HMOs and managed care

Beyond capitation: how new payment experiments seek to find the 'sweet spot' in amount of risk providers and payers bear

A key issue in the decades-long struggle over US health care spending is how to distribute liability for expenses across all market participants, from insurers to providers. The rise and abandonment in the 1990s of capitation payments-lump-sum, per person payments to health care providers to provide all care for a specified individual or group-offers a stark example of how difficult it is for providers to assume meaningful financial responsibility for patient care. This article chronicles the expansion and decline of the capitation model in the 1990s. We offer lessons learned and assess the extent to which these lessons have been applied in the development of contemporary forms of provider cost sharing, particularly accountable care organizations, which in effect constitute a search for the "sweet spot," or appropriate place on a spectrum, between providers and payers with respect to the degree of risk they absorb.

The effects of HMO penetration on preventable hospitalizations

OBJECTIVE

To examine the effects of health maintenance organization (HMO) penetration on preventable hospitalizations.

DATA SOURCE

Hospital inpatient discharge abstracts for 932 urban counties in 22 states from the Healthcare Cost and Utilization Project (HCUP) State Inpatient Databases (SID), hospital data from American Hospital Association (AHA) annual survey, and population characteristics and health care capacity data from Health Resources and Services Administration (HRSA) Area Resource File (ARF) for 1998.

METHODS

Preventable hospitalizations due to 14 ambulatory care sensitive conditions were identified using the Agency for Healthcare Research and Quality (AHRQ) Prevention Quality Indicators. Multiple regressions were used to determine the association between preventable hospitalizations and HMO penetration while controlling for demographic and socioeconomic characteristics and health care capacity of the counties.

PRINCIPAL FINDINGS

A 10 percent increase in HMO penetration was associated with a 3.8 percent decrease in preventable hospitalizations (95 percent confidence interval, 2.0 percent-5.6 percent). Advanced age, female gender, poor health, poverty, more hospital beds, and fewer primary care physicians per capita were significantly associated with more preventable hospitalizations.

CONCLUSIONS

Our study suggests that HMO penetration has significant effects in reducing preventable hospitalizations due to some ambulatory care sensitive conditions.

New areas for psychological assessment in general health care settings: what to do today to prepare for tomorrow

Unique roles of the professional psychologist are outlined with respect to increasingly restrictive utilization practices of managed care. Suggestions of how to develop less traditional venues of practice, the types of instruments to use, and report formats, along with ways to persuade primary care physicians (PCPs), managed care organizations, and facilities to utilize psychological assessment services are provided. Medical cost offsets, cost-efficient quality of care, and models of practice are also discussed.

Behind the curve: a critical assessment of how little is known about arrangements between managed care plans and physicians

Extraordinary growth in managed care arrangements over the past decade has been both widely praised and criticized. Proponents and critics agree that the nature of medical practice is being profoundly altered by this growth, even if they cannot articulate the direction and consequences of this change. We explore the roots of this uncertainty by examining the available evidence on critical features of the arrangements managed care plans currently have with affiliated physicians. Our approach is to review and synthesize the literature in several key substantive areas from a broad range of sources. We found that existing knowledge is dated, derived form a limited subset of plans, inattentive to important structural differences between plans, and responsive to a very narrow set of issues poorly reflecting the range of medical practice and change introduced by managed care. We highlight key questions of interest and the knowledge gaps critical to address so that policy and management decisions can both reflect and be informed on these issues that define the arrangements managed care plans make with physicians and ultimately influence medical practice.

Razing a Tower of Babel: a taxonomy for managed care and health insurance plans

To many, the U.S. health care system has become an unintelligible alphabet soup of three-letter health plans. There is little agreement about which characteristics distinguish one type of plan from another. In this article we chip away at what has become a Tower of Babel of managed care and health insurance terminology. We review past and current trends in the market for nontraditional health benefit plans and propose a taxonomy, or system of classification, that will aid in understanding how managed care plans differ from conventional health insurance and from one another. Also included is a comprehensive glossary of terms.