneficiary patient population.
SOURCE: Based on a presentation by Sandy Harmon-Weiss, senior vice president and
medical director, U.S. Healthcare, at the February 22, 1996, meeting of the Public Health
Committee.
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PUBLIC HEALTH AND MANAGED CARE
25
BOX 7. San Diego and Los Angeles Counties' Experience with Public Health
and Managed Care
SAN DIEGO COUNTY DEPARTMENT OF HEALTH SERVICES
The San Diego County Health Department established a Medi-Cal (California's
Medicaid program) managed care system that integrates public health functions and
services of a local health department with private-sector health plans. The Medi-Cal
managed care contract stipulates that health plans will provide services to the Medicaid
population and that the health department will administer the Medi-Cal program. The
San Diego County Health Department will be responsible for oversight and enrollment of
the program. The State Health Department will be responsible for setting local standards
and requirements in the Medi-Cal managed care contracts with managed care
organizations.
The San Diego County Health Department will certify physicians who provide
public health services for selected communicable diseases and early intervention for
children and pregnant women. It will also determine eligibility, will inform patients of
their rights and responsibilities in using health care resources, and will enroll people into
health plans. The County Health Department will also select performance standards and
provide oversight for quality improvement. Local monitoring of health indicators
calculated from reports on all health care encounters will be performed for the Medi-Cal
population. The County Health Department is also involved with providing public
health services (immunizations, home visitation, and teaching responsible parenting) to a
new child abuse center (administered by the Social Services Agency).
The County Health Department has created partnerships with representatives of San
Diego community organizations (e.g., the San Diego Chamber of Commerce, the San
Diego Taxpayers Association, the Medical Society, the Hospital Council, the Welfare
Rights Organization, and the Legal Aid Society). Representatives of these organizations
meet with the health department staff about public health policies and programs for the
community. In this way, the community is involved in the planning process of all new
public health programs.
LOS ANGELES COUNTY DEPARTMENT OF HEALTH SERVICES
The Los Angeles County Department of Health Services is also in the process of
implementing California's Medi-Cal managed care program. The department developed
a memoranda of understanding (MOW) between the Public Health Programs and Services
(PHPS) and the Personal Health Services (PHS) branches of the department regarding
provision of clinical preventive services and other services provided by PHS that have or
could have public health significance. The department also developed MOUs as a basis
of negotiation between PHPS and the health maintenance organizations in Los Angeles
County intending to participate in the state's Medi-Cal managed care program. The
Continued
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26
BOX 7. Continued
HEALTHY COMMUNITIES
MOUs cover both administrative issues and program areas detailing specific tasks and
responsibilities. The program areas included in the MOUs are family planning services,
sexually transmitted diseases, HIV counseling and testing services, immunizations,
children with special health care needs, prenatal care, child health and disability
prevention programs, arid tuberculosis.
SOURCES: Based on a presentation by Paul Simms, deputy director, Department of
Health Services, Sari Diego County, at the February 22, 1996, meeting of the Public
Health Committee; and on a presentation by James Haughton, senior health services
policy advisor, County of Los Angeles Department of Health Services, at the October 27,
1995. meeting of the Public Health Committee.
playing a regulatory role with managed care organizations. Despite these
challenges, many state and local public health departments have moved forward to
develop their abilities in the managed care marketplace.
CONCLUSIONS
There has been substantial growth in organized health care delivery systems
(which include managed care organizations) in recent years, and these
developments have important implications for the health of the public. In the
discussions initiated by the Committee on Public Health, proponents of managed
care have argued that its goals and tools are consistent with public health. Many
public health professionals, on the other hand, have also indicated concerns about
managed care organizations' motives and ability to deliver on their promises. The
committee's view, as developed in this section, is that if the proper kinds of
partnerships between managed care organizations and governmental public health
depar~nents are developed, managed care can indeed make an important
contribution to improving the health of the public.
The proliferation of organized health care delivery systems, which continue to
provide care for an increasing number of Americans, has made it possible in some
locales for governmental public health agencies to assure the provision of personal
health services entirely within the private sector. How many elements of public
health services private organizations can or should subsume remains unclear, but
they can be considerable. Providing care for the uninsured, however, remains a
challenge; governmental public health departments will be ill prepared and
inadequately funded to do so if no other personal services are being provided.
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PUBLIC HEALTHAND MANAGED CARE
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To ensure that partnerships between governmental public health agencies and
managed care organizations work effectively toward improving the health of the
public, the committee reiterates The Future of Public Health recommendation that
the function of local public health agencies should include "assurance that
high-quality services, including personal health services, needed for the
protection of public health in the community are available and accessible to
all persons...." This assurance function can be carried out "by encouraging
other entities (private or public sector), by requiring such actions through
regulation, or by providing services directly." Public health agencies can only
exercise this responsibility if they are adequately staffed, equipped, and funded for
this complex and demanding task and have appropriate relationships with health
service providers. These activities should not be undertaken at the expense of
existing essential public health services. Particular concerns arise when health
departments have a dual role: direct provision of personal health services to some
people and regulating private entities providing similar services to others. To
improve the efficiency of all health systems, health agencies and organized
health delivery systems, in conjunction with other community stakeholders,
must reach agreement on their proper roles and responsibilities, which will
vary by locale. Successful models of the integration of public health and
managed care and of joint approaches to policy development do exist and need to
be studied and tested more broadly.
Most public health agencies do not currently have the full statutory and
regulatory authority to ensure the accountability of the organized health delivery
systems to the public. In the current regulatory structure, health care delivery
systems are open regulated by insurance commissions that focus on fiscal integrity
rather than health. State Medicaid agencies, usually separate from public health
departments, also typically focus on fiscal rather than medical accountability
dimensions. Recognizing the clear need for financial oversight, governmental
public health agencies should increase their ability to oversee health care
providers, with the goal of becoming coequal partners with insurance
regulators and state Medicaid agencies, to ensure that the public's health is
addressed in the regulation of public and private health care delivery systems
(see Box 8~. In many states, additional legislative authority will be needed before
public health agencies can take on this role. This approach requires population-
based health outcome and performance standards that can be monitored, and
public health agencies should participate in the development and monitoring of
these standards.
The functions described in this report cannot be undertaken without properly
trained professionals available to all communities. Thus, public health
professionals and students enrolled in schools of public health should be
trained to work with health services organizations to ensure quality personal
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HEALTHY COMMUNITIES
health services in a community, as an essential element in providing for the
health of the public. In addition, public health agencies should actively
participate with organizations such as state health professions boards,
medical schools, accrediting bodies in planning and policy development.
BOX 8. Maryland's Alliance Between the Health Department and the Insurance
Commissioner: An Example for Public Health
Health care reform is not a new concept for the State of Maryland. Maryland's "all-
payor system" ensures equity among financing mechanism and has not only held down
hospital rates to far less than the national average, but has also maintained the high
quality of Maryland's privatized hospital delivery system. For more than 20 years,
Maryland's rate increases consistently have been less than the national average. In 1993,
HB 1359 created a special insurance program for small businesses that presaged the
current Kennedy-Kassebaum bill recently signed into law by President Clinton.
Furthermore, Maryland's experience with managed care is vast, with penetration rates
being third highest in the nation.
With pride in its health care policy formulations, Maryland recognized the
importance of creating a working relationship among the critical agencies that affect the
statewide system. With statutory relationships defined in the general HMO statute
(between the insurance commissioner and the secretary of the Department of Health and
Mental Hygiene) early in 1995, a Memorandum of Agreement was signed by the
insurance commissioner, the secretary, and the governor-appointed chairmen of the three
major commissions responsible for health care regulations (Planning, Hospital Rate
Review, and Ambulatory Care Rate and Information System). This memorandum
designed a working relationship and led to the development of the Maryland Health
Care Principles to which each of the organizations subscribe:
· Ensure every Marylander financial and clinical access to health care.
· Provide services at a reasonable cost.
· Maintain the high quality of Maryland's health care system.
· Improve the health status of individuals, families, and communities through an
emphasis on prevention and early intervention services.
· Ensure public accountability through use of reporting criteria, such as health
status outcomes and financial reports.
· Promote the sharing of public responsibility costs equitably.
· Ensure long-term financial viability.
· Promote equity among purchasers.
In addition, during the 1996 legislative session, the relationship between the
insurance commissioner and the health secretary was further strengthened by
def~ninginterdependent roles for oversight of the Managed Care Organizations (MCOs)
that will be responsible for providing care under the Medicaid waiver reform program.
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PUBLIC HEALTH AND MANAGED CARE
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Applications prepared by the MCOs will be jointly reviewed. The Department of Health
will assist the insurance commissioner in reviewing solvency claims for the new
organizations and the commissioner will review the secretary's capitation rates for
payment. A mechanism for joint review of complaints has also been established and a
separate Memorandum of Understanding was signed in July 1996 to ensure a continuing
relationship between the two organizations.
It is precisely because Maryland understands the evolving health care system that
this strategic alliance between public health and the insurance administration has been
created. The need for common oversight to assure the organizational integrity from both
the fiscal and quality of health services delivery perspective is necessary to assure
optimal health care services delivery while maintaining the quality of the evolving health
care enterprises for Maryland's employers and taxpayers.
SOURCE: Based on information provided by Martin Wasserman, Secretary of the
Maryland Department of Health and Mental Hygiene, 1996.
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Representative terms from entire chapter:
health agencies
