Academic public health and managed care.

Health care delivery is going through revolutionary changes. There is a shift toward providing care under the auspices of managed care organizations (MCOs). These MCOs are becoming larger and more comprehensive while increasingly focused on preventive and public health issues. Quality of care, health economics, health services research, data and information systems, quantitative analysis, and the social and behavioral sciences are all becoming important areas of expertise for MCOs and are vital to their successful operation. Thus schools of public health can contribute considerably to MCOs by making their curricula relevant to a managed care environment and having faculty members and research programs that recognize the public health overlap with managed care.     

Principal-agent theory: a framework for improving health care reform in Tennessee

Using a framework based on principal-agent theory, this study examines problems faced by managed care organizations (MCOs) and major health care providers under the state of Tennessee's current capitation-based managed care programs called TennCare. Based on agency theory, the study proposes a framework to show how an effective collaborative relationship can be forged between the state of Tennessee and participating MCOs which takes into account the major concerns of third-party health care providers. The proposed framework further enhances realization of the state's key health care reform goals which are to control the rising costs of health care delivery and to expand health care coverage to uninsured and underinsured Tennesseans.     

Managed Care, School Health Programs, and Adolescent Health Services: Opportunities for Health Promotion

ABSTRACT: The rapid expansion of managed care creates opportunities and dilemmas for those involved in school health and adolescent health promotion. Managed care organizations (MCOs), public health agencies, and school and adolescent health providers share certain common goals and priorities including an emphasis on prevention, cost-effectiveness, and quality of care — and a willingness to explore innovative approaches to health promotion and disease prevention. However, MCOs often face conflicting challenges, balancing the goals of cost containment and investment in prevention. In considering support for school health programs, MCOs will be interested in evidence about the effectiveness of services in improving health and/or reducing medical expenditures. Mechanisms for improving prevention efforts within MCOs include quality assurance systems to monitor the performance of health plans, practice guidelines from professional organizations, and the contracting process between payers and health care providers. Development of partnerships between MCOs and schools will be a challenge given competing priorities, variation in managed care arrangements, structural differences between MCOs and schools, and variability in services provided by school health programs     

Position of the American Dietetic Association: nutrition services in managed care

It is the position of the American Dietetic Association that medical nutrition therapy is an essential component of disease management and healthcare provided by managed care organizations, and that such care must be provided by qualified nutrition professionals. Compared with traditional fee-for-service reimbursement systems, managed care presents new opportunities for dietetics professionals. Until recently, the lack of billing infrastructure has handicapped nutrition providers who wish to bill for their services and has made it difficult to track the outcomes of nutrition care. With the publication of current procedure terminology codes for medical nutrition therapy (MNT) and the implementation of MNT benefits in Medicare part B for diabetes and nondialysis kidney disease, commercial payers, including managed care organizations (MCOs) are likely to implement or expand their coverage of MNT. A large body of evidence supports the efficacy and cost-effectiveness of MNT coverage within managed care plans. This evidence includes cost analyses of conditions treated by MNT, and clinical trial data confirming the efficacy of MNT in improving patient outcomes. MNT is also an important part of national standards of care for many chronic disease conditions. Based on evidence supporting the role of MNT in improving patient outcomes, the Institute of Medicine (IOM) recommended that MNT services be reimbursed by Medicare when patients are referred by a physician. Provision of appropriate MNT can also help MCOs meet accreditation and quality standards established by entities such as the National Committee for Quality Assurance and the Joint Commission for the Accreditation of Health Care Organizations. Much of the work required to secure a place for MNT in MCOs will be done at the practitioner level, by nutrition professionals themselves. Registered dietitians must market MNT to their customers in managed care by addressing the needs of each player. By emphasizing the importance of MNT and other cost-effective forms of preventive care and disease management, MCOs will be well positioned to improve population health at modest cost.     

The transition to managed care: experiences of planned parenthood patients.

A review of the findings from a 1996 survey of women visiting a Planned Parenthood clinic reveals that some members of managed care organizations (MCOs) may not be receiving appropriate preventive services and information from their primary care providers. This article details the results of a survey of 115 women who attended a Planned Parenthood of New York City clinic for reproductive health services. Based on these survey findings, the authors provide recommendations for MCOs and traditional providers of reproductive health to improve service delivery.     

The role of local health units in a managed care environment: a case study of New York City.

With the growth of managed care, local health units (LHUs) and managed care organizations (MCOs) across the country are forging new relationships in an effort to serve the interests of both entities. Through collaboration, LHUs and MCOs can maximize resources, expand health promotion efforts, and benefit from each party's respective expertise. This study draws on the experiences of the New York City Department of Health and other local health units to identify seven basic models for interaction with MCOs and to present suggested steps and strategies for LHUs to develop successful collaborations with MCOs.     

Foster Higgins National Survey: trends in behavioral benefits

Most employer-sponsored health insurance plans provide some coverage for mental health and addiction treatment. However, analysis of over 3,000 employer benefit plans reveals wide variation in the level and scope of behavioral health benefits. Of all commercially insured employees and dependents, 77 percent are currently enrolled in health maintenance organizations (HMOs), preferred provider organizations (PPOs), or point-of-service (POS) managed care plans. This article documents the differences among behavioral health coverage packages in these three different types of managed care organizations (MCOs), and the lower levels of behavioral health coverage compared with coverage for other medical care. The author states that some employers are selecting single-specialty managed behavioral carve-out plans specifically to increase benefit levels and improve quality of care.     

Managed care: past evidence and potential trends

Enrollment in network-based managed care plans has grown rapidly, raising important questions about the actual impact of different types of managed care plans on health care use, expenditure, and quality of care. In this article, we analyze the literature on the performance of managed care plans relative to fee-for-service plans. We find strong evidence that staff- and group-model HMOs have lowered utilization and expenditure relative to fee-for-service while maintaining quality of care. The relatively sparse evidence is more mixed on the performance of newer forms of managed care organizations (MCOs). We also speculate on future trends in network-based managed care. It is likely that employers will increase their economic leverage with managed care firms, accelerating processes that are leading to greater concentration of marketshare among managed care firms. In turn, newer forms of MCOs will increase their economic leverage with providers, which will help MCOs contain costs and monitor quality. Some of the newer MCOs will adapt important features of staff- and group-model HMOs, including increased emphasis on provider selection and reselection.     

Improving the health of infants on Medicaid by collocating special supplemental nutrition clinics with managed care provider sites

OBJECTIVES: This study tested whether collocation of Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) clinics at managed care provider sites improved health care for infants enrolled in Medicaid and WIC. METHODS: Weights and immunization rates were studied for the 1997 birth cohort of African American infants enrolled in WIC and Medicaid in Detroit, Mich. Infants using traditional WIC clinics and health services were compared with those enrolled under Medicaid in 2 managed care organizations (MCOs), of whom about half obtained WIC services at MCO provider sites. RESULTS: Compared with other infants, those who used collocated WIC sites either were closer to their age-appropriate weight or had higher immunization rates when recertified by WIC after their first birthday. Specific benefits (weight gain or immunizations) varied according to the priorities at the collocated sites operated by the 2 MCOs. CONCLUSIONS: Collocation of WIC clinics at MCO sites can improve health care of low-income infants. However specific procedures for cooperation between WIC staff and other MCO staff are required to achieve this benefit.     

Using electronic health records to help coordinate care

The use of electronic health records that can securely transmit patient data among physicians will help coordinate the care of 60 million Americans with multiple chronic conditions. This article summarizes the different organizations in the United States that are developing this technology. It discusses some of the problems encountered and the current initiatives to resolve them. The article concludes with three recommendations for enhancing care coordination: (1) a common health record, such as the Continuity of Care Record, to facilitate the exchange of clinical information among health providers; (2) regional governance structures to encourage the exchange of clinical data; and (3) payment by purchasers of care, both public and private, to physicians for using electronic health records.     

New research alliances in the era of managed care

BACKGROUND: The rise of managed behavioral health care in the United States was accompanied by reductions in costs, which has shifted the policy debate from concerns about rising costs to questions of universal access, mental health benefits at parity with medical benefits and quality of care. To meet these new challenges, managed care organizations, the purchasers of health care and academic services researchers must work together in new ways. AIMS OF THE STUDY: This paper discusses collaborative efforts between a for-profit managed care firm, academia and purchasers of health care coverage to study parity for mental health and substance abuse and how this effort has become part of a research strategy to inform policy. Historical, strategic and methodological issues are presented. METHODS: Case Study. RESULTS: Although the benefits from cooperative research are substantial, there are severe hurdles. Managed care organizations often have data that could answer pressing policy questions, yet these data are rarely used by researchers because it is difficult to obtain access and because analyzing the data requires computing facilities and skills that are not common in health services research. In turn, managed care organizations can learn how to design and implement more informative data systems that eventually lead to more cost-effective care, but there often are more immediately pressing business considerations and sometimes resistance to outside scrutiny. Important features that made this cooperation successful include strong support from the senior management in the company, including complete access to their extensive databases, and established funding for a managed care research center by the National Institute of Mental Health. CONCLUSION: This paper illustrates the potential of collaborative research. New research challenges, such as the linkages between quality and cost-effectiveness in actual practice settings, can only be met successfully if we build alliances among payors, managed care companies and academic researchers.     

Managed care and dually eligible beneficiaries: challenges in coordination

This article describes administrative issues and beneficiary perspectives on the delivery of medical services under Medicare+Choice (M+C) and/or Medicaid managed care organizations (MCOs) for dually eligible beneficiaries. We interviewed staff at nine health plans in four market areas in 2000 and 2001, and conducted beneficiary focus groups in 2001. The study reveals beneficiary confusion about the relationship between their dual coverage and managed care enrollment, and problems with care and benefit coordination across these arrangements, based on regulatory and administrative obstacles to effective benefit and care coordination for beneficiaries enrolled in these varied managed care arrangements.     

The effect of normative social forces on managed care organizations: implications for strategic management

Drawing on institutional theory, this study examines how adherence to a number of "institutional" and "technical" environmental forces can influence the business success of managed care organizations (MCOs). The standards studied include: (1) institutional forces: socially accepted procedures for delivering care (access to quality care, availability of information, and delivery of care in a personal manner); and (2) technical forces: industry standards for cost control and efficient use of financial and medical resources. The most significant finding is that successful MCOs must conform to both institutional and technical forces to be successful. MCOs that conform to either one or the other type of standard were no more successful than those that conformed to neither. These findings have several important implications for MCO strategy. First, to be successful, MCO executives must understand the external environment in which they operate. They must anticipate and respond to shifts in that environment. Second, this understanding of the external environment must place equal emphasis on societal demands (e.g., for accessible care and information) and on technical demands (e.g., for cost-efficient care). These findings may well reflect that once managed care penetration reaches relatively high levels, marketshare can no longer be gained through cost-efficiency alone; rather, enrollee satisfaction based on societal demands becomes a key factor in maintaining and gaining marketshare. Institutional theory provides' some strategies for accomplishing these goals. Cost-containment strategies include implementing policies for cutting costs in areas that do not affect the quality of care, such as using generic drugs and reducing administrative excesses and redundancies. At the same time, MCOs must implement strategies aimed at improving conformity to prevailing societal perceptions of appropriate care, including providing patients more freedom to choose their physicians and encouraging and rewarding care providers for being friendly and personable. An MCO should work to inform the public of the organization's efforts to provide high-quality, low-cost medical care in a friendly, convenient manner.     

Reporting of laboratory-confirmed chlamydial infection and gonorrhea by providers affiliated with three large managed care organizations--United States, 1995-1 999

Surveillance for sexually transmitted diseases (STDs) depends on health departments receiving reports of positive STD test results from laboratories or of STD cases by clinicians. The completeness and timeliness of reporting can affect prompt sex partner notification and outbreak detection. In 1998, approximately 70% of chlamydia cases and 55% of gonorrhea cases were reported by private clinicians, including many affiliated with managed care organizations (MCOs). However, little is known about the completeness and timeliness of MCOs' STD case reporting practices. Three MCOs, three state health departments, and CDC evaluated reporting practices for chlamydial infection and gonorrhea by three large staff or group model MCOs that used different reporting procedures. The findings indicate that state health departments were notified of 78%-98% of chlamydia cases and of 64%-80% of gonorrhea cases identified in these MCOs; the median interval between specimen collection and state health department receipt of a case report was < or = 19 days. To improve surveillance quality, other MCOs, including network model MCOs, which provide most STD care in the United States, should evaluate surveillance quality and identify interventions for improvement.     

Does the quality of care in Medicaid MCOs vary with the form of physician compensation?

A growing fraction of Medicaid participants are enrolled in managed care organizations (MCOs). MCOs contract with primary care physicians (PCPs) to provide health-care services to Medicaid enrollees. The PCPs are generally compensated either via fee-for-service (FFS) or via capitated arrangements. This paper investigates whether the quality of care that Medicaid enrollees receive varies with the means by which PCPs are compensated. Using data for all Medicaid MCO enrollees in a large state, we find that enrollees in MCOs that pay their PCPs exclusively via FFS arrangements are more likely to receive services for which the PCPs receive additional compensation. These enrollees also are less likely to receive services for which the PCPs do not receive additional compensation. These findings suggest that financial incentives may influence the behavior of PCPs in Medicaid MCOs, and thus the quality of the health care received by Medicaid participants enrolled in MCOs.     

Managed behavioral health care and supply-side economics. 1998 Carl Taube Lecture

BACKGROUND: Within the past decade, the mental health care system in the United States has undergone a significant transformation in terms of delivery, financing and work force configuration. Contracting between managed care organizations (MCOs) and providers has become increasingly prevalent, paralleling the trend in health care in general. These managed care carve-outs in behavioral health depend on networks of providers who agree to capitated rates or discounted fees for service for those patients covered by the carve-out contracts. Moreover, the carve-outs use a broader array of mental health providers than is typically found in traditional indemnity plans, encourage time-limited versus long-term treatments and favor providers who are engaged in outpatient care. This phenomenal growth in managed behavioral health care over the past decade includes the rapid growth and quick consolidation of mental health MCOs. The period 1992-1998 shows steady and substantial annual increases in the number of enrollees in mental health MCOs, the figure more than doubling from 78.1 million people in 1992 to a projected 156.6 million in 1998, or 70% of insured lives. Moreover, these vast numbers of enrollees are becoming increasingly consolidated into a smaller number of firms. In 1997, 12 companies controlled nearly 85% of the managed behavioral health care market, with 60% of the market held by the three largest firms. STUDY AIMS: This article reviews empirical data and draws policy implications from the literature on managed behavioral health care in the United States. Starting with spending and spending trend estimates that show the average annual growth rate of mental health expenditures to be lower than that of health care expenditures in general over the past decade, the author examines utilization and price factors that may account for managed-care-induced cost reductions in behavioral health care, with special attention to hospital use patterns, fee discounting and the supply and earnings patterns of various types of mental health provider. In addition, data on staffing ratios and provider mixes of health maintenance organizations and mental health MCOs are reviewed as they reveal at least part of the dynamics of reconfiguration of the mental health work force in this era of managed care. CONCLUSIONS: As measured by changes in utilization and price, widespread application of "classic" managed care techniques such as preadmission review (gatekeeping), concurrent review, case management, standardized clinical guidelines and protocols, volume purchase of services and fee discounting appears to have led to significant cost reductions for providers of both impatient and outpatient mental health services. However, amidst a complex flux of market variables such as risk shifting, changing financial incentives and intensity of competition, not all of the reduction or slowdown in spending can be clearly and purely attributed to managed care. The data on the ongoing reconfiguration of the mental health work force are clearer in their implications: with an oversupply of all types of mental health providers, managed care has significant potential to increase the incidence of provider substitutions and spur the growth of integrated group practices. IMPLICATIONS FOR FURTHER RESEARCH: The current body of empirical and policy literature in mental health economics suggests several salient areas of follow-up. Is the proportionately greater impact of managed care on the annual growth rate of mental health care spending a temporary phenomenon or does it signal an enduring difference in the rates of increase between behavioral health care and health care in general? Beyond industry downsizing, what are the substitutions among mental health providers that are going on, and will go on, to produce cost-effective practices? What are the new financial or risk-sharing arrangements between providers and MCOs that will produce appropriate and high-quality mental health services?     

Assessment partnerships between managed care and public health: the Massachusetts experience.

This article explores factors that facilitate or impede data sharing and linkage collaborations between state public health agencies and managed care organizations (MCOs). The exploration is based upon a review of both recent literature and the four years' experience of the Massachusetts Health Assessment Partnership (MHAP). MHAP has undertaken six collaborative data sharing and linkage projects that have involved diverse topics and methods. This article summarizes both exogenous and endogenous factors that have affected MHAP as a successful collaboration and indicates those factors that might be replicated in future collaborations between public health agencies and MCOs in other locations.     

Management development and change in a demanding health care environment

The problems facing many US health care organizations may prove critical for survival for many of them. Outlines the nature of the problems: increased patient demand, tensions among personnel, technological innovation, cost-conscious purchasers of care, the need to improve cost-efficiency, and barriers to change within organizations. This last presents a number of problems that may often seem intractable and are peculiar to this type of organization.     

Managed care: the US experience

This article provides an overview of managed health care in the USA--what has been achieved and what has not--and some lessons for policy-makers in other parts of the world. Although the backlash by consumers and providers makes the future of managed care in the USA uncertain, the evidence shows that it has had a positive effect on stemming the rate of growth of health care spending, without a negative effect on quality. More importantly, it has spawned innovative technologies that are not dependent on the US market environment, but can be applied in public and private systems globally. Active purchasing tools that incorporate disease management programmes, performance measurement report cards, and alignment of incentives between purchasers and providers respond to key issues facing health care reform in many countries. Selective adoption of these tools may be even more relevant in single payer systems than in the fragmented, voluntary US insurance market where they can be applied more systematically with lower transaction costs and where their effects can be measured more precisely.     

Insurer-provider integration, credible commitment, and managed-care backlash

People distrust managed care organizations (MCOs) more than traditional health plans. This phenomenon has become known as "managed-care backlash." Using a model of the interaction between insurers, physicians, and patients, this paper identifies two possible motivations for MCO backlash. The first, which comes from traditional health plans' superior ability to credibly commit to providing better than least-cost care, is efficiency promoting. The second, which arises when patients are able to obtain higher-benefit treatments through reneging on their initial insurance contracts through "doctor shopping," may reduce efficiency.