Mandated benefits: a misguided effort

The U.S. Congress is toying with the creation of universally mandated benefits for health care, most specifically in the health care reform proposal offered by the Clinton Administration. The notion of mandated benefits has already become a part of the health care scene in insurance and managed care plans. Instead of benefiting U.S. citizens as a whole, however, mandated benefits are likely to result in a reduction in health care accessibility and quality. The reason is that mandated benefits consume a continuously growing portion of the health care pie. Deming demonstrated that quality brings lower costs, but to obtain quality we must commit adequate resources. The free allocation of resources is negated by mandated benefits.     

How should managed care physicians be paid?

When paying a physician for medical or surgical services, most patients expect the traditional bill or charge for that encounter or visit. While most people also pay health insurance premiums, few patients expect to prepay for their health care. But that is the foundation of most managed health care systems-prepaid medicine. PPOs, IPAs, and HMOs are typically health care providers linked together to provide services to a set population for a specific prepaid fee or "capitation" payment. Other providers contract with these managed care insurers to receive a predetermined and often "discounted" professional fee for services. These managed care organizations have already gone through a number of stages in determining how physicians are to be compensated for their services, and further changes loom on the horizon.     

Surfing Stark II: prohibition against self-referrals

In 1989, the Chairman of the House Ways and Means Subcommittee on Health, Fortney (Pete) Stark (D.-Calif.), turned the health care industry on its ear by introducing the "Ethics in Patient Referrals Act" to Congress. The bill, commonly known as "Stark I," prohibited physician referrals to entities in which they held a financial interest. As Stark's bill made its way through Congress, its substance was dramatically reduced by the legislative process. Ultimately, the law was incorporated as part of the Omnibus Budget Reconciliation Act of 1990. Stark I's main thrust is that it bars physicians from referring Medicare patients to clinical laboratories with which they have a financial relationship. Furthermore, laboratories providing those services must report information concerning any ownership arrangements between the referring physician and the laboratory. Now, to complicate the picture, providers must contend with amendments to the original law that extend the reach of its prohibitions. Called "Stark II," these amendments took effect on January 1, 1995. In this article, guidelines for dealing successfully with the requirements of the law are outlined.     

What happened, what next?

Many physicians and other health care professionals breathed a collective sigh of relief when the 103rd Congress adjourned without passing the Clinton Health Security Act or any other health care reform legilsation. The ambition of this brief paper is to describe why health care reform did not pass in 1994, the issues that need to be resolved if we are to pass legislation, the political forces that will need to be addressed before legislation is passed, and the type of struggles we can expect to see in the coming session of Congress.     

The future of managed care: the debate continues

The Patient Access to Affordable Care Act has acted as a catalyst in the health care debate over the future of managed care. The Employee Retirement Income Security Act, once a sacred cow, is now under intense scrutiny. Congress is laying the ground work to create consumer protections in health care, but time in this legislative session may run out. If Congress acts this year, there could be a fundamental shift in the control over health care.     

The impact of health care reform on group practice

Just two years ago, it would have been very difficult to imagine that reform of the health care system would today be a national domestic priority and that Congress would be considering one of the most significant and far-reaching pieces of legislation in the past 50 years. The issue is still in doubt, but it seems clear that, in this session of Congress or the next, legislation of far-reaching consequences will likely be passed. In fact, change on a widespread scale has already begun. During 1993, every state legislature except those of Nevada and Wyoming considered measures that would alter the way medical care is financed and delivered. Of the states that acted, both last year and in recent legislative sessions, eight have passed laws with the ultimate objective of ensuring access to medical care for all citizens. Government, at both the state and federal level, is clearly taking on the health care issue. The impact of reform on physicians, and thus on group practices, will be substantial. This article outlines the current course of health care reform and addresses its specific implications for the management of group practices.     

The future of American health care in the "post-reform" era

"As the debate over health care reform rages in Washington, the market is reforming itself. For any given market, it's a question of 'How soon will it hit?', not 'Will it hit?'" Health care reform and market restructuring are ushering in a new era of integrated health care. Although the future is not fully clear, there are at least three competing models for the creation of regional and statewide health systems that will integrate the financing and delivery of services to large enrolled populations of consumers: Payer-driven networks. Provider-sponsored systems. Partnership models. Whatever the future scenario, physician executives will play a larger, more dominant role. Research on integrated health systems has identified three critical success factors for future success: physician-hospital integration, clinical integration and information integration. For managed care to be successful, there must be clinical leadership. The essence of managing care is clinical efficiency, based on "critical-path" treatment protocols and real-time patient care management, supported by integrated information systems.     

Demand rising for medicine's rarest birds

The prognosis from most quarters is that the U.S. health care delivery system is moving inexorably toward managed care. The final form that managed care takes under whatever health reform measure finally takes shape in Washington is still in doubt, but it is clear that care will be managed in the future. It also seems increasingly clear that the system evolving will require more primary care providers, and that they will occupy some very key decision-making roles in the clinical firmament. In this article, staff writer Donna Vavala brings together the thoughts and predictions of several health care leaders on this critical topic in medical management.     

The great health policy debate of 2010

Moderator: Good evening. Tonight I will be moderating a debate on the Health Care System Salvage and Coverage Overhaul Act of 2010 (Senate Bill 1, with companion legislation in the House). The bill is awaiting final congressional action, and the issue is considered so important that all 14 major television networks are carrying this debate live, along with many radio networks and at least 1,873 Internet/World Wide Web sites. As you know, S.B. 1 would provide immediate federal aid to the 1,000 hospitals and health care systems that are currently in bankruptcy; extend government-subsidized coverage to the estimated 90 million Americans who lack it; return to the federal government a wide range of health care regulatory and payment activities that had been transferred to the states; and prohibit certain types of health care enterprises and services, chiefly proprietary delivery and managed care systems. At the moment, the chances of its passage are too close to call. Arguments in support of S.B. 1 will be presented tonight by Sen. Joseph P. Kennedy II, Democrat of Massachusetts; arguments in opposition to the bill will be presented by Sen. George W. Bush, Republican of Texas; and the view of the Independent Party will be presented by former Kansas Senator Nancy Kassebaum, who also speaks as chairman of the National Nonpartisan Commission to Save American Health Care. Senator Kennedy will begin.     

Building a vertical provider system

There is probably no geographic area in the United States in which the health care environment is more turbulent than that of Southern California. Long before President Clinton's proposals began serious national debate on health care reform, a massive provider-driven realignment of the system was occurring in that region of the country. Multispecialty medical groups have generally led the way and have acquired ever larger managed care populations through merger and acquisition of other groups and practices. Hospitals, hampered by large fixed capital bases, have struggled to reinvent themselves as cost-effective and primary care-friendly environments in order to be attractive to managed care physicians. Almost ignored in this reconfiguration has been the university teaching hospital. This article discusses one attempt to reconcile contractually an integrated, capitated, and managed care-oriented health care system with an academic medical center in a strategic alliance.     

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.     

Primary care: the driver in health care reform

The changes occurring in the health care industry have resulted in a cost-quality competition that has not been present in the past. Because of this competition, managed care is a growing way of financing and providing health care to the people of the United States. Managed care depends heavily on competent primary care physicians. Because primary care physicians are in short supply, the status and financial rewards of primary care practice are increasing. The primary care physician will be the dominant force in medical practice in the immediate future. He or she is capable in a managed setting of resolving the perceived problems of the health care industry in responding to the drivers of health care reform. Costs are reduced while quality is maintained. Access to health care is improved, and fragmentation of health care is significantly lessened.     

Medicare and Medicaid: the first successful effort to increase access to health care

The passage of Lyndon Johnson's health care legacy, Medicare and Medicaid, in 1965 represents the last time that health reform legislation expanding access to care was successfully proposed and implemented in the United States. Access, of course, represents only half the pie in health reform, the other part being the organization of the health care system. There has never been any major legislation passed through both houses of Congress and signed by a President that changed the organization and delivery of health services. It seems certain that President Clinton will propose legislation dealing with both access to and organization of our health care system. Though it may not have seemed so at the time, President Johnson had it easy compared to the challenges confronting President Clinton.     

A conversation on the future of health care

An extensive amount has been written, reported, and spoken on health care reform. It is a time of turmoil and uncertainty in the health care field. There is a great deal of talk at the federal level on reform, but efforts there seem to be at least temporarily stymied. Much is happening at the local and regional level, however, as the health care field itself wrestles with the changes that have already occurred and with the promise of changes that lie ahead. In the following conversation between two fictional physician executives, one with many years experience, the other his junior, some of the issues surrounding health care reform are discussed. Although the specific environment for the conversation is managed care, most physician executives will find themselves somewhere in the conversation. let's eavesdrop as they speak, in the late summer of 1994.     

Contracting United States Government Work: Organizational and Constitutional Models

Much of the basic work of the U.S. federal government is performed by private contractors. This reliance on contractors is not new. It is the product of bipartisan reform that dates to the mid-20th century. The reform has yielded major successes, but has left a legacy of unaddressed questions, including the ability of the official workforce to account for the government's work. This article recounts the history of the ongoing reform from two viewpoints. First, it reviews organizational models that serve as building blocks for the relationships between organizations and contractors. Second, it focuses on the constitutional models within which the organizational models operate. The underlying argument is that the early reformers identified questions of constitutional significance that have yet to be resolved, and at least three models for their possible resolution concurrently exist.     

The rest of the spectrum: alternatives to managed competition

In the November-December 1993 and January 1994 issues of Physician Executive, Kevin Fickenscher, MD, and David A. Kindig, MD, PhD, described the Clinton health reform plan and the Senate Republican Task Force proposals. At either end of the political spectrum are other proposals that are options to the managed competition model. This entry in the column is the last in a series that outlines the major proposals pending before Congress. It and the others are intended to highlight the major elements of the proposals, not their details. "A Matter of Policy" is jointly edited by Drs. Fickenscher and Kindig of the College's Forum on Health Policy.     

Managed care matures. What's behind the wave of anti-HMO legislation?

At first glance, it may appear as if managed care itself may be doomed. The avalanche of bills, measures, initiatives, Federal regulations, etc., seemed overwhelming in late 1996. Did this, in fact, portend a national shift away from managed care? What does the consumer protection and regulatory activity really mean? What directions for the future can be identified? This article seeks to answer those questions and highlights a case study of "reform gone awry" that may hold lessons for the national scene. The anti-HMO legislation activity does not represent a repudiation of managed care. Rather, it may be seen as a maturing of the entire process of redefining our medical delivery and financing system.     

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.     

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.