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PubMed1998

The promise and the peril.

The medicare population represents the most important group of covered lives to most providers. Medicare is now pushing seniors to join risk-based plans, and is encouraging providers to form PSOs to contract directly with Medicare for risk-based contracts. By eliminating the commercial HMOs as the middlemen, PSOs can not only control their own destiny as providers, they can retain the risk 'profit' in the community for enhanced services or higher payments to providers. To be successful, however, PSOs must have in place the key elements to manage the organization in a managed care environment. While the task of creating a PSO can appear daunting and the risk can be real and substantial, every provider organization should examine the potential of starting or joining a PSO. The greatest risk could be the risk of doing nothing, which could lead to loss of control of the Medicare population, decreased utilization, declining payment for services, the loss of patients being directed to other providers, and the loss of the risk premium from Medicare capitation.

Capitation Fee↗
PubMedDate not supplied

Managed care and the quality of children's health services.

Managed care has changed the practice of medicine. The choice of health care providers has been narrowed, physicians are being held financially accountable for the number of services they use, and a new emphasis is being placed on the cost and quality of the care provided. The transition to managed care has occurred with little attention to its impact on access to health care services or the quality of services provided. There is an absence of information about how children fare in these new systems. What little is known indicates that children in managed care arrangements are less likely to be able to be seen by pediatric specialists, and that families and providers are less satisfied under managed care. The impact of these changes on children's health status, however, is yet to be determined. For children with special needs, the problems of coordination of care, coverage of needed services, and the choice of the appropriate pediatric subspecialists, many of which existed in traditional fee-for-service systems, persist under managed care. In spite of all of the negative anecdotes about managed health care, managed care's focus on its population of enrollees and its heightened sense of a need for health care accountability bring exciting new opportunities to measure and improve the health care children receive. A new emphasis is being placed on practicing evidence-based medicine; the focus is on closing the gap between what is known (effective, evidence-based care) and what is done (current practice). Improved health outcomes and reduced health care costs have been documented in demonstration projects in neonatal intensive care units and in pediatric offices. Applying the principles of these learning collaboratives and employing the tools of continuous quality improvement in health care are urgent challenges that deserve to be met. Health plans, physicians, health care purchasers, regulators, families, and their children must work together to assure that children receive the highest-quality care possible--care that is technically excellent and medically appropriate, and that improves the health of our children.

Child↗
PubMed1991

Managing the future: an examination of the neonatal intensive care unit.

The successes in neonatal intensive care have recently encountered the economic reality of the health care marketplace. Competition and cost constraints from new reimbursement formulas have affected the spirit of altruism that guided the early organization of perinatal regional care. Since high-risk neonatal care is so costly, it is more likely to be adversely affected by competition and cost containment than other inpatient services. The author proposes an examination of the concept of managed competition. Facing the reality of competition, the managers of neonatal units must strive to be cost competitive while maintaining quality of care. Hospitals with a disproportionate share of medically indigent patients must receive public support. To retain the concept of perinatal regional care, hospitals must form partnerships that assure appropriate high-risk care for the patient populations they serve. The public sector must monitor their arrangements to assure quality and access to the appropriate services by all patients in need of high-risk perinatal care. In this manner, the intent of the original perinatal regionalization concept can be preserved in an otherwise hostile competitive health care marketplace.

Economics, Hospital↗
PubMed2002

Price competition in hospital markets: the significance of managed care.

Anticompetitive conduct in the healthcare industry is often hard to detect, and has been ignored by some courts that appear to lack an understanding of managed care and its significance in maintaining price competition. These courts have adopted an approach that is far too historical and mechanistic, and is characterized by outdated factors analyzed in isolation from each other. In order to preserve effective price competition, the courts should embrace a realistic analysis that accurately reflects the workings of health services markets. This article describes the many facets of market power and anticompetitive conduct, and how they affect healthcare prices. The author then tums to an analysis of two recent hospital antitrust decisions, and critiques them for their failure to properly analyze the dynamics of local hospital markets.

Antitrust Laws↗
PubMed1993

What are purchasers looking for in managed care quality?

Spurred by competition and the growth of managed care, providers are seeking new approaches for satisfying the needs of health care purchases. Increasingly, these purchasers are focusing on the value of managed care arrangements, especially the degree to which they manage quality. Underlying the emerging focus on quality are concerns about "undercare," potential legal liability, and the economics of quality. Purchasers are sensitive to the quality of service and the experience of their patients, as well as the clinical quality of the care they receive, and many employers are now engaged in a systematic effort to assess both of these dimensions of quality. The emergence of national data banks, practice standards, and accreditation programs offers additional tools for strengthening provider accountability for quality.

Attitude of Health Personnel↗
PubMed2006

Minority physicians and selective contracting in competitive market environments.

This study used a framework of strategic behavior to further explore MCOs' physician contractual decision making. Using data from a cross-sectional mail survey of 1,215 physicians, we tested the assumption that a physician's patient profile is related to higher rates of contract denial or termination when adjusted and unadjusted for the level of managed care market competition. As minority physicians serve more minority patients who tend to have a poorer health status than white patients, we expected greater rates of contract denials and terminations for minority physicians when models are unadjusted for the level of market competition. In models adjusted for competition, we expected physician and patient race to be unrelated to MCO contractual decisions. We found physician ethnicity was not a predictor for contract denials or terminations, but patient ethnicity was a predictor for contract denials and terminations. When market competition is accounted for, the differences were almost unchanged.

Contracts↗
PubMed2001

Understanding the relationship between market competition and students' ratings of the managed care content of their undergraduate medical education.

PURPOSE: The increase in managed care has led to questions about the inadequacy of instruction undergraduate medical students receive in curricular areas related to managed care. This study examined (1) the percentages of graduating medical students who felt they had received inadequate instruction in six curricular content areas (CCAs): primary care, care of ambulatory patients, health promotion and disease prevention, medical care cost control, teamwork with other health professionals, and cost-effective medical practice; and (2) whether the market competitiveness of these students' medical schools affected their reports of inadequacy of instruction in these CCAs. METHOD: Data from the Association of American Medical Colleges' Graduation Questionnaires (GQs) from 1994 to 1997 were analyzed. The GQ asked graduating students to rate the adequacy of instruction they had received in the six CCAs. Students' ratings were collapsed into the dichotomous variables "inadequate" and "not inadequate." The market competitiveness of medical schools was determined using the four-stage Market Evolution Model developed by the University HealthSystem Consortium. Only responses from students graduating from medical schools that could be staged for all four years of the study were analyzed. Statistical analyses were performed to determine trends for each CCA by year, across the entire study period, by market stage, and by market stage across the entire study period. RESULTS: A total of 39,136 respondents from 86 medical schools were used in the study. The percentages of graduating medical students who reported inadequate instruction decreased over the study period for five of the six CCAs: primary care (27.6% in 1994 to 13.7% in 1997), ambulatory care (37.4% to 23. 9%), medical care cost control (62.9% to 52.9%) cost-effectiveness of medical practice (62.7% to 53.9%), and health promotion and disease prevention (44.4% to 23.7%); all at p <0.001. The responses for inadequacy of instruction for teamwork with other health professionals remained steady from 1994 to 1996 (10.2% to 10.6%), then increased 21.8% in 1997. Over the course of the study, students graduating from schools in more competitive markets (Stage 3 or Stage 4) were more likely to report inadequate instruction in three CCAs, primary care, ambulatory care, and health promotion and disease prevention, than were those graduating from schools in less competitive markets (Stage 1 and Stage 2). Conversely, students graduating from schools in the more competitive health care markets were less likely to report inadequate instruction in cost-effectiveness and cost control than were students from schools in less competitive markets. CONCLUSION: Graduating students' reports of inadequacy of instruction decreased over the study period for five of the six CCAs, increasing only for teamwork with other professionals. Findings were mixed with regard to the relationship of medical schools' market competitiveness and graduating students' reports of inadequacy of instruction. More research is needed to confirm graduating students' perceptions of the inadequacy of their instruction in CCAs related to managed care, particularly once they have gained experience treating patients in managed care environments.

Ambulatory Care↗
PubMed1995

The impact of HMO competition on private health insurance premiums, 1985-1992.

A critical unresolved health policy question is whether competition stimulated by managed care organizations can slow the rate of growth in health care expenditures. We analyzed the competitive effects of health maintenance organizations (HMOs) on the growth in fee-for-service indemnity insurance premiums over the period 1985-1992 using premium data on 95 groups that had policies with a single, large, private insurance carrier. We used multiple regressions to estimate the effect of HMO market penetration on insurance premium growth rates. HMO penetration had a statistically significant (p < .015) negative effect on the rate of growth in indemnity insurance premiums. For an average group located in a market whose HMO penetration rate increased by 25% (e.g., from 10% to 12.5%), the real rate of growth in premiums would be approximately 5.9% instead of 7.0%. Our findings indicate that competitive strategies, relying on managed care, have significant potential to reduce health insurance premium growth rates, thereby resulting in substantial cost savings over time.

Cost Control↗
PubMed1997

Resource utilization control processes as indicators of quality in managed care organizations: a proposal.

Central to the development of a competitive market for managed care products is the ability to measure the quality of care provided by individual managed care organizations (MCOs). Several types of quality measures could be considered for this purpose: patient and provider satisfaction, a listing of specific services provided to patients, or clinical outcomes of such services. Although assessing quality with measures of the process of care is commonplace, we propose developing measures of the production processes that control utilization of health care resources within an organization. Evaluation of these production or resource utilization control processes, although not a substitute for health outcomes assessment, may improve our knowledge of the delivery of services within managed care organizations. We present a paradigm for evaluation of health care resource utilization control processes within managed care organizations based on our description of internal and external controls for health care resource management. This paradigm can serve as a framework for further research into the quality of care provided by these organizations and the processes of health care resource management in MCOs.

Health Resources↗