Managed Care & Integrated Systems
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| What are the purpose of managed care & integrated systems? | Utilization control & Cost-containment
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| Managed Care | Single most dominant force in US HC delivery since 1990
Main driver: ability to control costs, which is why they were formed
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| Fee-For-Service before Managed Care | Insured had free access to any provider, PCP or specialist
Itemized billing of charges by provider to insurer
Few controls over amount of payment
Sickness coverage, no coverage for wellness/prevention
Insurers fxned simply as passive payers of claims
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| Main Factors in the growth of managed care | Flaws in fee-for-service (overused & abused)
Cost appeal of managed care
Weakened economic position of providers
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| Flaws in Fee-for-Service: Uncontrolled Utilization | Moral hazard- if you don't have to pay, you use it more
Overutilization of specialty care
Provider-induced demand
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| Flaws in fee-for-service: Uncontrolled prices & payment | Charges set at artificially high levels
Insurers were passive payers of claims
Inefficiencies absorbed by raising premiums
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| Flaws in fee-for-service: Focus on illness rather than wellness | Lucrative for physicians to hospitalize pts
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| What is managed care? | A mechanism of providing HC services where a single organization takes on the mgmt of: Financing, Insurance, Delivery, Payment (Quad Functions)
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| Integration of the Quad Functions | Financing- negotiation b/t employers/MCOs
Insurance- MCO assumes risk, need for insurance co. eliminated, risk often shared with providers
Delivery- MCOs contract with providers
Payment- capitation, discounted fees, salary
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| Capitation | Provider paid a fixed monthly sum per enrollee, often called a per member, per month (PMPM) payment
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| Discounted Fees | Modified form of fee-for-service
Discounts off the regular fees often range b/t 25-35%
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| Who are MCOs accredited by? | National Committee for Quality Assurance (NCQA) holds MCOs to standards
Many MCOs voluntarily furnish cost & quality info through HEDIS report cards
HEDIS data incorporate a # of different measures on cost & quality
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| Accreditation & Quality Indicators | CMS rates Medicare Advantage (Part C) plans on a 1-5 star scale using indicators such as quality of care, access, responsiveness, & beneficiary satisfaction
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| Health Maintenance Organization Act of 1973 | Passed to provide alternative to fee for service by stimulating growth of HMOs
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| Now, managed care & private health insurance | Managed care is now the primary vehicle for delivering HC to majority of Americans
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| Managed Care & Medicare/Medicaid | MC Advantage (Part C) gives beneficiaries the managed care choice
Beneficiaries also have option to remain in fee for service (75% elected FFS option)
>70% Medicaid enrolled in managed care plans nationwide
Medicaid beneficiaries can enroll w/o waivers
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| Managed care evolved quite differently than what it was originally intended to be. Compromises made: | Utilization mgmt relaxes (leniency to see diff providers)
FFS payment incorporated along with capitation (cap on how much they would pay)
Greater choice of providers offered (started letting in more providers)
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| MCOs 3 main types of controls | Expert eval of medically necessary services
Determination of how services can be provided most inexpensively (OP vs IP, etc)
Review course of medical tx (when pt is in hospital)
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| Gatekeeping | PCP coordinates all health services needed by enrollee (referral req'd if above basic service needs)
Emphasizes preventive care, routine physicals, & other primary care services
Higher levels of services obtained on basis of referral from PCP
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| Utilization Review | Process of evaluating appropriateness of services provided
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| Types of Managed Care Organizations | HMOs- gatekeeper: staff model, group model, network, model, independent practice association model (IPA)
PPOs- list of in-network providers you can see for services
Point-of-Service Plans (POS)
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| Three factors critical in differentiating b/t types of MCOs | Choice of providers
Different ways of arranging services
Payment & risk-sharing (cost-sharing)
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| HMOs | First type of managed care to appear on market
Can only use in-network providers
Gatekeeping
Specialty services require referral
Some FFS
Risk sharing with providers under capitation
Focus on prevention/primary care
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| PPOs | Can use in and out of network providers as long as there is a contract
No gatekeeping
Unrestricted use of specialists
Providers paid according to discounted fee schedules
No risk sharing
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| POS Plans | Can use in and out of network as long as they're contracted
Unrestricted use of specialists
Combination of capitation & FFS
Some risk-sharing
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| HMO Staff Model | Employs fixed salaried physicians
End of year: $ distributed among physicians in form of bonuses, based on physician productivity & HMO's profitability
Greater control over practice patterns
Least popular- high operating expenses, limited provider choi
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| HMO Group Model | Multi-specialty group practice & separately with 1+ hospitals, to provide comprehensive services to its members
Physicians employed by practice, not HMO
HMO pays all-inclusive capitation fee to practice to provide physician services to its enrollees
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| HMO Network Model | Contracts with >1 medical group
Adaptable to large metro areas, widespread geographic regions
Group practices responsible for providing all physician services
Offer more choice
Disadvantage: dilution of utilization control
Network more spread out
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| HMO IPA Model | Most successful in terms of enrollment
Contracts with solo & group practices
Fxns in intermediary representing many physicians
Disadvantage: contract lost, HMO loses large percentage of participating physicians
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| PPOs | Instead of capitation, PPOs make discounted fee arrangements with providers
Discounts range b/t 25-35% off providers' regular fees
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| POS Plans | Combined features of HMOs with pt choice found in PPOs
POS overcome restricted provider choice but retain benefits of tight utilization
Free choice of providers- major selling point
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| Primary responsibility for cost containment falls on? | Private sector
In other nations, govt's control costs by limiting services & payments to providers
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| Impact on Access | Managed care enrollees usually have good access to primary care, preventive services & health promotion activities
HMO enrollees experience fewer disparities in access & utilization
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| Influence on Quality of Care | Comprehensive studies show roughly = quality of care in HMO vs non-HMO; quality has improved over time
Race, ethnicity, SES have little/no effect on quality
Exceptions: satisfaction ratings; for-profit vs non-profit; quality isn't consistent in all MCO
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| Integrated Systems- No MCOs | Formed in reponse to growing power of managed care
Orgs had pressure to reduce costs, which was hard for small providers
Integration into network became rational choice for survival
Forming as result of ACA 2010
Not many private dr. practices
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| Integrated Delivery System | Integration of several orgs under same ownership
Provides array of HC services to large community
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| Fully integrated health network typically includes | 1+ acute care hospitals
Ambulatory care facilities
1+ physician group practices
1+ long-term care facilities
Home health services
Ownership/contract with 1+ MCOs (for payment of services)
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| Accountable Care Orgs | Integrated groups of providers who takes responsibility for improving overal health status, efficiency, & satisfaction with care for a defined population
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| Concluding Points | Health network emerged as hospitals & physicians faced pressure from managed care to cut costs;
Integration allowed large health orgs to win sizeable insurance plans;
Integrating physicians into large orgs challenging (want dr's to work more for less $)
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