American College of Physicians: Internal Medicine — Doctors for Adults ®

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How doctors can affect managed care

From the May 1997 ACP Observer, copyright 1997 by the American College of Physicians.

By Deborah Gesensway

The key to success in managed care is knowing the difference between what physicians can and cannot change, explained panelists at a special presentation titled "Managed Care: Making it Work."

"Managed care is not the source of physicians' problems, it's the messenger," said John M. Harris Jr., FACP, president of Medical Directions Inc. in Tucson, Ariz., and a member of the College's Managed Care Advisory Group.

For instance, it is the purchasers of health care—not managed care organizations—that set health care budgets. "There is no debate that the level of spending must go down," said Richard E. Dixon, FACP, vice president for medical affairs at the National IPA Coalition in Oakland, Calif. "Purchasers have discovered that health care behaves like any other commodity and that the system has fat and waste in it. ... They are not sympathetic to provider pain."

Moreover, he said, it is a myth that managed care organizations are getting rich off the current system. According to Dr. Dixon, everyone is receiving less—not just physicians—as purchasers pull money out of the system.

Risk, on the other hand, is something that physicians can control. "We have no choice over the health care budget, but we can affect how the budgeted funds are allocated and how risk is controlled," Dr. Dixon said.

He explained that in California, physicians are learning to control risk by tackling the hard decisions of determining which physicians are in or out of groups, paying claims and controlling utilization through methods like protocols and educating patients.

"Doctors need to have a sense of ownership," Dr. Dixon said. He noted that the lack of this element will cause hospital ownership of physicians to fail.

The form that integration takes is another area that physicians can change. Dr. Harris from the Tucson-based Medical Directions explained that physicians can choose not to sell to hospitals or HMOs. He noted that history is already proving that such vertical forms of integration are troubled. In the early '90s, for example, insurers like Cigna and Prudential were buying physician practices; three years later they are now selling them.

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