Managed care is clearly here to stay. This is where the revolution in health care reform is headed. There is no return..
Many voices within the chiropractic profession advocate resisting managed care. Purveyors of “cash practice” strategies tout their approach as a way to “…bypass insurance companies…” The executive director of the Foundation for Chiropractic Education and Research (FCER) has stated, “…it is imperative that Doctors of Chiropractic seek creative ways to get around managed care,” and then went on to recommend the FCER’s practice management program.
Fear of change
These sentiments are echoed repeatedly by state and national associations, chiropractic trade journals, and opinion leaders. Leadership responsibility in chiropractic does not rest easy on those who will not embrace change. In the same article previously mentioned, the FCER’s Executive Director said, “Managed care poses a serious risk to the growth of chiropractic… This is a chilling prospect since it has been estimated that by the year 2000, about 90% of insured Americans will be enrolled in MCO plans…”
Health care is changing rapidly. The advance of managed care delivery systems continues and managed care itself is undergoing constant change. Those who view managed care as threatening will be left behind. Those who find opportunity in change, accept the challenge of change, and adapt creatively will succeed.
Managed care and change
Managed care has increased access to affordable health care for Americans and has addressed the patients’ concern for receiving high quality care. Physician accountability for costs and clinical outcomes is built into managed care plans. Managed care has created a level playing field where allopathic and non traditional healing methods are considered, not on the basis of politics and turf battles, but on the basis of clinical effectiveness and patient preference. Referrals between disciplines and co-management of patients is increasingly part and parcel of managed care.
Managed care has caused a significant change in the way each of us manages information. Managed care plans focus on the most cost-effective use of health care dollars. Savvy health care managers rely on clinical experts who can identify the best practices and best evidence, which lead to the best outcomes for patients. The successful managed care plans are capable of capturing data and provide analysis, support and validate efforts to find the best and most efficient ways to treat patients.
As evidence of satisfied patients, clinical outcomes, and overall efficiencies become more evident to health care purchasers, the chiropractic profession will continue to increase its presence in managed care plans. Managed care is making health care organizations accountable for the delivery of quality care.
Future managed care trends
As a managed care organization, we have the opportunity to talk to our network physicians almost daily. One of the questions we are most frequently asked is, “Where do you see managed care taking our profession?” A definitive answer to this is impossible, but there are historical developments in the managed care industry and emerging trends in health care delivery that give us some insight into what the future holds for chiropractors.
Will managed care go away?
First, it is clear managed care is here to stay. There are some pundits in medicine, chiropractic and other disciplines who view managed care as a passing fad. They believe it will just go away and we will return to the “good old days” of fee-for-service insurance-based health care. In our view, this is simply wishful thinking. Health care costs have become too burdensome for those who pay the bill: employer groups, governments (read taxpayers) and patients. The application of standard business principles of efficiency, attention to quality, and focus on the customer have been a revolution in health care reform for which there is no return.
This is not to say that managed care as it is today will not change. It is likely that managed care strategies will continue to evolve incrementally as technological improvements, information management innovations, and consumer demands proceed to impact health care.
We have already seen tightly restricted forms of managed care supplemented or replaced by more open models of access in response to consumer demands for freedom of choice. However, this “loosening” or broadening of access has been possible only because of management innovations in the areas of physician contracting and strong clinical management.
Impact on physicians practices
Physician business practices have changed radically as well. These changes are only beginning to penetrate the chiropractic profession. The same forces that impacted medicine over the past ten to fifteen years are now coming to bear on the chiropractic profession.
This change has been an inexorable movement away from solo practice toward aggregation to larger and larger group practices. The economies of scale available to group practices are irresistible. Shared overhead, volume purchasing, and the relative clout wielded by a group of doctors lends an advantage over the solo practitioner in a competitive market. The advantages of of a collegial practice environment (shared on-call duties, in-house consultation and stimulation of professional association) are another benefit of group practice.
As practice groups realize economies of scale, still larger aggregations of doctors into network arrangements such as physician-sponsored organizations (PSOs), physician-sponsored networks (PSNs), or “clinics without walls” can achieve benefits available only to large numbers of providers. Larger organizations can support the retention of professional management, management information infrastructure and business innovation necessary to compete in tomorrow’s health care marketplace.
Focus on quality
Purchasers are becoming increasingly sophisticated in looking for indicators of health care quality in making their health care choices. In mature markets, differentiation on the basis of price becomes impossible. The “best deal” is often not the lowest priced product. The best mix of services with demonstrable quality; that is, highest value product, wins in the market. The ability to demonstrate quality and quality improvement is competency that is rewarded in today’s market. Quality will continue to hold the key to success in future markets as well.
Competing on the basis of quality, however, demands both organizational commitment and the resources devoted to quality management. Effective quality management is beyond the reach of the solo practitioner in terms of resources required. Even large physician groups find quality management strategies expensive. The National Committee for Quality Assurance (NCQA) guidelines for physician group accreditation start at $30,000! This kind of overhead can be supported only by larger, “business-savvy” groups and networks.
The public increasingly demands access, quality and equity. Managed care has actually increased access to health care. Quality within managed care is on par with or better than the quality of care under fee-for-service. Quality in managed care continues to improve. One issue currently being played out nationally is equity… how do we deliver equity in health care?
When market forces fail to sustain health care quality, regulatory forces can be brought to bear. Managed care “horror stories” bring into focus the problems that may develop when managed care techniques focus exclusively on cost containment and neglect the quality of care. Legislative intervention and regulatory oversight can target perceived excesses of managed care. The tension between the need to contain cost (and market competitive pricing) and the desire to provide the best care available is not likely to be resolved readily either by legislative fiat or regulatory intervention. In fact, this tension can be viewed as “creative tension,” which brings forth ideas for managed care evolution in the health care marketplace.
The challenge to provide accessible and affordable quality health care will form the dimensions of managed care for the foreseeable future.
A Brief History of US Health Insurance
Health insurance began in the United States in 1929 when a group of schoolteachers agreed to pay a monthly premium in exchange for a fixed number of days of hospital care per year. Since then, health plans have expanded to cover physician’s fees, laboratory tests, diagnostic tests and medications. As the cost of health care rose, commercial insurers stepped up to the plate and offered comprehensive packages. We now have reached a point where the efforts to streamline health care delivery have led to a new philosophy of care giving.
Health care costs began to spiral upward partly because consumers had “free choice” in choosing physicians, hospitals and services. Health care costs climbed from 4.3% of the gross national product (GNP) in the mid-1950s to 13.3% of the GNP by 1992. As health care costs continued to rise, employers both private and public are attempting to halt the tide by passing on more costs to their employees and encouraging competition among health insurance companies. The consumer is left with a focus on cost-containment. Various health insurance models have replaced the traditional fee-for-service model that was once dominant.
Managed care is the most dominant type of integrated health care delivery system. It is a way of providing pre-paid health care within a framework that includes a specified group of health care providers and services. Today, 77% of Americans who receive health care insurance through their employers are enrolled in a managed care plan. In addition, Medicare HMOs are attracting 80,000 new members each month. The most common types of managed care organizations (MCOs) include health maintenance organizations (HMOs) and preferred provider organizations (PPOs). HMOs provide health services in a one-stop shopping format. The consumer must receive all health services from the HMO or its affiliates or pay added fees if care is provided elsewhere.
Excerpted from Health Alert, “What Is Managed Care?” by Diane M. Yoakam, RN, MSN, CEN