Purchasers and the impact of managed care on physicians

In much the same way that demands by managed care organizations are shaping the way physicians practice, health care purchasers impact how managed care organizations operate. Corporations purchase managed health care through their employee benefits programs, and understanding the language, objectives, and limitations of these purchasers is essential to grasping the forces influencing managed care organizations and the modern practice of medicine. The emergence of value-based purchasing as a strategic corporate approach to health benefits programs will dictate the forces on physicians, hospitals, and managed care organizations for years to come. These forces have already led to price reductions, health plan accreditation, employee-directed report cards, outcomes management, and organized systems of care, and they will determine the broad outlines of the emerging U.S. health care system.     

Twenty steps to survive managed care.

The health care industry is in the midst of discounted, price-driven, managed care. Many older physicians, not wanting to practice in this environment, are opting for early retirement. Others sell their clinical practices to management companies or hospitals to avoid the economic reality of day-to-day financial management. Most of these private practices are losing money every year. However, there still are a large number of physicians who have not sold their practice. As capitation continues to grow, these physicians will experience severe cash flow problems unless their financial plight is addressed rapidly. If it is not, the resultant cash flow problems will cause accounts payable to grow. Twenty steps are outlined that a physician or group should take right away to maintain a healthy cash flow. These include: Instituting a nurse triage system, setting up an after-hours clinic, getting the co-pay at the time of service, implementing a patient satisfaction questionnaire, monitoring the capitation reports, and checking capitation lists.     

From managing access to managing care: the impact of primary care on health care delivery organizations.

Professional "revenge of the nerds" is currently taking place, as managed care evolves generalist physicians into new professional prominence. Primary care physicians are finding themselves at the center of health care market reform as health plans, insurers, and other financing organizations turn to them as the key to cost control. In short supply, they are prospering financially from the demand. As the source of patients, they are gaining in prestige from specialists and hospitals who once demeaned them. But these newfound roles are only the initial steps in the transformation of the primary care practitioner. The change that the generalists are experiencing is essentially managing access to care, not truly managing care itself. There are large and crucial differences between managing access to care and actually managing care. These differences are, in many ways, a higher calling for primary care practitioners as they refocus attention on patient outcomes, which will in itself result in a lower resource utilization above and beyond the crude controlling of access. What those differences are, what new roles they require, and what impact they will have on organizations that either house or contract with primary care physicians will be the focus of this article.     

The role of the coordinator of care

Regardless of the specific outcome of the current health reform debate in Washington, it is likely that major changes to the health care system are in the offering. These changes, many of which are already in place or imminent in some locations, will have a major impact on the evolving relationships between physicians and hospitals. Most expect that these changes will accelerate the development of integrated health care delivery systems that will compete in the marketplace for a mixture of public and private health insurance dollars. In this system of "managed competition," health care dollars will flow to those systems that can ensure the best clinical outcomes while using the least economic resources. In this scenario, competing collaborative health networks that can manage the continuum of care will be central to the health care delivery system. The economic and political ties between physicians and hospitals will become more closely linked as government and private payers of health care services foster the development of these integrated, value-based health care delivery systems.     

Legal implications of managed care arrangements

Prior to the 1980s, managed care was virtually nonexistent as a force in health care. Presently, 64 percent of employees in America are covered by managed care plans, including health maintenance organizations (20 percent) and preferred provider organizations (44 percent). In contrast, only 29 percent of employees were enrolled in managed care plans in 1988 and only 47 percent in 1991. To date, the primary reason for this incredible growth in managed care has been economic-market pressure to reduce health care costs. For the foreseeable future, political pressures are likely to fuel this growth, as managed care is at the center of President Clinton's national health care plan. Although there are numerous legal issues surrounding managed care, this article focuses primarily on antitrust implications when forming managed care entities. In addition, the corporate practice of medicine doctrine, certain tax issues, and the fraud and abuse laws are discussed.     

Managed care. Preserving the quality of physician work life

The cost reduction imperative of managed care represents a formidable challenge to the culture of medicine and the values of physicians. The unpredictability of practice has culminated in widespread disenchantment--medicine has lost some of the allure which previously attracted the "best and the brightest." To achieve the goal of increasing the work force of qualified primary care physicians, we must ensure that the practice of medicine remains intellectually challenging, personally gratifying, and that its demands are reasonable and realistic.     

Managed care in the pediatric subspecialty of neonatology. The challenges, impact, and consequences

As our health care system moves toward a more managed competition model, the delivery of pediatric and pediatric specialists' services, especially the intensive and procedural services of neonatology, will be impacted. Pediatricians and pediatric subspecialists cannot avoid being buffeted from the powerful market forces that are now driving revolutionary changes in our health care system; they, like nonpediatric physicians, are often concerned and bewildered about the new realities of the day.     

How practicing physicians are adjusting to managed care

Managed care is here to stay. In fact, for the foreseeable future, health care will become increasingly more managed each year. The purpose of this article is to help physician leaders and executives understand how clinicians are reacting and adjusting to managed care. Those of us who are doing primarily management activities have our own set of problems and adjustments. Sometimes we can be insensitive to the problems that physicians who are primarily treating patients can have as a result of managed care. Health care executives who are managing physicians or attempting to influence their behavior must attempt to understand clinicians' feelings, reactions, and coping mechanisms.     

The evolving role of the primary care physician

In today's climate of health care reform, the title of this article might more appropriately be "Is the Role of the Primary Care Physician Evolving or Going the Way of the Dinosaur?" According to Koop, primary care is in trouble. Whereas only 29 percent of U.S. physicians are primary care physicians, in Great Britain, 72 percent of physicians are primary care physicians and in Europe and Canada the average is 50 percent. Many U.S. primary care physicians are in the later stages of their careers and nearing retirement age. Unless the supply increases, this number will dwindle further. However, in 1992, only 14 percent of U.S. medical school graduates were headed for primary care careers. Even if the supply of primary care graduates were increased to 50 percent of the graduating medical school class, it would be well into the next century before the ratio of primary care physicians to specialists would be equal. Primary care is at a critical juncture and the next few years will decide the fate of the primary care physician. Given the state of primary care today, I believe that a fundamental look at the assumptions regarding the role of primary care physicians is in order. The current health reform movement has placed a major responsibility on primary care to solve many of the problems in health care delivery today, such as cost, utilization, and prevention. Many health care organizations are planning strategies involving primary care providers, and physician executives can play a key role in these decisions.     

Rolling back third-party intrusions in the practice of medicine

Formerly vaunted projections about the triumph of managed care over the provider-controlled health services industry now appear overly optimistic as consumer and provider opposition stiffens. Popular dislike of managed care and purchaser disenchantment over its failure to deliver on promises to control health insurance spending have created a strategic opening for rolling back third-party interference in medical practice. Employer frustration over rising premiums, compounded by workers' antagonism toward benefits restrictions and worry over the loss of government protection against managed care litigation, signals a radical overhaul in the way health insurance is offered. For many employers, substituting defined contribution for defined benefit plans and transferring ownership rights and responsibilities to employees is an attractive solution. Along with the growth of consumer-friendly health plans and a relaxation of onerous managed care practices, physicians can look forward to a restored doctor-patient relationship. This article identifies the forces pushing health care purchasers to adopt defined contribution plans and discusses the implications of such a movement on the physician-patient relationship.     

Ascendancy of primary care will create role intensification for physician executives

The need for physicians in management roles in the health care system has never been greater. And the years ahead will see that need broadened and intensified. To maintain their leadership role in medical affairs in hospitals and other types of health care delivery organizations, physician executives will have to envision provider organizations and systems that have not yet been conceived, let alone developed and implemented. They have to become totally open-minded and futuristic in their thinking. And they will have to help other physicians accommodate this new way of thinking if the medical profession is to continue in a leading role in health care matters. Although numerous factors will have to be anticipated and analyzed by these new physician leaders, the ascendancy of primary care in a managed health care world long dominated by the technical and technological superiority of hospital care will present a particular challenge to the physician executive.     

Building a framework to transform health care

Advances in information technology are helping clinicians to realize the promise of evidence-based medicine, which includes benchmarking, outcomes monitoring, predictive modeling, and clinical pathways. By integrating individual clinical expertise and the best available research, physicians can apply the disciplines and techniques of clinical research to their practice of medicine, one patient at a time. Evidence-based medicine also allows organizations to move forward with continuous clinical quality improvement programs. Standards, open systems, data warehouses, and evidence-based medicine help a health care delivery system obtain the technical infrastructure, decision-making processes, analytical skills, clinical databases, predictive models, and clinical pathways. With this information technology (1) physicians can practice evidence-based medicine and (2) the delivery system can profile clinicians' practice habits for managed care contracting and continuous clinical quality improvement.     

The new health care civilization: integration of physician land and manageria

Changes occurring in health care demand that physicians expand their professional knowledge and skills beyond the medical and behavioral sciences. Subjects absent from traditional medical education curricula, such as the economics and politics of health care, practice management, and leadership of professional organizations, will become important competencies, particularly for physicians who serve in management roles. Because physicians occupy a central role in planning and allocating medical care services and other health care resources, they must be better prepared to work with other health care professionals to create a new civilization, even if this means leaving the cloistered domain of "physician land" to serve as interface professionals between the delivery of medical services and the management of health care. Our research findings and conclusions strongly suggest that economic, management, and leadership competencies need to be incorporated into the professional development of physicians, especially in postgraduate and continuing education curricula.     

Generalists or specialists--who does it better?

Managed care companies encourage primary care physicians to limit referrals to specialists and provide as much of the needed services themselves. As a result, generalist and specialist physicians are now in direct competition with one another. Is the care provided by generalist and specialist physicians different in terms of quality and cost? The authors reviewed the literature over the past five years and found 21 articles comparing the care between specialists and generalists. They realized asking who does it better, the generalists or the specialists, is the wrong question to explore. Physicians must come together to design systems of care that maximize the long-term health of patients and deliver care in a coordinated and efficient manner. The emphasis should be on creating value for the consumer across the continuum of providers and through time. Competition between generalists and specialists in a fragmented system only serves to further weaken the position of physicians in the health care industry.     

Economic feasibility of a primary care practice

To make informed career decisions, the new physician must acquire basic skills in medical management and health care economics and learn how to evaluate the potential survival and growth of a primary care practice. The authors have developed a model designed to aid physicians in determining the economic feasibility of establishing a practice in a specific community or joining an established practice.     

Primary care networks: choose your physicians wisely

As hospitals and health care systems maneuver for a position in the integrated health care delivery system, no initiative is more important than building an effective and competitive primary care network. Yet this critical initiative is fraught with potential pitfalls. In their haste to develop primary care networks, hospitals and health care systems may fail to thoroughly evaluate network participants and in turn create large, inclusive, and inefficient primary care networks that don't come close to breaking even, much less repay practice acquisition costs. In an effort to become more efficient, practitioners often find themselves in the unenviable position of "de-selecting" peers retrospectively. The author presents criteria for evaluating and selecting network physicians.     

Trends in managed care organizations: implications for the physician executive.

The rapid change in the managed health care industry is placing substantial demands on the managerial and leadership skills of physician executives. These changes are forcing a reevaluation of the fundamental principles of managed care organizations, specifically in terms of patient satisfaction, cost containment, and quality health care. Additionally, the physician executive will be confronted with substantial issues concerning future staffing needs. This article assesses the health care industry's environment to suggest where managed care is going and how physician executives should position themselves to optimize their position in the marketplace.     

The physician executive "arrives"--a new generation prepares for the future

The recent rise in the number of physician executives in the health care industry vividly demonstrates that a genuinely new generation of physician executives is seeking to combine the sensitivity of their clinical skills with the business acumen that today's health care organizations need to prosper and grow. But physicians who are preparing themselves to be selected one day as chief executive officers by hospitals, integrated systems, and managed care organizations should understand that the CEO role is radically different from that of the CEO of a physician practice. The corporate CEO role requires the management of managers and responsiveness to the organization's board. Those who imagine that the corporate CEO role bears any resemblance to the autonomous, independent existence of the practitioner are certain to have a rough time.     

Self-directed health plans: alternatives to managed care enabled by new technologies

Few people believed the Internet would have much impact on the delivery of health care services. However, combined with technological advances in how computer systems are structured and implemented and knowing what doesn't work in managed care from bitter experience, the Internet is being used to create a new paradigm of alternative health insurance products. These products hold the potential to change for the better the face of health care as we know it. Self-directed health plans will be less expensive than managed care programs and offer greater predictability in health care spending. For health care providers, SDHPs' reliance upon episode allowances will create a new market for packaged or bundled services. Providers will be paid to provide solutions, not just treatment. This could represent a new model in which physicians accept a risk-adjusted payment and provide a warranty that they will do whatever necessary until the patient has reached the reasonably expected health status. This is a radical departure from the fee-for-service or capitation system.     

Physician anger: leggo dem managed care blues--leadership beyond the era of managed cost.

While managed care has caused great disruption, it has also provided physician executives with a natural leadership raison d'être. Managed care, with all its pros and cons, is largely a response to certain unrelenting trends. The core functions of leaders comprise the stewardship of organizations and colleagues in response to these trends. Four trends are explored: (1) The demise of open-ended funding of American health care; (2) continued competition for health care resources; (3) thriving pluralism; and (4) patients continually adjusting to assure themselves of appropriate health care access, quality, and service. In the 21st century, the industry will need a new brand of leader, one capable of balancing the needs of the professionals with the business and accountability requirements of a permanently competitive and resource-constrained service industry. The keys to successful leadership in the future include: (1) Clear service differentiation and a compelling vision to match it; (2) recruiting and retaining top clinical talent, including the required return to physician self-direction and governance; (3) successful partnerships with others outside your organization; and (4) a steady focus on performance in all its dimensions.