Search this site
MANAGED CARE February 2000. ©2000 MediMedia USA

Payor, Provider, Patient: Healthcare by Consensus
Proceedings of the 12th Annual Symposium for Managed Care Professionals

PANEL DISCUSSION

Health Care Reform: Payors, Providers, and Patients

The end point of reform may be physicians and patients gaining some power at payors' expense. But for patients, a place at the table requires greater self-responsibility.


THE FACULTY

MODERATOR


From left: Barrett A. Toan, M.B.A.; John K. Gorman; Stephen N. Lamb, J.D.; William F. Jesse, M.D.; and Phillip R. Boulter, M.D.


GLENNA CROOKS, PH.D.: Barrett, health care is moving fast. Tell me how fast it's moved for you.

BARRETT TOAN, M.B.A.: New drugs are coming out, whether for flu or new molecules in development. The mergers of large pharmaceutical manufacturers. The implosion of health care on Wall Street. If you look at the money coming out of health care right now, it's frightening. The market is not backing health care, except for pharma. All those things have an impact on us.

CROOKS: John, from your perspective of being in Washington, where do you see this heading, and what are you doing to help managed care in that regard?

JOHN GORMAN: The challenges for the managed care industry and for providers are unprecedented. We're in the midst of increased accountability and regulation, to give consumers assurances that health care is not compromised by profit motives. The problem is that Congress is engaged in a love-hate relationship with the industry. It realizes that managed care is the only real savior of Medicare, Medicaid, and probably, coverage in the commercial sector. But it doesn't trust this industry to do what it's supposed to do, unless it is regulated aggressively. We help plans negotiate pressures on the way they do business. Everybody talks about the United HealthCare announcement, but a lot of us in D.C. think this was a nonevent. They are not giving up much; they were only saying "No" about 1 percent of the time. The timing of it was an absolute master stroke. But United only gave up one of five or six methods to control physician behavior and costs. Precertification is just one prong of the strategy, and I think we're going to see health plans look at the others — retrospective review, contracting strategies, and things of that sort.

CROOKS: Well, Steve, you live in that epicenter, Washington. Comment on what the United announcement means in terms of quality imperatives.

STEPHEN LAMB, J.D.: I'm going to take on John on a couple of issues. I don't think you're going to see unprecedented regulation. The government has a long history of regulating health plans. On the purchasing side, the government is a mess. The Medicare HMO program was supposed to grow by this time, but 1999 will probably be one of the worst years ever for the program. The Health Care Financing Administration initiated its own quality-improvement program, making a deliberate decision: "We're going to part ways with the private sector." They chose not to coordinate with NCQA, the Joint Commission, and others. The result was a mess. The program is regarded by most folks as absurd. It is now where Congress, plans, and everyone says, "Why didn't they coordinate with the private sector from the start?"

CROOKS: Bill, comment on any of the provocative notions that you've just heard.

WILLIAM JESSEE, M.D.: Well, as usual, those inside the Beltway live in a special world, completely out of touch with the real world. John, your comment about Congress and the administration being enamored of managed care — well, of course they are. It's the only alternative they have ever seen to the fee-for-service model. We've got a political problem: Everybody paints the industry with a broad brush. And managed care is very diverse. But the managed care industry forgot that old maxim: Absolute power corrupts. We've seen plans [that think they] can control physician behavior. Plans can't, and they are finally starting to recognize that. The United decision — give me a break! They tested it in one or two markets and found it didn't cost any money. I give Lee Newcomer credit for probably one of the most brilliant activities ever in the managed care industry. But it recognizes that managed care really worked well in group and staff models. We tried to roll that out to the network model, and it was a totally different kettle of fish. A lot of health plans talk about free enterprise, and then operate like a Soviet collective. It doesn't work. And for the poor physician who participates in multiple plans, he's trying to provide services to 12 different Soviet collectives with 12 different sets of rules with a central commanding control structure. No wonder it's not working. Inside the Beltway, people need to look at why managed care is in dire straits, rather than put new regulations in place. I think we're in a time where there's going to be new opportunity for innovation. The smart plans are going to ask, "How can we align the plan, physicians, and patients?" One way to do that is to offer financial incentives to patients for healthy behaviors, but that's not cost-effective if you know they are going to rotate out of your plan next year. So, do we want free choice of plans from year to year, or do we want incentives for behavior? That's a tradeoff that public policy will have to debate.

CROOKS: Phil, you have to make that happen in the context of everything that has been talked about so far and a whole lot of things that we haven't.

PHILIP BOULTER, M.D.: Before I went to the "dark side of the force" — managed care — I spent 25 years in group practice. I agree with Bill's comments that it's difficult in a million-member IPA model, with its myriad holy and unholy relationships, to affect physician behavior. One challenge is to understand that there has been a fundamental change in society. Managed care really began in the early '70's as a choice for people who wanted something different. Now, there is no choice — you have managed care plans, and that is the way health care is delivered. Physicians and health systems have to play in what has become a capitalistic game, and hopefully, improve quality. But employers have absolutely zero interest in quality. It's very disturbing that in New England, they're uninterested in whether you're NCQA-accredited — all they want to know is what is the plan costs. I would add one more challenge: The implications of the Balanced Budget Act are astonishing, and they will drive managed care to whatever its end game will be. I think we probably don't have more than one to two years to get to that end.

JESSEE: I have a great deal of respect for what NCQA has accomplished, because putting some infrastructure and comparative measurements in place was a great step forward. But in reality, people don't pay attention to whether a health plan is accredited. The best line was from a medical director for a small health plan, who said in his market, NCQA stands for "Nobody Cares. Quit Asking."

TOAN: I understand the economics of [United's decision], allowing physicians to not have to call for authorizations. But I think you cannot underestimate the political impact within the health care system of conceding that physicians are correct all the time.

LAMB: Is that what they're doing?

TOAN: That is what will happen within a system. We manage United's pharmacy benefit. The day after that announcement, our phones lit up. Why? "I no longer have to have my drug prior authorized." That's what the patient understood. Now, United may not have meant that, but that's what the patient heard. When you're managing a health plan, you've got to manage the behaviors and expectations of patients, physicians, and employers. I think you underestimate [how] hard it will be to change the equation by which we've worked for the last 10 years.

LAMB: The inherent danger in the public expectation, "Your doctor is always right and practices medicine correctly 100 percent of the time," is that by United's own data, only 60 percent of physicians give beta blockers after heart attacks. This flies in the face of all of the quality metrics NCQA pushes. It's a stroke of genius for building trust, but it doesn't build a case for quality care.

JESSEE: I think the industry must get out of the mind-set I just heard again — that it can manage physician and patient behavior. You can't do it, particularly when the average physician is in 12 different health plans. Twelve people are trying to manage them 12 different ways. If you can create a delivery system where there are incentives for patients and physicians to do the right things, and the plan's role becomes one of giving them tools to do that, that's a totally different mind-set.

BOULTER: What has to come out of this, still, is accountability for decisions physicians make. What worries me is that there will be a view among physicians that they've won. They won't have to call the 800 number, but they still are going to be accountable for their performance.

LAMB: Our notion of quality and accountability is going to be redefined over the next couple of years, with the upswing in the premium cycle. Quality didn't differentiate plans when prices were stable, and I think that has a lot to do with Bill's point, that docs are in multiple networks.


Toan: The network model is fatally flawed, and something has to change to fix it. One physician I know is in 23 health plans, and he asks a valid question: Why are there 23 sets of rules for how I get a woman admitted for a hysterectomy?


TOAN: The network model is fatally flawed and something has to change to fix it. One [physician I know] is in 23 plans, and he asked a very valid question: Why are there 23 different sets of rules for how I get a woman admitted for a hysterectomy? Shouldn't the science be the same, regardless of health plan? Plans ought to compete on customer service or price. If we're going to keep networks, we're going to have to find consistency in the medical model, so it doesn't matter which plan you're in as to what the rules are for a hysterectomy.

BOULTER: The chief medical officers of competing plans in Massachusetts two years ago formed their own independent company. By doing this, they were able to do things like common credentialing forms, common preventive guidelines, common disease management guidelines — all things that make life for physicians easier but offer no competitive advantages for health plans and are costly. That brings up collaboration. Finally, we're moving to collaboration with public health to get health plans to deal with the fundamentals — obesity, smoking, these things. Single health plans cannot deal with that.

CROOKS: [Takes a question from the audience.]

QUESTION: Between public perception issues, the threat of class-action lawsuits, the United decision, and the fact that medical groups are going bankrupt because the prices have already been driven so low, managed care has lost most of its fundamental tools. What is the "end game?" And are employers and the government going to tolerate [resultant] 15-percent increases again?

GORMAN: What struck me when I heard Dr. Sullivan speak was that public health is an incredibly important part of our health system. It used to be what the system was all about. After World War II, we entered a period of what I call private health — we now take care of individuals' diseases, rather than eradicate epidemic-type things. But to have private health, it has to be in the context of public health. I think where we're heading is personal health, which has very little to do with public at all, and a system where patients will be given money and left to figure it out, because the system will be unable to agree how to provide health care collectively. That will change their behavior, and it will change the doctors' behavior, because if the person writes a check to the doctor, he'll be more aware of what they're getting.

LAMB: I couldn't imagine doctors getting out of the decision-making process and leaving it entirely to individuals. If you give the average senior citizen a choice of going in for that colonoscopy or keeping the money to see the kids for the holidays, they're going to keep the money. I tend to think we're about to see a new era of détente between health plans and providers. There's a lot of evidence that health plans have been managing costs, not care, and we're about to get into some soul-searching about what managed care is. We'll have to turn the physicians loose, but we'll have to align incentives to do so, and to make sure the money lines up to reinforce behavior.

GORMAN: I think we've had enough experience with managed care to understand what worked, what stopped working, and where we need to go. Whether we have the will is a different question. Group- and staff-model HMOs — Kaiser, Tufts, Harvard — provided high-quality care with good patient satisfaction and high physician satisfaction for a long time. Then they all started expanding to network models, and they all got into trouble because it was a different approach from what had worked. The thing that makes Mayo work is all of those guys know each other, and when they've got a patient — whether in Rochester or Scottsdale or Jacksonville — they can pick the phone up and talk to somebody who they know and trust and have an informal consultation. That's what has made group practice work. [Its] model for combining the financing mechanism and the risk transfer and the alignment of incentives will be difficult to replicate all over the country. We have a profession that cherishes independence, with a lot of docs in groups of one or two. The group-practice model makes sense for providing good, high-quality care with professional and patient satisfaction at reasonable cost.

CROOKS: [Takes another question.]

QUESTION: We invest in disease management [because] probably less than 20 percent of the population spends 80 percent or more of health care dollars. Why not concentrate on areas that will get the biggest bang for the buck, and start spending on prevention? Preventing disease is a lot cheaper than treating disease. Second point: E-commerce. When is health care going to get into E-commerce, so doctors can get information they need to do the right thing? Most are crying for information, but few health plans can give it to them.


Gorman: Health plans will get out of the business of medical decision making, and simply market and sell insurance products, offload risks for chronically ill populations to specialty networks and companies, and provide massive information systems to physicians to help them fight disease.


GORMAN: Health plans are going to get out of the business of medical-decision making and simply market and sell insurance products, offload risks for chronically ill populations to specialty networks and companies, and provide massive information systems by which docs [can obtain] the data they need to fight costs by preventing disease. And then, I think we will probably find health plans provide real monetary incentives to people to act as smart health care consumers.

LAMB: About disease management: The problem is that when you make it available to the 20 percent you're talking about, they don't want any part of it. It's got to be the patient's problem — in other words, "Here's the deal. You get $7,000 a year. You can take it in salary or buy insurance with it." And that is where consumerism and the financing mechanisms are going. It will become about commitment — whether to quit smoking, for example. That's the problem you get when you expect the HMO to promote quality: They're trying to help other people. And I don't think that that works. People have to figure it out for themselves.

JESSEE: Isn't that the philosophy of public health?

LAMB: I'm telling you, public health was 50 years ago. Take Healtheon/WebMD. That is consumer-patient focused. The Internet is not focused on aggregation, but individuals. It's not a group process any more. [The health care system is] going to say, "Obesity is your problem, not ours." Pharmaceuticals are a great bridge to this, because they provide a solution to the individual. We're moving into a patient-centric, consumer-centric environment.

JESSEE: If I want to buy a house in the mountains outside of Denver, and the nearest fire department is 13 miles away, that's my choice — but I'd have to pay a lot more for fire insurance than I do for my Denver home that's 100 feet from a fire hydrant. We don't do that with health insurance. I think we ought to look at underwriting surcharges or higher deductibles or copayments for people who choose such lifestyle alternatives as "I like being fat, because it makes me feel good." Fine, but you shouldn't pay the same for health insurance as someone who chooses to be leaner. If there are factors outside your control, like genetics, that's different. [Regarding E-commerce,] the information revolution is going to change everything. [Providers] are capital-poor, and that's one reason health care has been slow to adopt modern information-management methods. The Internet's changed all of that. The Internet is like your water system. When you wash your hands, there is a water-delivery device that is extremely simple. All you have to do is turn a handle and it delivers. Computing has not been like that. The end devices have been complex, and that's been a major barrier, particularly for small medical practices. But with the Internet, you can have 10 physicians using 10 different systems, because each can go to a terminal and pull it up off the Internet. So over the next two to three years, you are going to see a total shift in the way we manage patient information, and communicate with patients.

CROOKS: [Takes a question.]

QUESTION: To move ahead with quality, we'll need intellectual leadership from someplace. I see some refugees on stage: John has left government, Steve is leaving NCQA, Bill has left AMA. Someone has to take the lead. I haven't seen a new idea come out of managed care in 10 years. Where is that spark going to come from?

JESSEE: The American Association of Medical Colleges had a simple answer to that: We are going to make quality part of the medical education process, which it is not now. In fact, they'll make it part of the boards for physicians. I think there is a new appreciation among the regulators of medical education that they need to make physicians champions of quality. Who will champion it on the consumer side is a challenge. We hope NCQA or others would. Consumers are not interested. We ran a survey and asked, "What are the top things you would be interested in knowing about the doctors in our network?" Number 1 was, "I want a picture." Number 2, "I want to know whether they're married and have kids." Board certification and quality parameters weren't on the radar screen. We have a fundamental challenge to [change] that.

CROOKS: Thank you, panelists.


Payor, Provider, Patient: Healthcare by Consensus

INTRODUCTION AND WELCOME

Old Saying Appropriate For Current Environment

David Brennan, Senior Vice President, Commercialization and Portfolio Management, AstraZeneca Pharmaceuticals

KEYNOTE

Health Status, Health Maintenance, and Health Care in the 21st Century

Louis Sullivan, M.D. , President, Morehouse School of Medicine;
Secretary, U.S. Department of Health and Human Services, 1989–1993

PANEL DISCUSSION

Health Care Reform: Payor, Provider, Patient

PANEL DISCUSSION

Health Care Reform: The Consumer's Viewpoint

KEYNOTE

Changing the Public's Image of Managed Care

Nancy Wilson Dickey, M.D. , Immediate Past President and member, executive committee, AMA

PANEL DISCUSSION

Treating Diseases and Managing Cost

MOTIVATIONAL PRESENTATION

The Power of Perspective

John Cassis, President, the Cassis Group


The 12th Annual Symposium for Managed Care Professionals was held November 11–13, 1999 in Scottsdale, Arizona, and was sponsored by AstraZeneca.

The opinions expressed in this special supplement are those of the symposium participants, and do not necessarily reflect the views of the sponsor or the publisher, editor, or editorial board of Managed Care.

PHOTOGRAPHS BY DENNY COLLINS