MCOs, academic centers declare truce

MCOs make imprint during docs’ formative years

Managed care organizations (MCOs) and academic centers are joining forces in the hopes of creating a new generation of doctors who are well-versed in the precepts of managed care as well as good medicine. The companies hope to instill managed care precepts before doctors develop negative attitudes toward the system. In addition, data on the quality of care provided by academic hospitals have convinced MCOs to seek contracts with them.

MCOs realize that teaching hospitals hold the key to the future of health care — doctors in training. Eight MCOs recently joined with local academic centers to form "Partnerships for Quality Education," the goal of which is to mend the historically unfriendly relationship between MCOs and teaching hospitals. The entities make for incompatible bedfellows, and the partnership’s goal is to help resident physicians perform in the managed care setting by creating new educational rotations that expose students to managed care theories.

The partnerships include Empire Blue Cross Blue Shield, Kaiser Permanente, Harvard Pilgrim Health Care, Regence Blue Cross Blue Shield of Oregon, Tufts Health Plan, Henry Ford Health Plan, Independence Blue Cross, and Lovelace Health System. They are projected to save MCOs the $30,000 they spend on average to train physicians. Until now, fewer than 20% of primary care residency centers have had partnerships with MCOs.

The American Association of Health Plans, the HMO industry’s lobbying arm, has stated that MCOs send more patients to teaching hospitals than fee-for-service insurers do. Capitated plans send 27% of their patients, while fee-for-service insurers send 22%. In addition, states the association, HMOs typically pay academic hospitals about 12% more than they pay nonteaching hospitals.

With the growing dominance of managed care, the entities are coming to realize that they need one another to survive. MCOs can guarantee a large volume of patients to teaching hospitals, and an affiliation with an academic center confers on an MCO a marker of quality, bringing in more enrollees. In addition, if standards are based on mortality and length of stay, recent research shows that teaching hospitals may be a better value. (See news brief on this study at Case Western Reserve University School of Medicine in Hospital Peer Review, November 1997, p. 170.)

The rocky relationship between the two has been based on the fact that academic health centers traditionally viewed MCOs as focused on marketplace efficiencies without regard to quality. At the same time, MCOs viewed teaching hospitals as wasteful, dependent on costly research, and operating without regard to the bottom line. As a result, MCOs directed patients to lower-cost community hospitals, leaving teaching hospitals with only the sickest patients.