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Issues in Healthcare > Lecture 9/Chapter 9 > Flashcards

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
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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?
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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
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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
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5
Q

prepaid group practice

A
  • principles of capitation, bearing of risk by provider, group of enrollees financed by employer
  • delivery of comprehensive services
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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
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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
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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
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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
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10
Q

pharmaceutical management

A
  • 3 strategies:
    1. use of drug formularies- list of covered drugs
    1. use of tiered cost sharing
    1. use of pharmacy benefits managers (PBMs)
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11
Q

utilization review

A
  • prospective utilization review
  • concurrent utilization review
  • retrospective utilization review
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12
Q

health maintenance organization (HMO)

A
  • type of managed care organization
  • staff model
  • group model
  • network model
  • independent practice association model
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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
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14
Q

point of service plans

A
  • types of managed care organization

- combine HMO and PPO options

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15
Q

trends in managed care

A
  • employment based health insurance enrollment
  • medicaid enrollment- primary care case management (PCCM)
  • medicare enrollment and payment reforms
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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
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17
Q

impact on access

A
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18
Q

influence on quality of care

A

-HMO and non-HMO plans provided roughly equal quality of care

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19
Q

3 reasons for discontentment toward managed care

A
    1. employers switch to manage care to restrain costs of health insurance premiums
    1. insured did not see a reduction in their premiums or out of pocket expenses
    1. physicians hostile towards managed care
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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

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21
Q

integration strategies

A
  • mergers and acquisitions
  • joint ventures
  • alliances
  • horizontal integration
  • vertical integration
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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
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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
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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
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25
Q

high deductible health plan (HDHP)

A
  • 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
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26
Q

iron triangle

A
  • refers to the system

- not us

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27
Q

financing

A

-negotiation of premium with employers

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28
Q

insurance

A

-the MCO assumes insurance risk

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29
Q

delivery

A
  • 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
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30
Q

payment

A
  • 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
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31
Q

capitation

A
  • 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
Q

baylor plan (1929) was based on capitation

A
  • 1929- 50 cents per month for 21 days of hospital care per year…pre-paid
  • blue cross plan is modeled from it
33
Q

managed care

A

-added utilization control to the other features

34
Q

alternative forms of managed care

A
  • 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
Q

accreditation of MCOs

A
  • 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
Q

healthcare effectiveness data and information set (HEDIS)**

A
  • 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
Q

employers response to rise in premiums

A
  • 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
Q

providers weakened economic position

A
  • excess capacity in hospitals (brought on by PPS)
  • physicians gave in to the momentum of managed care
  • participate or be left out
39
Q

efficiencies in managed care

A
  • 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
Q

inefficiencies in managed care

A
  • 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
Q

the need for cost control

A
  • 10% of patients with chronic/complex conditions account for 70% of health care spending
  • hospital services cost about 50% of all medical care
42
Q

utilization management requires

A
  • expert evaluation of what services are needed
  • determination of how to provide services inexpensively without compromising quality
  • review of the process of care
43
Q

cost control methods

A
  • choice restriction
  • gatekeeping
  • case management
  • disease management
  • pharmaceutical management
  • utilization review
  • practice profiling
44
Q

choice restriction

A
  • 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
Q

gatekeeping

A
  • 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
Q

case management

A
  • 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
Q

disease management

A
  • 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
Q

pharmaceutical management

A
  • 3 main strategies
  • drug formularies
  • tiered cost sharing
  • pharmacy benefits management companies
49
Q

utilization review (UR)

A
  • 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
Q

prospective UR**

A
  • 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
Q

concurrent UR**

A
  • 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
Q

discharge planning

A
  • 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
Q

retrospective UR

A
  • 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
Q

practice profiling

A
  • 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
Q

case manager

A
  • takes each case and coordinates with all other care providers (lab work, rehab,)
  • coordinate level of care -> no overutilization or under
56
Q

types of MCOs

A
  • 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
Q

HMOs

A
  • 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
Q

PPO- preferred provider organization

A
  • 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
Q

HMO enrollment

A
  • 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
Q

expensive MCO

A
  • least expensive to most
  • HMO
  • PPO
  • POS
61
Q

HMO models: staff

A
  • 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
Q

HMO: group model

A
  • 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
Q

HMO: network model

A
  • 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
Q

HMO- IPA model

A
  • 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
Q

PPOs

A
  • 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
Q

POS plans

A
  • 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
Q

managed care and health insurance exchanges

A
  • 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
Q

medicaid enrollment

A
  • 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
Q

medicare enrollment

A
  • 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
Q

managed cares impact: cost

A
  • 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
Q

managed cares impact: access

A
  • 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
Q

managed cares impact: quality

A
  • 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
Q

regulation of managed care

A

-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
Q

managed care aftermath

A
  • 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
Q

quality assessment in MCOs

A
  • 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
Q

HMO models

A
  • staff
  • group
  • network
  • independent practice associations (IPAs)
77
Q

fee for service promoted

A
  • price controls
  • moral hazard
  • provider induced demand
  • both B and C**

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