Consumer Bill of Rights could force some major changes for MCOs
Consumer Bill of Rights could force some major changes for MCOs
Experts predict more changes on managed care front
Whether you call it "Hillary Lite" or believe it’s a necessary response to problems created by managed care, President Clinton’s Consumer Bill of Rights and Responsibilities likely will lead to more managed care regulations.The president’s 30-member Advisory Commission on Consumer Protection and Quality in the Health Care Industry will present its final report in March. (See story on draft of Consumer Bill of Rights, p. 15.)
Experts say some of the report’s recommendations could be presented in legislation, including the following:
requiring coverage for emergency services;
giving consumers the right to more information about physicians, payers, and health care providers;
providing consumers with an adequate choice of health care providers;
reinforcing patient confidentiality and increasing consumer participation in medical decisions;
providing consumers with a fair complaints-and-appeals process.
Are legislative mandates really necessary to achieve these kinds of common-sense goals relating to health care? Yes, says a member of the advisory commission, who happens to also represent one of the country’s largest HMOs.
"A voluntary way of getting compliance would be very much the ideal," says advisory committee member Phil Nudelman, chairman and president of Kaiser Group Health in Seattle. "But I’m not sure this can be done on a voluntary basis in total," he adds. "Some types of legislation may be necessary, and there is fair agreement that a minimum amount of legislation would be the way to go."
Donald Berwick, MD, president of the Institute for Healthcare Improvement in Boston and a member of the president’s advisory commission, also sees the potential for legislation to follow the commission’s final report. Once the bill of rights is done, it goes to the subcommittee to make [suggestions for] private and public actions, he explains.
Other experts agree that legislation is likely.
"The Republicans are saying, No.’ But don’t underestimate President Clinton’s ability to turn an issue against the Republicans," says Uwe Reinhardt, PhD, a Princeton (NJ) University health economist.
"Clinton never lost track of his blueprint, and the blueprint was that the average American needed to be protected from these powerful mega-trusts of insurance companies and providers," Reinhardt says.
The current push for legislation follows an enormous growth in the managed care industry during the 1990s. Despite reports of some abuses in the MCO industry, the basic philosophy of lowering health care costs will continue, some experts say.
"There’s no doubt in my mind that you can lower costs and still increase and improve quality," Nudelman says. "We should be focusing not just on cutting back utilization, but also reducing errors and improving the things we’re doing now. And if we do that, costs will stay level or go down."
A draft copy of the Consumer Bill of Rights, released in the fall, stated that between 1994 and 1996, employers’ annual cost of health care coverage declined from $3,385 per employee to $3,185. Managed care was a major contributor to that trend. The draft also showed that in 1996, the average annual cost of HMO coverage for a family was $5,070.96, about 6% less than the average cost for indemnity coverage.
As impressive as these numbers are, some say they are a smoke screen. Health care savings that occurred between 1992 and 1996 came in the wake of a recession and middle class job restructuring, Reinhardt states.
"Many middle management employees felt at risk — not that many were fired, but they felt at risk," he explains. "So businesses could make employees put up with less choice, and people joined HMOs."
But the trend is reversing, and health care costs may continue to rise before any significant savings are realized, Reinhardt says. The rapid growth of MCOs has increased competition between HMOs for market share. The competition mainly has surfaced in the two following areas, Reinhardt says:
r premium costs;
r providing a broad provider network and giving consumers an option of direct access to specialists.
Direct choice that permits consumers to go directly to a specialist will work only if the MCO has control over the specialist component, says Maryanne Ricardo, MBA, president of The Ricardo Group Inc. in Manhattan Beach, CA. The company consults with physician organizations about their business operations. Otherwise, "you’ll end up right back to a fee-for-service system," she says.
That’s what has happened in recent years, and managed care companies are responding by raising their rates, Reinhardt says. Already, HMO premiums are increasing by 10% in some Northeastern states. In addition, 1996 was one of the most profitable years for hospitals in 50 years, he states.
"Right now the economy is good, and people can absorb these premium increases. But I think the industry will realize that this wasn’t good enough," Reinhardt adds. "There has been a lot of hype, but there’s not nearly as much cost cutting as you may think. For every doctor whose fees got cut, there are two whose fees did not."
Consumers seeing more restrictions on care
Still, consumers are feeling the crunch, the experts contend. They have experienced more restrictions in their health care coverage since managed care took over, and some 41 million people still have no health insurance coverage. The result: a ripe environment for legislative mandates.Some of the more likely bills to come out of the advisory commission’s recommendations include one that will require MCOs to provide consumers with background on their physicians and information on whether their physicians have a financial incentive to withhold care, Reinhardt says.
This type of disclosure law would force doctors to reconsider using income redistribution models such as capitation. "Part of the problem is that everybody is trying to figure out the system, and there are some abuses," she says. "But physicians are realizing more and more that it serves them no long-term benefit if they refuse to see or treat patients because they will have a more expensive procedure in the long run."
While it’s unlikely the trend will reverse itself and managed care physicians will return to fee-for-service models, the marketplace could see some shifts to other types of reimbursement models, Ricardo suggests.
For example, there could be continuing growth in the number of physicians being paid a fixed salary. And the salary could be supplemented with a bonus structure based on customer satisfaction, retainment of patient base, or quality improvement, Ricardo says.
Another possibility is that primary care physicians will shift back to a fee-for-service model, while the specialists’ practices become more capitated and involved in utilization management. "If a patient calls an orthopedic surgeon to treat a sprained ankle, then the surgeon will educate the patient on how to use his or her primary care physician, and the primary care physician will be happy to see that patient," Ricardo explains.
Without some capitation, the specialists have no motivation to refer patients back to primary care physicians, she adds. "A good amount of a specialist’s time is actually spent on primary care."
Although some managed care organizations may object to a law that would require them to provide reams of information to any consumer who asks, at least one main argument against it no longer holds water. The cost of making paper copies is a moot point now that computer cyberspace has made it easy and inexpensive to distribute data, experts say.
"I can imagine there will be a law passed saying every HMO has to have a Web site with certain information on it, including a doctor’s curriculum vitae," Reinhardt says, adding that Massachusetts already has such a requirement.
In that state, a citizen can go on-line and access complete details about any state-licensed physician, including his or her disciplinary proceedings and malpractice cases, he adds.
Legislation covering emergency department coverage may also result from the Consumer Bill of Rights, experts say.
Such legislation would provide equity for consumers, Nudelman says. "It’s the prudent layperson concept. In the eyes of the prudent consumer or patient or layperson, if they think it’s an emergency then it should be covered."
One proposal from the Consumer Bill of Rights may not get far off the ground because it could be too expensive for the managed care industry, the experts say.
That suggestion involves opening up the appeals process so that consumers could more readily appeal an HMO’s decision to withhold payment for a specific medical procedure.
"I think that [proposal] will be debated because it could get cumbersome and expensive if every [single consumer] could appeal everything that gets done," Reinhardt says.
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