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

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Health plans make nice to doctors: change for the good or just good PR?

From the February 2000 ACP–ASIM Observer, copyright 2000 by the American College of Physicians–American Society of Internal Medicine.

By Deborah Gesensway

Compared to the hoops he has to jump through to treat most of his managed care patients, Memphis internist Mack A. Land, FACP, said the ease of caring for UnitedHealthcare patients reminds him of the good old days—"almost like having private Blue Cross Blue Shield."

Since 1998, United has been test piloting a program in which Tennessee physicians can order most tests, procedures and consults without having to first get permission from a 1-800 nurse. Last fall, United announced it was rolling the program out to the rest of the country, generating great fanfare in the national media, applause from physician organizations including the College and the AMA, and even public praise from President Clinton.

While United's announcement won the publicity prize, it was only one of many moves by health plans that can be interpreted as appeasing doctors and patients angry about the excesses of managed care. Cigna, for instance, recently agreed to raise physician fees in North Carolina, Humana backtracked on an administratively burdensome claims review program, and Aetna U.S. Healthcare promised to pay doctors within 15 days if they submit claims electronically using a new "e-pay" system. The national Blue Cross and Blue Shield Association even hired its first-ever chief medical officer, in large part to improve the insurer's relationships with physicians.

In what many are calling the second stage of managed care, health plans are trying to prove that their interests extend beyond merely saving money. As a result, they are embarking on all sorts of experiments to lure physicians and patients to their side. Their stated goal is to invite collaboration to improve health care even as they continue to control costs.

Cynics, however, wonder if health plans aren't just making nice to doctors and patients as a gigantic public relations ploy. Some see the changes as nothing more than an attempt by health plans to immunize themselves against the growing number of lawsuits that charge them with medical malpractice, or as a means to stave off patient protection legislation. Others worry that even as health plans like United say they're returning more power to physicians, they may be gearing up to implement tactics that may end up disrupting physicians' practices even more.

One thing is clear: While managed care organizations may be backing away from some of their more intrusive business practices, they are not returning to the pre-managed care style of practice. United, for example, explained that it is backing away from its preauthorization policy largely because of financial reasons.

Lee N. Newcomer, FACP, UnitedHealthcare's senior vice president for policy and strategy, said that managed care originally latched onto utilization management because of double-digit growth in medical spending, at least part of which was fueled by physicians' freewheeling use of resources. "Somebody had to do something really draconian," he said. "If the medical profession wouldn't police itself, somebody from the outside had to step in and look at every decision they made."

While that type of thinking may have helped stabilize medical inflation 10 years ago, health plans like United say that they have since learned that heavy-handed control mechanisms such as pre-approval procedures don't save much—if any—money. In announcing its new policy, United said that its utilization review division cost more than $100 million to operate but approved 99% of the treatments requested.

Dr. Newcomer said that United was approving so many procedures that he had trouble addressing doctors' most common complaint: "Why do we have to still go through the hassle?" So after pilot testing its new program and making sure that costs would not spike up, the plan finally let go of one of managed care's most well-known cost-control efforts, preauthorization.

Dr. Newcomer was quick to point out, however, that United is not giving up on cost controls. Under the health plan's new program of "care coordination" that is replacing the old utilization review program, doctors will still have to call the health insurer when they decide to order certain procedures or tests, but they won't be asked to justify their decision. Instead, Dr. Newcomer said, the "notification call" will trigger a series of case management steps designed to reduce the cost of that patient's care through disease management, patient education and advocacy. Cost savings will theoretically occur by reducing re-admissions, complications and lengths of stay.

"The people who have been doing utilization management haven't gone away," he said. "They are now working in a new role. Instead of wondering how they can keep something from happening, they will be asking how they can make it happen really well and as quickly as possible."

Profiling and other tools

Another managed care tactic that isn't going away is United's emphasis on practice profiling, which it started in 1997. To create a clinical practice profile, the plan analyzes billing information to compare member physicians' use of resources and compliance with medical guidelines. Under the new "care coordination" program, physicians who work with United should expect to receive even more practice profiles on everything from how often they prescribe beta blockers for heart attack patients to their use of MRIs.

Dr. Newcomer said that these profiles will be used educationally, not punitively, but many physicians—reacting to their deep distrust of health plans—are wary. While Dr. Land from Memphis likes the fact that he doesn't have to get preauthorizations for his United patients, he is circumspect about what the health plan will do with profiles of his ordering and testing behavior.

"Are they just letting us hang ourselves?" asked Dr. Land, who has not yet received a practice profile from United. "We'll do what we think is appropriate, and then they'll come back at some point and say, 'Dr. Land, we've got a year and a half of data to prove you are overutilizing resources, and we're going to boot you out of the system.' We'll just have to wait and see."

The College has expressed concern about United's use of physician profiling, arguing that profiles should not be used to drop physicians who rack up higher costs because they treat sicker populations. Health care consultant Peter Boland, president of Boland Healthcare Inc. in Berkeley, Calif., echoed the College's concerns, urging internists in particular to be apprehensive about an increased use of practice profiling. As proof, he pointed to the unwillingness of most HMOs to institute advanced methods of clinical risk adjustment so that doctors who care for sicker patients are recognized—and compensated—for the severity of their patients' illness.

"If you really want to meet physicians in a true partnership, the least you can do is adjust their reimbursement based on the severity of illness in the patient they are seeing," Mr. Boland said. "HMOs have fought this and stalled this, and you have to wonder why." Until health plans adjust their compensation plans to recognize that some physicians treat sicker populations, he said, doctors are not going to have the freedom they really need to provide the best patient care.

Alan L. Hillman, FACP, professor of medicine and health care systems at the University of Pennsylvania's Leonard David Institute of Health Economics, said that health plans should really test the impact of tools like physician profiling before implementing them. Otherwise, he said, they risk disrupting the doctor-patient relationship and creating even more turbulence in the health care system.

Other internists worry that health plans like United will introduce other back door approaches to managing care. "My take is that although insurance companies are removing the roadblocks prior to doing something—the upfront denials—they are just going to look on the back end and decide not to pay for it," said Paul A. Gitman, FACP, Governor-elect for ACP–ASIM's New York Downstate II Chapter and a member of the College's Medical Services Committee, which has been tracking efforts like United's. He worries that while patients may like the idea of putting doctors in control of decision-making, physicians may end up footing the bill for anything the insurance companies decide not to pay for afterwards.

"On the face of it," Dr. Gitman said, "I would much rather work under a system where roadblocks are not put in front of me, especially if 99% of the time, [the test, procedure or referral] is going to be approved anyway. Will they still approve the same thing retrospectively, or are they going to ratchet it down on the back end?"

Encouraging collaboration?

In an effort to give something back to physicians and patients, some insurers are taking a more subtle approach than United. Blue Cross Blue Shield, for example, last summer named its first-ever chief medical officer and national senior vice president for clinical affairs. The goal is to smooth over relations between its 50 health plans and its physicians before general physician distrust gets even worse.

Alan Korn, ACP–ASIM Member, the internist who was tapped for the post, said he attributes the current climate of physician distrust to the fact that the health care industry over the past decade "began doing things with the payers and to the doctors. We forgot that the physicians were our partners."

Dr. Korn said that his mission is to forge alliances with doctor organizations, including the College, so that when health plans act as United did and drop micro-management techniques, the medical profession will step in to fill the void and make sure that physicians practice cost-effective, high-quality medicine.

"We want what's best for our patients, and pretending there isn't a problem [with health care quality and cost] isn't the answer," Dr. Korn said. "We are all part of the problem, and we are all part of the solution. An integrated delivery system is a doctor, a hospital and the support system for the doctor, including his specialty society and the payer. As long as we keep distrusting each other and saying unkind things, our patients continue to get less good care." In a similar move, Aetna U.S. Healthcare last year established its own physician relations department.

The moves by Blue Cross Blue Shield, United and many other health plans can be viewed as part of a bigger effort to change the perception of managed care. "It's now too easy to say that anything that's going on in health care that's a problem can be laid at the doorstep of managed care," said Karen Ignagni, president and CEO of the Washington-based American Association of Health Plans (AAHP), which represents more than 1,000 HMOs and health plans.

While Ms. Ignagni acknowledged that the changes made by health plans have a certain public relations value, she insisted that they also represent "a change in tone, a reaching out for more collaboration." When managed care organizations throw out utilization review or set up physician relations units or agree to standardize credentialing forms, she said, they are saying that they hear physicians' and patients' complaints about the way they run their businesses and are trying to adapt where they can.

This is not to say that there won't continue to be major differences of opinion between health plans and physicians on everything from reimbursement levels to politics, "but I think that if we can work on some of the administrative issues, then I think that makes those discussions much easier," Ms. Ignagni said. A memo she sent to HMO officials urged them "to focus more time and energy on whether our operating rules and business practices meet the fundamental test of public understanding."

To a certain degree, physicians agree. The managed care industry's initiatives are prompting physician organizations, including ACP–ASIM, to refocus on ways to improve the quality of the medicine practiced by its members.

"Now it's our turn to step up to the plate," said College Executive Vice President Walter J. McDonald, FACP. "The profession has an obligation to police itself, and I think that when we rely on somebody else to do it, we find the public loses some of its respect for the profession and that it is not going to get done right. Managed care people tried to do this, but we haven't really tried yet." Top issues for the College for the next few years, he said, will focus on quality improvement and patient protection, from practice guidelines and performance measures to the use of the Internet and accreditation.

As United's Dr. Newcomer said, "If the medical profession doesn't take this opportunity to say it's up to us to make medical care better, then it won't be United, but it will be somebody else who will get right back in the middle [of the doctor-patient relationship] again someday, saying once again physicians haven't made things better."

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