Managed care: News briefs

Big health plans opt out of Medicare risk

Some of the largest health plans in the United States recently opted out of the Medicare risk market in certain cities, citing unprofitable operations as the reason, according to Arthur Andersen’s health care consulting group in Atlanta. This exodus forces seniors to find an alternative to their Medicare health maintenance organizations by Jan. 1, 1999. At least one consultant says health plans still can turn a profit with Medicare risk using a 10-step plan that includes geriatric care management.

Charles A. Peck, MD, a consultant with Arthur Andersen’s health care consulting group, says the secret to operating a Medicare risk plan successfully is a program he calls "Ten Steps for Medicare Risk Viability." Following are the steps:

1. Risk assessment methodology. Because 20% of the Medicare population generates 80% of the medical costs, it is vital to identify those at risk.

2. Geriatric care managers and a geriatric assessment team. Seniors require special services and increased attention as they age. Careful assessment and care management help prevent or minimize functional status decline.

3. Disease management programs. Providers benefit from managing diagnoses common to the elderly, such as congestive heart failure and diabetes.

4. Risk sharing. Financial incentives across all providers of care is a prerequisite for any risk program.

5. Strong physician leadership. Physician leaders must be capable of making tough decisions about performance and accountability.

6. Strong hospital leadership. Appointing a physician as chief operating officer of hospitals in the plan helps assist administration build stronger physician relationships.

7. Development of physician- and manager-friendly reporting tools. Real-time information transfer to people running the business must be flexible, accessible, readily available, and relevant.

8. Willingness of physicians to hold themselves accountable for outcomes and cost. Mutually agreed upon practice benchmarks must be followed by all clinicians.

9. Willingness to change. Networks implementing a risk program should seriously consider change-management skills building with all key employees.

10. Development of a clearly communicated vision and mission.

"Many believe that medical costs are the problem, but management of these costs is the issue. The real root of these losses lies with medical management processes and the need for investment in the systems of care necessary to support these patients," says Peck.