Technology and Health Care in an Era of Limits (1992) / Chapter Skim
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PART II: MANAGING CARE IN THE UNITED STATES
PART II: MANAGING CARE IN THE UNITED STATES
Pages 35-76
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Part TI Managing Care in the United States
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EMPLOYER-PROVIDED HEALTH CARE BENEFITS IN THE UNITED STATES Employee group health insurance has been an accepted employer-provided benefit for some four decades in the United States (Feldman et al., Managed care: A term often used generically for all types of integrated delivery systems, such as HMOs and preferred provider organizations, implying that they "manage" the care received by consumers (in contrast to traditional fee-for-service care, which is "unmanaged")
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These benefits traditionally have been provided through an indemnity insurance program; however, alternative systems of prepaid health care delivery have existed for some time (Mayer and Mayer, 1985~. Although employer-provided health care benefits have been of significant value to employees, the cost of providing these benefits has become increasingly burdensome to employers, particularly in an environment characterized by global competition.
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In addition to increasing employee payroll deductions for health care benefits, employers have also sought to impose additional cost sharing at the time health care benefits are received. This most commonly takes the
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Although employers have pursued increased use of employee cost sharing for health care benefits, there are limits to the extent to which cost sharing can be imposed. High out-of-pocket costs may pose a significant barrier to access, thus inadvertently delaying needed treatment, which may result in poorer outcomes and higher health care costs.
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Given the lack of harm of such practices, little has been done until recently to interfere with the way providers manage the delivery of health care services. Indeed, the utilization managements practices of managed care companies that limit the delivery of some of these services are the only significant constraints in the private sector.
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: A prepaid organized delivery system in which the organization and the primary care physicians assume some financial risk for the care provided to enrolled members. The term health maintenance organization was coined by Paul Ellwood for the Nixon administration in 1972.
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Such out-of-plan utilization is usually subject to a significant degree of cost sharing (e.g., deductibles and coinsurance) unlike those services delivered within the plan.
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health care delivery system. As managed care becomes the dominant model for providing health care benefits, there will be fewer and fewer people to whom costs can be shifted, and cost shifting will come to an end.
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Both models, in Wennberg's assessment, are unlikely to control the continuing escalation in health care costs. To achieve this objective, Wennberg advocates a health care system that imposes global limits on the availability of health care resources.
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In the past, certificate-of-need legislation has met with mixed success; the discipline of the marketplace may prove more acceptable to providers and consumers of health care services alike. As the managed care sector continues to grow, an increasing volume of health care services will be provided through contracted provider systemsphysicians, hospitals, ambulatory surgical centers, home health care agencies, laboratories, diagnostic imaging centers, and so on.
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A significant barrier to this approach, as Wennberg points out, has been inadequate knowledge of the benefit-utilization curve for specific clinical procedures; this is not a failure of managed care but simply inadequacy of collective clinical knowledge regarding the benefit of certain procedures and treatment modalities. Future advances in the study of patient outcomes, including functional health status and shared physician-patient decision making, will make it possible to develop utilization management procedures that are more scientifically based and that are oriented toward a physician education role rather than a policing mechanism.
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In some cases, the innovation may even prove to be detrimental to the patient. Within traditional indemnity health insurance mechanisms, these hidden technologies are difficult to recognize and control; with utilization management, managed care is able to resist their rapid adoption and to assess and introduce them in a more controlled manner, eventually adopting those that can be shown to provide increased patient value and rejecting those that do not.
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for women with breast cancer. Throb ~llthnrc Eli that m~nn~.d care organizations.
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Department of Health and Human Services. Health Insurance Association of America.
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Prepayment imposes the discipline of a fixed budget, and responsibility for the full complement of services ensures a degree of balance between primary and specialty care. The presence of a defined population whose members have specific sources of primary care clarifies accountability, which permits epidemiologically based planning and management of primary and preventive care services.
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There is another approach to managing medical practice besides the imposition of rules or restraints on provider decision making (micromanagement) or the restricting of caDacitv hv settin~r ~rlohn1 limits {m~rnm~n_ agement)
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HMOs AND MANAGING MEDICAL PRACTICE MANAGING CARE AT GHC 53 The way in which new technologies are handled at GHC, and by most group- or staff-model HMOs, illustrates both the problems and the potential of traditional HMOs (Figure 4-11. If a new idea surfaces, be it a preventive strategy, a drug, a device, or a significant change in protocol, it is referred to one of four standing committees: Prevention, Pharmacy and Therapeutics, Emerging Technologies, or Practice Efficacy (Guidelines)
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(B) BREAST CANCER SCREENING The development and implementation of an organized breast cancer screening program illustrate the process and logic of innovation management at GHC.
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The COP criteria also explicitly include consideration of the feasibility of implementation at GHC and the costs relative to other competing budget demands. The COP appointed a breast cancer screening subcommittee of primary care physicians, epidemiologists, surgeons, radiologists, nurses, and health educators.
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The net cost to GHC exceeded both $4 In reviewing the breast cancer screening literature, the COP noted two points of interest: · Conventional risk factors for breast cancer could be used to stratify women into subgroups with very different levels of risks (see Table 4-1) , level 1 having 4 to 14 times the risk of level 4 (Carter et al., 1987; Taplin et al., 1990~.
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Recent analyses of data from the Cancer Surveillance System suggest that the program has reduced the incidence of large and more advanced tumors among GHC women. Unlike other planned changes in medical practice, the Breast Cancer Screening Program is managed by a permanent steering committee and receives intense ongoing evaluation, supported in part by grant funds.
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Instead, program developers faced what became a trip through Wonderland to get action on their ideas. THE HMO AS EFFECTIVENESS LABORATORY In the case of breast cancer screening, published randomized trials supported program development, but often this is not the case.
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How this kind of research scenario might work can be illustrated briefly with the interactive computer videodisc, a technology developed by John Wennberg and his colleagues to facilitate shared decision making. The Wennberg team sought GHC interest in serving as a pilot site for the benign prostatic hyperplasia (BPH)
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1990. Revisions in the risk-based breast cancer screening program at Group Health Cooperative.
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1990. The Rand health insurance experiment and HMOs.
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RATIONALE AND BACKGROUND To ensure that its entire population has health insurance, the Oregon legislature has proposed that all individuals with incomes above the federal poverty level have mandatory workplace coverage and that those with incomes below the poverty level be covered through an expanded Medicaid program. The Medicaid plan uses both of the cost-containment strategies 63
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To make such a paradigm operational requires a priority list of medical services. The process of change was initiated by the 1987 Oregon decision to curtail Medicaid coverage for organ transplantation (Welch, H
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Public input was sought in three ways. First, public satisfaction with various health states was obtained from a random telephone survey of Oregonians.
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The standard deviation of all weights is < .02. ness formula produced a preliminary priority list, which was released in May 1990.
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Intermediate health states were assigned values obtained from the telephone survey (see Table 5-1~. The ranking of condition-treatment pairs within each category (step 2)
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Chronic nonfatal one-time treatment improves quality of life (107) Acute nonfatal treatment without return to previous health state (28)
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for the treatment or procedure, the category number, and the rank. The calculated net benefit influenced the final ranking (Pearson correlation coefficient = .47, p < 0.0001~.
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TABLE 5-6 Ranking of the Various Indications for Bone Marrow Transplantation and Alternative Therapies Condition BMT Alternative Rank Alternative Therapy Rank Hodgkin's disease 208 Chemotherapy/radiation 188 Acquired aphasic anemia 213 Medical 259 ALL (child) 243 Chemotherapy/radiation 235 ALL (adult)
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The motivation for the priority list was, in part, the recognition that the decision to curtail funding for organ transplantation had been arbitrary. Tables 5-5 and 5-6 demonstrate that organ transplantation is no longer at the bottom of the list.
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GILBERT WELCH ANI) ELLIOTTS.FISHER the results of the priority list may only apply to a segment of the population, the Oregon experience deserves scrutiny for its potential relevance to a more universal health insurance plan.
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In essence, however, it is a strategy that combines micromanagement with global limits. The priority list will define the benefit package on which the capitated rate will be based.
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Application of a priority list within a universal health insurance plan might mitigate such problems. The need to set limits in health care coverage is sufficiently acute to warrant a consideration of priority setting, despite its problems.
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In addition, they are particularly indebted to the staff of the Oregon Health Services Commission and the Oregon Senate President's Office who were exceptionally responsive to requests for information. REFERENCES Barry, M
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