EDs faring better under managed care

Are emergency physicians warming up to the idea of managed care? Some industry insiders think so. Until a few years ago, the medical community's worst fears centered on the nightmare stories attributed to managed care organizations. The activities of HMOs in particular became synonymous with outside interference, prior restraint, and heartless cost cutting. Echoes of these complaints still ripple through some medical conferences.

But a lot has changed in recent years. Although HMOs still wield enormous power, their fortunes have dwindled, notably including large concerns such as Oxford Health Plans in Norwalk, CT, and Kaiser Permanente in Oakland, CA. Most have been hit with a dose of their own medicine in failing to control soaring costs and mismanagement. Their stock prices have fallen, and their senior management ranks have thinned. Last year, a Wall Street Journal headline aptly summed things up: "Managed-care systems are feeling sick."

Collectively, events seem to be inching downward for health plans in general. The industry has undergone widespread consolidation, which is continuing, and individuals within the public arena, from consumer groups to legislators and patients, have seemingly turned on HMOs.

Not emergency physicians. "Providers as a whole have learned to live with managed care. It's taken some time but we've been able to survive it," says Glenn Freas, MD, JD, an emergency physician and associate program director of the medical residency program at Allegheny University Hospitals in Philadelphia. That, according to some physicians, has given providers a different attitude toward managed care. They may not exactly be sleeping with the enemy, but they are at least willing to work in greater cooperation with the managed care system.

Emergency medicine has been among the hardest-hit areas in the conflict over payments, clinical decision making, and medical independence. Part of the reason has been the profession's clinical diversity and the legal constraints that bar EDs from refusing care, Freas says.

Emergency physicians have been quite politically active, and they've protected their turf against managed care's intrusion, Freas says. "Prudent layperson" legislation on the books in many states is proof of this, he adds. Perhaps it is that reason, he says, that emergency providers also have made the greatest gains against managed care.

Although difficulties remain, including prior authorization and the managed care bias against the necessity of unscheduled care, Freas says, most payers and providers have achieved a greater understanding of each other's concerns, especially in larger, mature managed care markets, he adds.

David P. Sklar, MD, sees things differently. Most emergency providers are working within the system while keenly aware that they must "draw the line where it needs to be drawn," he says. "Clinically, physicians have to retain the independence in deciding where that line is to be drawn," he says.

Sklar, an emergency physician at the University of New Mexico School of Medicine, says the reason providers have chosen to work within the system is clear: "We really don't have any choice about that," he says. On the other hand, many providers recognize the excesses of the past and how HMOs have imposed standards on the industry to become more efficient and cost-conscious.

"Managed care has awakened us to the necessity of questioning what we as a group had previously taken for granted - that there is unlimited capacity to health care resources."

Attitudes toward MCOs vary by region

But is the newfound attitude toward cooperation genuinely positive or simply rhetoric?

It depends where you go, says Larry Bedard, MD, past president of the American College of Emergency Physicians in Irving, TX. In regions that have seen very high managed care penetration, the consensus is likely to be quite strong in favor of working with MCOs, says Bedard, director of emergency services at Doctors Medical Center, San Pablo and Pinole Campuses, in San Pablo and Pinole, CA.

In areas where managed care penetration has been relatively low and most providers are only now adapting to capitation and heavily discounted fees, the attitude will obviously be quite different, Bedard adds. "Many of us [in California] are quite comfortable with managed care and have done quite well. So, it also depends to some degree on how you are doing financially," he says.

What concerns Bedard, however, is the public's growing hostility toward health plans. That, coupled with the fact that many physicians and hospitals are themselves getting heavily into managed care by forming their own MCOs and joining health plan medical boards, could hurt providers, Bedard says. "I'm afraid physicians may get caught up in the carping against managed care that's coming back into vogue, this time by the public," he adds. This time providers may get painted with the same brush in the publicanimosity toward payers.

Margaret D. Sabin, MHA, chief executive officer of Steamboat Springs (CO) Health Care Association, an integrated system, welcomes the newfound attitude. The early animosity kept health plans and emergency physicians from recognizing the potential of EDs to link hospitals and primary care physicians into a truly integrated system. "What EDs have not been able to do because of all the feuding is define their role in an integrated managed care partnership," Sabin says. That process is only now beginning to occur, she adds.

Perhaps, but providers know all too well the horror stories that sparked the feuding in the first place. In a February 1996 article in the Annals of Emergency Medicine, Harold H. Osborn, MD, who is now on the medical staff at Long Island College Hospital in New York, wrote:

"In July 1995 alone, we saw in our ED [at that time Lincoln Hospital in the Bronx] 1,477 HMO patients, representing 11% of the 13,153 patients seen that month. More than 48% of the patients in managed care plans seen that month were denied care by their HMOs, or denied treatment pending review. Many of the HMOs involved gave no telephone number at which to request coverage or supplied answering machines only. None provided a physician for telephone consultation."1

"Managed care in New York is now more a part of the problem than a part of the solution," Osborn concluded only two years ago. Osborn's views are far from unique.

In August 1997, the American Medical Association, which numbers its members at about 300,000, released findings of a broad-ranging survey of physician attitudes toward managed care. Surprisingly, the results were more in line with how providers felt a decade ago than a year ago.

For example, when asked whether managed care plans that insure their patients had a positive, neutral, or negative impact on clinical independence, 86% of respondents answered negative. Only 1% said the impact was positive.

In fact, in every area of medical practice except two, respondents' negative answers outranked positive ones. The two exceptions were affordability of care and preventive medicine. The other practice areas included quality of care, access to services, amount of time spent with patients, and early diagnosis.

However, it should be noted that when asked the same questions in 1995 and 1996, respondents' answers varied considerably. For example, the percentage of negative responses to the area of clinical independence varied from 88% in 1995, to 92% in 1996, and 86% in 1997. In fact, in most areas, there were significant decreases in negative perceptions between 1996 and 1997.

"Physicians' perceptions of the effect of managed care on medical practice are less negative in 1997, reversing a trend toward ever more negative perceptions over the preceding two-year period," the survey reported. However, survey officials did not identify a possible reason for the reversal.

Part of the reason for the cooling of hostilities can possibly be attributed to the actions of the managed care industry itself. Since 1996, the industry has launched a series of initiatives to calm concerns from both patients and provider groups. In one of these initiatives, the industry threw its support behind the prudent layperson standard.

The Washington, DC-based American Association of Health Plans (AAHP), the managed care industry's leading trade group, proposed that health plans cover "screening and stabilization as needed for conditions that reasonably appear to constitute an emergency based on the patient's presenting symptoms."

The gesture stopped short of a full endorsement. But it was a positive sign. Yet, providers weren't convinced. Among them was Bedard, who was president of ACEP at the time. He described the action "a step in the right direction," but one that doesn't guarantee patients coverage.

Both payers and providers are likely to continue achieving compromises on their way to health care reform, says Sklar. The public is clamoring for change, and at the moment managed care is an easy target for criticism. Perhaps, he says, emergency physicians see the uselessness of resorting to emotions and are opting instead to get things done through mutual cooperation.


1. Osborn HH. Health maintenance organizations: Managed care or mismanaged care? Ann Emerg Med 1996; 27:225-228.