Managed Care: What's in Store for U.S.? Health Maintenance Organizations (HMOs) Are Leaping to the Forefront of Efforts to Extend Health Care to the Entire U.S. Population

By Birenbaum, Arnold | USA TODAY, November 1993 | Go to article overview
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Managed Care: What's in Store for U.S.? Health Maintenance Organizations (HMOs) Are Leaping to the Forefront of Efforts to Extend Health Care to the Entire U.S. Population


Birenbaum, Arnold, USA TODAY


HEALTH CARE is watched more closely by cost-conscious corporations and insurers than gold miners leaving a day's work in South Africa. Strategy focuses on avoiding certain outcomes and limiting access to specialty care. Despite the desirability of this goal, managed care may not be appropriate for all vulnerable populations in need of services, particularly those who suffer from serious chronic illness or disability. Health-policy experts who advocate managed care seek to control patient behavior (networks of providers), medical care (health maintenance organizations), or practice styles (authorization). With annual costs for insurance per employee now more than $3,000, huge savings can be realized if utilization patterns are altered. As of 1990, 70% of all employees were under some type of managed care.

The most essential form of managed care involves networks of providers (i.e., hospitals and doctors) who will discount fees for employees of firms that develop these arrangements. Employees pay a lower co-payment or none at all when they use a member of the network or what also is known as a preferred provider organization (PPO). Health maintenance organizations (HMOs) are forms of managed care because they provide ways of establishing comprehensive services, which restrict access to diagnostic testing, use of specialty care, and hospitalization. HMOs attempt to keep people well by doing a great deal in the area of prevention of illness (immunization) and early detection (e.g., Pap smears).

As relationships with physicians have become complex, those patients with real problems are in a quandary as to whether to use or avoid a network. Some doctors belong to many networks at the same time to cast as wide a net as possible. This arrangement may work for patients who basically are healthy and not suffering from a serious chronic illness.

For some, however, one of the problems with these networks is that not every doctor belongs to them. Therefore, patients with serious chronic illnesses who wish to join may have to give up a relationship with a physician who is thoroughly familiar with their medical histories. Losing a good cardiologist who has managed directly the care of someone following a heart attack, but is not part of the network, may be a very aggravating decision for a person with heart disease. Nevertheless, many patients give up those specialists with whom they have a good relationship in order to maintain or reduce their out-of-pocket expenses. When individuals switch plans, albeit reluctantly, they are attempting to control their lives and adapt to changing circumstances.

Doctors naturally are concerned about cost-containment programs. The managed care concept has been extended to the review of clinical decision-making. Considered as a form of second-guessing by some irate providers, it is designed to reduce unnecessary services or the use of ineffective procedures. It certainly makes relations with patients contingent on what plan they are members of. One may approve a procedure within a particular disease category while another may disapprove the same procedure for a different patient in the same disease category!

None of this kind of managed care would be possible without health service research data, collected widely throughout the U.S. Using figures on differential rates of treatment, surgery, diagnosis by practitioners, hospital-related infections, complications, and deaths, employers and insurers make decisions as to what to pay for or where to seek services.

Often, managed care information is collected and utilized by review companies that require pre-approval for procedures covered by insurers. Nurses employed by a review company--value Health Sciences, for instance--match up symptoms with proposed treatment regimens. When a match occurs, approval is granted to provider and patient, guaranteeing that the procedure will be paid for by the insurance company.

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Managed Care: What's in Store for U.S.? Health Maintenance Organizations (HMOs) Are Leaping to the Forefront of Efforts to Extend Health Care to the Entire U.S. Population
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