Lecture 9/Chapter 9 Flashcards
1
Q
Managed care and integrated organizations: Learning Objectives
A
- Link between the development of managed care and earlier organizational forms
- Basic concepts of managed care and cost savings
- Main types of managed care organizations
- Distinguish between types of managed care organizations
- Advantages and disadvantages of different HMO models
- Why managed care did not achieve its cost-control objectives
- Driving forces behind organizational integration and integration strategies
- Describe highly integrated health care systems
2
Q
managed care and integrated organizations
A
- managed care fundamentally transformed the delivery of health care in the US
- added a third party -> the health care you can receive according to insurance policy rules
- ACA did not obliterate managed care
- employer sponsored insurance enrolled fewer than 1% of employees
- managed care originated in the US and its tools spread internationally
- why so popular?
3
Q
what is managed care
A
- integration of financing, insurance, delivery, and payment within one organization
- an organized approach to deliver comprehensive services to enrolled members
- through efficient management of services
- negotiation of prices with providers
- a concept or plan
- formal control over utilization…ACCESS*
- integration of:
- financing
- insurance
- delivery
- payment
4
Q
evolution of managed care
A
- contract practice takes capitation further by incorporating a defined group of enrollees
- prepaid group practice
- accreditation of managed care organizations
- quality assessment in managed care
5
Q
prepaid group practice
A
- principles of capitation, bearing of risk by provider, group of enrollees financed by employer
- delivery of comprehensive services
6
Q
growth of managed care
A
- flaws in the fee-for-service model
- employers response to rise in premiums -> employers were looking for more affordable options to offer to employees
- weakened economic positions of providers
7
Q
flaws in the fee-for-service model
A
- uncontrolled utilization
- uncontrolled prices and payment- couldnt regulate how much was charged only how much was reimbursed
- focus on illness rather than wellness
- (Manage care promotes wellness)
- indemnity insurance allowed the insured to get services anywhere, without restraint (no capitation)
- moral hazard prevailed, along with provider-induced demand
- itemized billing of charges by the provider to the insurer
- few, if any controls over the amount of payment
- insurers functioned simply as passive payers of claims
- sickness coverage, no coverage for wellness and prevention, no control over HOSPITILIZATIONS
8
Q
efficiencies and inefficiencies in managed care
A
- integrating the quad functions of health care delivery
- MCOs control costs by sharing risk with provider or extracting discounts
- cost savings
- administrative inefficiencies created for providers
- contracts with providers exclude some services
9
Q
cost control in managed care
A
- choice restriction -> closed panel and open panel
- care coordination
- disease management
- pharmaceutical management
- utilization review
- practice profiling
10
Q
pharmaceutical management
A
- 3 strategies:
- use of drug formularies- list of covered drugs
- use of tiered cost sharing
- use of pharmacy benefits managers (PBMs)
11
Q
utilization review
A
- prospective utilization review
- concurrent utilization review
- retrospective utilization review
12
Q
health maintenance organization (HMO)
A
- type of managed care organization
- staff model
- group model
- network model
- independent practice association model
13
Q
preferred provider organization
A
- type of managed care organization
- establishes contracts with a select group of physicians and hospitals
- type of MCO that forms a contract with a select group of providers of hospitals (preferred providers)
- Fewer restrictions
- More expensive
- Offers open panel
- Discounted fee arrangements with providers (NOT CAPITATION) -> DRGs and Bundle payments
- No direct risk sharing with providers
- Negotiated
- Most popular
- Usually no gatekeeper
14
Q
point of service plans
A
- types of managed care organization
- combine HMO and PPO options
15
Q
trends in managed care
A
- employment based health insurance enrollment
- medicaid enrollment- primary care case management (PCCM)
- medicare enrollment and payment reforms
16
Q
influence on cost containment
A
- backlash from enrollees and providers prompted MCOs to end aggressive cost control measures
- it was too restrictive at first
- forced MCO to come up with options -> PPO
17
Q
impact on access
A
18
Q
influence on quality of care
A
-HMO and non-HMO plans provided roughly equal quality of care
19
Q
3 reasons for discontentment toward managed care
A
- employers switch to manage care to restrain costs of health insurance premiums
- insured did not see a reduction in their premiums or out of pocket expenses
- physicians hostile towards managed care
20
Q
regulation of managed care
A
-2 types of state legislated statutes
Any Willing Provider
-Requires admission of any provider into a network as long as the terms and conditions of the network are abided by.
Freedom of choice
-Require MCOs to allow their enrollees to seek care from providers outside the panel and not be penalized for it
21
Q
integration strategies
A
- mergers and acquisitions
- joint ventures
- alliances
- horizontal integration
- vertical integration
22
Q
basic forms of integration
A
- major participants in organizational integration have been physicians and hospitals
- clinical and nonclinical entities may be involved
- management services organizations
- physician hospital organizations
- provider sponsored organizations
23
Q
highly integrated health care systems
A
- integration in the US health care system continues to intensify
- organizational integration does not negatively affect the quality of care
- integrated delivery systems
- accountable care organizations
- payer-provider integration
24
Q
summary
A
- participation in the HEDIS program improved the quality of services provided by MCOs
- growing power of managed care triggered integration among health care providers
- highly integrated organizations are held accountable
- must achieve specific objectives related to costs, quality, and consumer satisfaction
25
high deductible health plan (HDHP)
- seen in high paying people
- portion of check is taken out to save for health services
- it builds overtime and carries over
- you can use that money later is you pay a fee
26
iron triangle
- refers to the system
| - not us
27
financing
-negotiation of premium with employers
28
insurance
-the MCO assumes insurance risk
29
delivery
- MCOs own physicians and hospitals or contracts with providers
- will they be independent but have a contract
- will they be employed by them
- what hospitals can they go to and see
30
payment
- risk sharing- between the provider and the insurance company
- MCO needs to provide an incentive for the providers not to over utilize services -> reimbursement is less
- payer (MCO) and the provider are sharing the risk
- capitation
- discounted fees
- salary
- cost containment
31
capitation
- a limit
- ex. MCO (insurer) has a contract with the providers that the insurance company will pay the doctor a set amount each month for the services they provide -> regardless of how many people they see or dont see
- risk sharing for the insurance company and the provider!
- need to meet certain quality standards
- accountability is shifted to the provider
- prepaid (prosceptive) payment
- monthly payment from the insurer to the provider -> no more no less then the set amount
- risk is shifted from the MCO to the provider
32
baylor plan (1929) was based on capitation
- 1929- 50 cents per month for 21 days of hospital care per year...pre-paid
- blue cross plan is modeled from it
33
managed care
-added utilization control to the other features
34
alternative forms of managed care
- prepaid group practice led to HMOs which incorporated management of utilization
- competition between HMOs and commercial insurance led to other MCO forms, such as preferred provider organizations (PPOs) -> tells you who you can see as your doctor
- HMO is employed by the MCO
35
accreditation of MCOs
- the national committee for quality assurance (NCQA)
- participation is voluntary, but about half are accredited
- a national committee of physicians supervises the accreditation process
36
healthcare effectiveness data and information set (HEDIS)**
- report card
- quality assessment in MCOs
- mortality rates, reviews
- managed care is a business -> this is how they market it for more members
- HEDIS results are used by employers, the public, public insurers, and regulators
- over 90% of health plans use HEDIS
- 2013 HEDIS has 80 measures in 5 domains
- care effectiveness
- access to and availability of certain services
- client experience of care
- utilization of care
37
employers response to rise in premiums
- initially there was limited appeal for HMOs (not popular)
- employers were passive
- double digit premiums rises during the 1980-1990 period forced employers to abandon indemnity plans (fee for service)
- became so expensive they were forced to shift to HMO
38
providers weakened economic position
- excess capacity in hospitals (brought on by PPS)
- physicians gave in to the momentum of managed care
- participate or be left out
39
efficiencies in managed care
- elimination of insurance and payer intermediaries
- risk sharing with providers promotes economically prudent delivery of health care
- providers are capped -> they think about if the services is really necessary -> reduce costs
- monitoring the delivery of services for appropriateness
- delivering care in cost efficient settings (outpatient instead of inpatient)
40
inefficiencies in managed care
- complexity for providers of having to deal with numerous plans
- laboratory and some other services are carved out, creating inconveniences for patients and providers
- lengthy appeals for denied services
41
the need for cost control
- 10% of patients with chronic/complex conditions account for 70% of health care spending
- hospital services cost about 50% of all medical care
42
utilization management requires
- expert evaluation of what services are needed
- determination of how to provide services inexpensively without compromising quality
- review of the process of care
43
cost control methods
- choice restriction
- gatekeeping
- case management
- disease management
- pharmaceutical management
- utilization review
- practice profiling
44
choice restriction
- closed panel- (in network access) no access outside the panel -> you can only see providers within the network
- open access (out of network access) - outside option is allowed, but at a higher out of pocket cost
- there is a greater willingness among enrollees to reduce out of pocket costs -> control method
45
gatekeeping
- primary care physician (PCP) as portal of entry
- PCP delivers basic and routine care
- PCP refers and coordinates when secondary care is needed
- gatekeeping achieves modest cost savings
46
case management
- coordination of care for complex and potentially costly cases
- a variety of services from multiple providers are needed over an extended period of time
- cost savings have been achieved with better delivery of care and reduced hospitalizations *
47
disease management
- population oriented strategy for chronic problems
- evidence based treatment guidelines
- focus on education, self management training, monitoring of the disease process, and follow up to ensure compliance- self care with professional support
- goal- prevent or delay complications
- although cost savings are uncertain, better quality and disease control are achieved
48
pharmaceutical management
- 3 main strategies
- drug formularies
- tiered cost sharing
- pharmacy benefits management companies
49
utilization review (UR)
- review each case
- determine appropriateness of services
- access the process and improving
- to ensure cost efficiency
- plan subsequent care
- quality of care is an important component
50
prospective UR**
- gatekeeper decision to refer or not
- Preauthorization (precertification) guidelines for hospitalization and assign initial length of stay
- Informs concurrent review about the case in order to monitor and additional days of care can be authorized if necessary
- For pharmaceuticals:
- formularies are the first step
- preauthorization for certain drugs and biologics
51
concurrent UR**
- Determines length of stay and when to discharge on a daily basis
- Monitors ancillary services and appropriateness
- Critical for prospective reimbursement hospitals because length of stay = profit
- Optimal drug therapy and management reduces length of stay and reduce drug utilization and cost
52
discharge planning
- purpose- post discharge continuity of care
- expected in patient stay
- anticipated outcomes
- subsequent appropriate setting
- special needs
- dont want them coming back with problems
- quality
53
retrospective UR
- examination of medical records
- analysis of utilization after the fact (overutilization or underutilization)
- billing accuracy
- review of practice patterns and feedback to physicians
- drug review- inappropriate use of controlled substances
54
practice profiling
- evaluate provider-specific practice patterns
- compare to a norm
- feedback to change behavior
- goal- improve quality and efficiency
- which providers are the right fit
55
case manager
- takes each case and coordinates with all other care providers (lab work, rehab,)
- coordinate level of care -> no overutilization or under
56
types of MCOs
- many of insurers offer HMO and PPO plans
| - many HMos offer triple option plans that combine the features of indemnity insurance, HMO, and PPO
57
HMOs
- most restrictive
- type of MCO
- these are the providers and services you can use
- emphasize preventive care -> WELLNESS (under the ACA, however, all health plans must include preventive services) -> costs less bc less hospitalizations
- PCP as gatekeeper
- capitation
- in network access (except hybrid and triple-option plans) -> carve outs for special services
- standards of quality
58
PPO- preferred provider organization
- way of compromising
- enrollees have more options for the providers they can see as long as they are in the list
- accept the payment schedule negotiated
59
HMO enrollment
- rapid growth in early 1990s which peaked in 1996
- PPO and POS (Point of service) plans became popular (bc more options)
- conversely, the majority of medicaid and medicare advantage beneficiaries are enrolled in HMOs
60
expensive MCO
- least expensive to most
- HMO
- PPO
- POS
61
HMO models: staff
- employ physicians on salary
- contracts for only uncommon specialties and hospital services
- pros:
- exercise4 control over physicians
- convenience of one stop shopping
- cons:
- fixed salary expense can be high
- expansion into new markets is difficult
- limited choice of physicians
62
HMO: group model
- contract with a single multispecialty group practice separate hospital contracts
- group practice is paid a capitation fee
- pro:
- no salary or facility expenses (as in staff model)
- well known practice may lend prestige
- cons:
- difficulty with service obligations if a contract is lost
63
HMO: network model
- contract with more than one group practice
- variations:
- contracts with only PCPs who are financially responsible for specialty services, or
- separate contracts with PCPs and specialists
- pros:
- wider choice of physicians
- cons:
- dilution of utilization control
64
HMO- IPA model
- separate entity from the HMO
- HMO contracts with IPA (independent practice association)
- IPA (not HMO) contracts with providers
- pros:
- eliminates the need to contract with various providers
- transfers financial risk to the IPA
- choice of providers *
- cons:
- difficulty with service obligations if a contract is lost
- dilution of utilization control
- generally, a surplus of specialists
65
PPOs
- both in network (preferred providers) and out of network access (an exclusive provider plan does not permit out of network use)
- most common MCO plan
- discounted fees are used to pay providers (no direct risk sharing)
- generally, no gatekeeping and other controls
- PPOs enjoy the highest enrollment (in employment based insurance market) of all managed care plans
66
POS plans
- cross between HMO and PPO
- point of service plan
- most expensive
- HMO features are retained (utilization controls, capitation)
- PPO feature- open access option available at the point of service
- later the need for POS plans became less important
- HMOs relaxed utilization controls
- PPOs already offered out of network access
67
managed care and health insurance exchanges
- managed care plans are expected to e dominant players in the exchanges established under the ACA
- at group rates
- plans must comply with ACA mandates:
- must include essential health benefits
- must comply with the medical loss ratio requirements
-federal funds are provided to start CO-Ops -> consumer operated and oriented plans
68
medicaid enrollment
- 71% of beneificiaries enrolled in managed care in 2009
- primary care case management (PCCM) is used in some rural areas
- enrollee must choose a PCP
- the PCP is paid extra for coordinating care
69
medicare enrollment
- level of participation in part C depends on the amount of reimbursement
- payment cuts prompt HMOs to drop out of the program
- in 2013, 28% of medicare beneficiaries were enrolled in managed care
- premiums are lower than if you did not choose C
70
managed cares impact: cost
- managed care provides better value than indemnity insurance
- backlash from consumers nd providers diluted cost control efforts
- managed cares full potential was not realized
- future cost reduction efforts may not materialize without restrictions on utilization
71
managed cares impact: access
- good access to primary care and preventive services in certain key areas
- on a larger scale, impact on access is not well established
- did not take care of uninsured and underinsured -> ACA
72
managed cares impact: quality
- overall quality of care in MCO plans has been equivalent to traditional FFS
- no evidence of skimping on care bc of capitation
- based on several measures, quality may be higher in MCO plans
- quality may be lower in for profit plans vs. nonprofit plans
73
regulation of managed care
-federal: newborns and mothers health protection act, 1996 -> couldnt release mothers and babies before specific time
-numerous laws across states, e.g.,
-limits on utilization based financial incentives to physicians
-quick appeals and external reviews
-mandated benefits
-right to seek redress in courts
-
74
managed care aftermath
- better relations with providers
- relaxed utilization controls
- organizational integration shifted power in favor of providers
- cost spiral hasnt been cured
- the ACA promise of lower costs and better access may impact managed cares future
75
quality assessment in MCOs
- healthcare effectiveness data and information set (HEDIS)
- HEDIS results are used by employers, the general public, public insurers, and regulators
- over 90% of health plans use HEDIS
- 2013 HEDIS has 80 measures in 5 domains:
- care effectiveness
- access to and availability of certain services
- client experience of care
- utilization and resource use
- information on the health plan
76
HMO models
- staff
- group
- network
- independent practice associations (IPAs)
77
fee for service promoted
- price controls
- moral hazard
- provider induced demand
- both B and C**
