Managed care--a look back and a look ahead

Sociopolitical determinants of international health policy

For decades, two opposing logics have dominated the health policy debate: a comprehensive health care approach, with the 1978 Alma Ata Declaration as its cornerstone, and a private competition logic, emphasizing the role of the private sector. We present this debate and its influence on international health policies in the context of changing global economic and sociopolitical power relations in the second half of the last century. The neoliberal approach is illustrated with Chile's health sector reform in the 1980s and the Colombian reform since 1993. The comprehensive "public logic" is shown through the social insurance models in Costa Rica and in Brazil and through the national public health systems in Cuba since 1959 and in Nicaragua during the 1980s. These experiences emphasize that health care systems do not naturally gravitate toward greater fairness and efficiency, but require deliberate policy decisions.

Colombia and Cuba, contrasting models in Latin America's health sector reform

Latin American national health systems were drastically overhauled by the health sector reforms the 1990s. Governments were urged by donors and by the international financial institutions to make major institutional changes, including the separation of purchaser and provider functions and privatization. This article first analyses a striking paradox of the far-reaching reform measures: contrary to what is imposed on public health services, after privatization purchaser and provider functions are reunited. Then we compare two contrasting examples: Colombia, which is internationally promoted as a successful--and radical--example of 'market-oriented' health care reform, and Cuba, which followed a highly 'conservative' path to adapt its public system to the new conditions since the 1990s, going against the model of the international institutions. The Colombian reform has not been able to materialize its promises of universality, improved equity, efficiency and better quality, while Cuban health care remains free, accessible for everybody and of good quality. Finally, we argue that the basic premises of the ongoing health sector reforms in Latin America are not based on the people's needs, but are strongly influenced by the needs of foreign--especially North American--corporations. However, an alternative model of health sector reform, such as the Cuban one, can probably not be pursued without fundamental changes in the economic and political foundations of Latin American societies.

Consumer satisfaction with primary care provider choice and associated trust

BACKGROUND

Development of managed care, characterized by limited provider choice, is believed to undermine trust. Provider choice has been identified as strongly associated with physician trust. Stakeholders in a competitive healthcare market have competing agendas related to choice. The purpose of this study is to analyze variables associated with consumer's satisfaction that they have enough choice when selecting their primary care provider (PCP), and to analyze the importance of these variables on provider trust.

METHODS

A 1999 randomized national cross-sectional telephone survey conducted of United States residential households, who had a telephone, had seen a medical professional at least twice in the past two years, and aged > or = 20 years was selected for secondary data analyses. Among 1,117 households interviewed, 564 were selected as the final sample. Subjects responded to a core set of questions related to provider trust, and a subset of questions related to trust in the insurer. A previously developed conceptual framework was adopted. Linear and logistic regressions were performed based on this framework.

RESULTS

Results affirmed 'satisfaction with amount of PCP choice' was significantly (p < .001) associated with provider trust. 'PCP's care being extremely effective' was strongly associated with 'satisfaction with amount of PCP choice' and 'provider trust'. Having sought a second opinion(s) was associated with lower trust. 'Spoke to the PCP outside the medical office,' 'satisfaction with the insurer' and 'insurer charges less if PCP within network' were all variables associated with 'satisfaction with amount of PCP choice' (all p < .05).

CONCLUSION

This study confirmed the association of 'satisfaction with amount of PCP choice' with provider trust. Results affirmed 'enough PCP choice' was a strong predictor of provider trust. 'Second opinion on PCP' may indicate distrust in the provider. Data such as 'trust in providers in general' and 'the role of provider performance information' in choice, though import in PCP choice, were not available for analysis and should be explored in future studies. Results have implications for rethinking the relationships among consumer choice, consumer behaviors in making trade-offs in PCP choice, and the role of healthcare experiences in 'satisfaction with amount of PCP choice' or 'provider trust.'

“Well Read”

Managed care pharmacists are involved formally with the interface between the delivery and financing of health care; their work thus entails an accountability for both elements. Interpreted broadly managed care pharmacists are pharmacists working within the sphere of a health care system, health care purchaser, health insurer, managed care organization, or benefit administration agency. Patients, the pharmacy profession, and society are best served by this broad interpretation, because the interdependency of financing and delivery is inextricably linked to the achievement of good health outcomes. This continuing feature will explore contemporary issues facing managed care pharmacists.

Different Subjects: The Health Care System's Participation in the Differential Construction of the Cultural Citizenship of Cuban Refugees and Mexican Immigrants

This paper explores the public health system's differential construction of Mexican and Cuban immigrants' "deservingness" of citizenship benefits and its preparation of them for different roles in U.S. society. Civic institutions such as the public health care system are charged with inculcating normative behavior in immigrants and instilling in them different conceptions about their rights and responsibilities. Faced with limited resources under the implementation of Medicaid managed care, hospital administrators created new categories of "deserving" and "undeserving" immigrants based on neoliberal standards of individual responsibility and self-discipline. As a result, hospital policies construct different types of "cultural citizenship" for Cuban and Mexican immigrants, preparing the former to be active citizens and discouraging the latter from pressing demands on American civil institutions. I show that this negative construction of Mexican immigrants' moral worth leads to unmet health needs and poor health outcomes.

Part IV: Reformers in medical education and practice: Effect of managed care organization in the United States

BACKGROUND

Part I (Can J Plast Surg 2000;8:25-29) established that standards of professional practice shift constantly. When a standard falls short of professional expectation or when a physician becomes more concerned with financial gain rather than patient care, society needs the action of a reformer. Parts I, II (Can J Plast Surg 2001;9:59-68) and III (Can J Plast Surg 2002;10:103-108) covered 500 BC to 1970 AD and comprised 31 physicians who introduced innovations in medical knowledge or medical philosophy. Part IV deals with a time in which new conditions have been imposed on medical practice. In the United States, medical education and practice felt the repercussions of financial institutions participating in health care management.

STUDY DESIGN

The reformers were scientists who conformed to our definition of 'reformer': a person whose action restored, reshaped or advanced the structure or ideology of medical practice.

RESULTS

This survey demonstrated that the reforms were accomplished by scientists possessing critical judgement and analytical qualities that enabled them to influence the direction of medical education and practice. In the last 20 years, financial institutions imposed different criteria that may require future reformers to reestablish lost objectives.

CONCLUSION

Reforms have been achieved through intuitive leaps, alterations of conventional practice, painstaking research or administrative restructuring. The present health management in the United States requires new solutions.

Managed care or managed inequality? A call for critiques of market-based medicine

This review article critiques the growing dominance of market-based medicine in the United States against the background of existing problems with quality of care, rising costs, devaluation of doctor-patient relationships, and, especially, persistent inequalities of access and outcomes. It summarizes the present state of health care delivery by focusing on the concurrent trends of growth in managed care, expanding profits, increasing proportion of those uninsured, and widening racial, ethnic, and class disparities in access to care. Allowing market forces to dictate the shape of health care delivery in this country ensures that inequalities will continue to grow and modern medicine will become increasingly adept at managing inequality rather than managing (providing) care. The article challenges anthropology to become more involved in critiquing these developments and suggests how anthropologists can expand on and contextualize debates surrounding the market's role in medicine, here and abroad.

A post-1990s assessment of strategic hospital alliances and their marketplace orientations: time to refocus

In past years, many SHAs formed in local urban markets to better compete for managed care contracts. In response to 1990s forces, these SHAs appear to have adapted product, production, and selling orientations to their markets, aimed at large institutional purchasers of health care. However, health care markets have evolved differently than anticipated. SHAs and their hospitals should now adopt the marketing orientation and focus more on patients and enrollees.

Managed care and the evolution of patient rights

Managed care has grown into the driving force for coordinating and managing healthcare delivery and its financing. At the same time, major initiatives have gained momentum in societal and legislative efforts regarding patient rights. This article provides a historical, legal, and philosophical review of the major events that have shaped the evolution of healthcare services and development of the patient rights issue. As the healthcare industry finds itself in a state of needed reform, the future evolution of managed care in light of the patient rights issue will have important implications for legislators, clinicians, and healthcare organizations as they struggle to provide quality care and improve cost controls.

Medical ethos and social responsibility in clinical medicine

The medical profession will face many challenges in the new millenium. As medicine looks forward to advances in molecular genetics and the prospect of unprecedented understanding of the causes and cures of human disease, clinicians, scientists, and bioethicists may benefit from reflection on the origins of the medical ethos and its relevance to postmodern medicine. Past distortions of the medical ethos, such as Nazism and the Tuskegee Syphilis Study, as well as more recent experience with the ethical challenges of employer-based, market-driven managed care, provide important lessons as medicine contemplates the future. Racial and ethnic disparities in health status and access to care serve as reminders that the racial doctrines that fostered the horrors of the Holocaust and the Tuskegee Syphilis Study have not been removed completely from contemporary thinking. Inequalities in health status based on race and ethnicity, as well as socioeconomic status, attest to the inescapable reality of racism in America. When viewed against a background of historical distortions and disregard for the traditional tenets of the medical ethos, persistent racial and ethnic disparities in health and the prospect of genetic engineering raise the specter of discrimination because of genotype, a postmodern version of "racist medicine" or of a "new eugenics." There is a need to balance medicine's devotion to the well-being of the patient and the primacy of the patient-physician relationship against the need to meet the health care needs of society. The challenge facing the medical profession in the new millennium is to establish an equilibrium between the responsibility to ensure quality health care for the individual patient while effecting societal changes to achieve "health for all."

Academic health systems management: the rationale behind capitated contracts

OBJECTIVE

To determine why hospitals enter into "capitated" contracts, which often generate accounting losses. The authors' hypothesis is that hospitals coordinate contracts to keep beds full and that in principal, capitated contracts reflect sound capacity management.

SUMMARY BACKGROUND DATA

In high-overhead industries, different consumers pay different prices for similar services (e.g., full-fare vs. advanced-purchase plane tickets, full tuition vs. financial aid). Some consumers gain access by paying less than total cost. Hospitals, like other high-overhead business enterprises, must optimize the use of their capacity, amortizing overhead over as many patients as possible. This necessity for enhanced throughput forces hospitals and health systems to discount empty beds, sometimes to the point where they incur accounting losses serving some payors.

METHODS

The authors analyzed the cost accounting system at their university teaching hospital to compare hospital and intensive care unit (ICU) lengths of stay (LOS), variable direct costs (VDC), overhead of capitated patients, and reimbursement versus other payors for all hospital discharges (n = 29,036) in fiscal year 1998. The data were analyzed by diagnosis-related groups (DRGs), length of stay (LOS), insurance carrier, proximity to hospital, and discharge disposition. Patients were then distinguished across payor categories based on their resource utilization, proximity to the hospital, DRG, LOS, and discharge status.

RESULTS

The mean cost for capitated patients was $4,887, less than half of the mean cost of $10,394 for the entire hospitalized population. The mean capitated reimbursement was $928/day, exceeding the mean daily VDC of $616 but not the total cost of $1,445/day. Moreover, the mean total cost per patient day of treating a capitated patient was $400 less than the mean total cost per day for noncapitated patients. The hospital's capitated health maintenance organization (HMO) patients made up 16. 0% of the total admissions but only 9.4% of the total patient days. Both the mean LOS of 3.4 days and the mean ICU LOS of 0.3 days were significantly different from the overall values of 5.8 days and 1 day, respectively, for the noncapitated population. For patients classified with a DRG with complication who traveled from more than 60 miles away, the mean LOS was 10.7 days and the mean total cost was $21,658. This is in contrast to all patients who traveled greater than 60 miles, who had an LOS of 7.2 days and a mean total cost of $12,569.

CONCLUSION

The capitated payor directed the bulk of its subscribers to one hospital (other payors transferred their sicker patients). This was reflected in the capitated group's lower costs and LOS. This stable stream of relatively low-acuity patients enhanced capacity utilization. For capitated patients, the hospital still benefits by recovering the incremental cost (VDC) of treating these patients, and only a portion of the assigned overhead. Thus, in the short run, capitated patients provide a positive economic benefit. Other payors' higher-acuity patients arrive more randomly, place greater strains on capacity, and generate higher overhead costs. This results in differential reimbursement to cover this incremental overhead. Having a portfolio of contracts allows the hospital to optimize capacity both in terms of patient flows and acuity. One risk of operating near capacity is that capitated patients could displace other higher-paying patients.

Establishing a pediatric hospitalist program at an Academic Medical Center

Academic medical centers have been challenged to respond to a rapidly changing and increasingly competitive health care environment. The Pediatric Consultation and Referral Service (PCRS) at Rainbow Babies & Children's Hospital (RB&C)/University Hospitals of Cleveland was established in 1993 with the goal of providing rapid access to community-based physicians for the referral of patients requiring urgent hospitalization within the broad scope of general pediatrics. We describe our initial 3-year experience in the planning, implementation, and evaluation of a pediatric hospitalist program. PCRS provided care to 2,740 patients during the first 3 years of operation, 63% (1,716) of whom were under age 3 years. Leading primary diagnoses in order of decreasing frequency were asthma, pneumonia, bronchiolitis, febrile illness, gastroenteritis, seizures, croup, apnea, and cellulitis. Third-party payer mix was: Medicaid 42%, managed care 42%, indemnity insurance 10%, self-pay 6%, and Bureau for Children with Medical Handicaps 1%. From survey data, referring physicians and pediatric residents assessed perceptions of access, collegiality, and quality of care in a highly favorable manner. Subspecialty colleagues perceived access and collegiality very favorably but rated quality of care substantially lower than referring physicians and residents did. Our experience demonstrates that a pediatric hospitalist program is logistically and economically feasible and may contribute to the patient care, education, and research missions of academic medical centers. A well-structured program can provide community physicians with excellent access and support collegial relationships. Beyond increasing a medical center's patient referral base, a hospitalist program can potentially enhance the esteem of the discipline of general pediatrics and, it is hoped, promote general pediatrics as a viable career option for trainees.

The fifth evolutionary era in infection control: interventional epidemiology

A historical review of infection control over the last 4 decades indicates that the field has evolved from being one whose investigative work laid the foundation for understanding the chain of infection to an influential profession whose research on effective prevention methods have revoluntionized clinical practice throughout the world. Underlying our successes is the fact that growth in the profession has brought with it an enormous expansion in responsibilities, which in turn has impacted, in some cases severely, the personnel and time resources of infection control departments. At the same time, the economic pressures brought on by the upheavals in the business of health care have trickled down wherein it now influences the makeup and effectiveness of infection control programs. To continue with our mission of reducing morbidity and mortality, and perhaps to avoid a diminishing of our own professional influence, it will become essential that new approaches to the management of infection control programs be implemented. The approach must start by incorporating a basic mandate for change in the infection control professional.

Evolution of the US Health Care Marketplace: From Antiquity to Present Times

To gain a better understanding of the American health care system of today, it is essential to review the chronicle of its development. Before the 20th century, there was very little variation in the basic health care delivery system. In contrast, this century has seen unprecedented changes, forming a unique and complex market-driven health care system. The American health care system is also replete with contrasts, often characterized in both superlative and the poorest of terms. This article chronicles the changes in US health care over the last century, then describes today's market in detail.

MANAGED CARE: The Effect of Case Management on State Psychiatric Clients

This study examined whether case management services, mandated under the managed care contract for adult clients in a medium-sized state psychiatric hospital in Tennessee between July 1996 and June 1997, were offered as specified, and the impact these services had on recidivism for individuals who were identified as having a severe or persistent mental illness. Although all of the clients were offered case management, 47% refused the service. Of the 14 who had one or more readmissions, six (43%) had case management. These findings demonstrate that health care providers must offer sufficient information to their clients so that they can use the managed care system more effectively.

Hospital costs of pediatric intensive care

OBJECTIVE

To characterize hospital costs of pediatric intensive care and to determine which demographic and disease characteristics are associated with cost.

DESIGN

Prospective cohort study.

SETTING

A 20-bed pediatric intensive care unit (PICU) in an urban university-affiliated teaching children's hospital.

PATIENTS

All children (n = 1,376) admitted to the multidisciplinary PICU during the fiscal year 1994.

INTERVENTIONS

None.

MEASUREMENTS AND MAIN RESULTS

Demographics, diagnoses, organ failure, Pediatric Risk of Mortality score, length of stay (LOS), and outcome were recorded. All hospital charges were obtained. The actual hospital costs were calculated by two separate methods. First, we converted the itemized patient charges into costs, using corresponding cost-to-charge ratios for each charge. In addition, we examined all direct and indirect expenses for the PICU. Univariate and multivariate regression analyses were used to determine the correlates to cost. The study population was similar to that of other studies of pediatric intensive care. The PICU was 86% efficient. The total cost for PICU care was $16,983,323. Average cost per admission was $12,342 +/- $22,313, and average cost per patient day was $2,264 +/- $868. The cost because of the PICU location (room cost) was 52.1% of all costs, and cost of laboratory studies was 18.3%. Respiratory therapy, pharmacy services, and radiology each accounted for between 6% and 8%. Total cost was most closely related to LOS, but severity of illness (Pediatric Risk of Mortality), diagnosis, and organ failure were also significant. Severity of illness was the most important factor in determining the variation in daily costs. Increased severity of illness was associated with higher laboratory and diagnostic study costs. We found little difference in the PICU room cost when calculated by adding direct and indirect expenses, compared with that obtained by using the cost-to-charge ratio.

CONCLUSIONS

The maintenance of the specialty location and its personnel is the most costly component of pediatric intensive care. The strongest correlate with total cost for pediatric intensive care is LOS, but if costs are normalized for LOS, severity of illness best explains cost variation among patients. These data may serve as the basis for additional studies of resource allocation and consumption in the future.

US health care: a look ahead to 2025

The chapter begins with a reminder that forecasting changes in the health care sector a quarter to a third of a century in the future is likely to be a losing effort, based on past experience. It next considers changing organization and financing and questions that managed care and market competition will be the key forces introducing change. The author looks forward to the passage of universal health insurance coverage for essential care by early in the new century, with patients having to pay for more choice and more quality. The analysis next focuses on the physician supply and points to three challenges: how to moderate the numbers being trained; whether to reconsider the conventional wisdom of training more generalists; and how to support more resources for the National Health Service Corps to improve coverage in underserved areas. The author predicts the restructuring of acute care hospitals, with a marked reduction of in-patient beds, and that leading-edge research-oriented academic health centers should be able to remain out in front. There are also potential gains in health status from prevention and molecular medicine in a nation where chronic disease will dominate.

Some thoughts about the past and future of pathology workforce

Comprehensive information on pathology workforce is currently not available. Prudent planning for pathology Graduate Medical Education (GME) requires more timely data than presently exist. In addition, we lack understanding of workforce kinetics in academic pathology which often serves as a buffer in times of surplus. Although the heads of community hospital and private laboratory groups control the majority of decisions regarding pathology workforce, a database of these decision-makers does not exist. However, information from the most recent published sources strongly suggests that a significant surplus already exists. Furthermore, this position is supported by earlier unpublished work from the 1994-1995 Conjoint Committee on Pathology Enhancement (CCOPE) surveys.

Envelopes: presidential address

The fabric of medical care has been altered during the past 2 decades. Initially this alteration was furtive but it rapidly escalated, producing change that will be irrevocable. Physicians, dedicated to caring for their patients, frequently were found struggling in the wake of the changes in the health care system. In most situations they found themselves swept aside from crucial decision making because of timidity, practice obligations, and absence of knowledge related to "medical business." With about 600 managed care operations in the United States, physicians can no longer afford to sit in the stands and just watch the play on the field. Participation is crucial and must be accompanied by additional learning, such as masters degrees in business administration or MBAs. This will allow the new players to read the playbook of business medicine. Although on-the-job training is possible, it usually has a slow learning curve as a result of diluting the new assignment with practice obligations. Despite these formidable challenges, physicians must enter the local, state, and national arenas and participate. Despite change and reaction to change, physicians have an irrevocable trust that cannot be withdrawn or overlooked. It has been earned and pervades every facet of our professional careers. The physician has an uncompromising duty and privilege to care for his or her patient in the highest and most ethical manner, a duty that will remain forever. This will never change!

Managed care: future good news or bad news for vascular surgeons

Recently, William W. McGuire, Chief Executive Officer of United Health-Care, emphasized that the key from the patient's viewpoint is access. He stated, "We use the term gateway rather than gatekeeper." He emphasizes the importance of direct access of the patient to the right physician, whether it be a specialist or a generalist. Although some health care strategists believe that patients should initially see a generalist before receiving specialty care, this approach may not save dollars in the long run. Managed care is likely to have a major impact on vascular surgeons. Currently, business purchasing cooperatives are one model for containing costs of expensive invasive procedures among the working population. Such cooperatives are likely to achieve a stronger penetration in the health care market and to negotiate aggressively for packaged fee contracts for specialized cardiovascular care and procedures. Because the vast majority of vascular patients are more than 65 years of age, the movement of Medicare toward managed care may also affect vascular surgery in a major way. If vascular surgeons are to survive financially in the managed care environment, they must continue to provide evidence-based solutions to clinical problems at a reasonable cost and with good outcomes. They must also understand that involvement in the administrative and political leadership of health care is essential to maintaining some influence on the future reimbursement for our services.

Forecasting American health care: how we got here and where we might be going

This article is a form of thinking about the future properly regarded as conditional forecasting. It begins by reminding readers of the enormous changes in American medicine since World War II. The second part revisits critically an earlier effort at conditional forecasting for 1995 that Paul Starr and I published in the early 1980s. Besides reviewing the prescience of our forecasts, the second part outlines the earlier trends in progress we identified and the four combinations of political and economic settings we explored. On that basis, the final part takes up the challenge of anticipating sensibly some possible medical futures in the America of the early twenty-first century, a task which excludes simple extrapolation.

Managed care and physician referral

In the era of managed care, fundamental changes are occurring in the American health care system that are altering physician referral patterns. Faced with higher premiums that erode profits and competitiveness, employers, government, and nonprofit agencies are contracting with managed care organizations, which control costs partly by imposing constraints and incentives on physician referral behavior. As more and more Americans are covered by managed care plans, it becomes more important to understand how managed care organizations control access to specialists and how these controls affect health outcomes. The authors present a model defining the expected influence of managed care on physician referral based on social exchange theory and the empirical literature. They conclude with a discussion of the future research implications of the model.