The future of managed care: Integration of financing, risk management, and delivery

Connecticut Medicine

Volumn 63, Issue 10, 1999, Pages 603-610

  Kelly, Kevin W ^b   Phelan, John J ^a  

^a U S DEPARTMENT OF HEALTH AND HUMAN SERVICES   (United States)

^b NONE

Author keywords

[No Author keywords available]

Indexed keywords

ECONOMICS; FORECASTING; HEALTH INSURANCE; HUMAN; INTEGRATED HEALTH CARE SYSTEM; REVIEW; RISK MANAGEMENT; UNITED STATES;

DELIVERY OF HEALTH CARE, INTEGRATED; FORECASTING; HUMANS; INSURANCE, HEALTH; MANAGED CARE PROGRAMS; RISK MANAGEMENT; UNITED STATES;

EID: 0033203316     PISSN: 00106178     EISSN: None     Source Type: Journal    
DOI: None     Document Type: Article

References (35)

1. For our purposes, "risk" Is defined as the potential for health-care expenditures to exceed the amount predicted, budgeted, or otherwise available.
2. Feldstein PJ: Health Care Economics, 4th Edition, Albany, New York: Delmar Publishers; 1993; Table 9-4, pp. 180. For example, in 1969, 78% of physicians in the United States were employed in practices with less than three physicians. While more physicians migrated to larger group practices by 1988, 55% were still employed in practices with only one or two physicians.
3. Sloan FA: Physicians and Blue Shield: A Study of the Effects of Physician Control on Blue Shield Reimbursements, in Conference Proceedings, Issues in Physician Reimbursement, Washington, DC: Health Care Financing Administration, Department of Health and Human Services; 1980. In fact many economists believe, depending on the type of insurance plan involved, that the incentive structure permitted higher rates of reimbursement for physicians, For example, Sloan found that in physician-controlled Blue Shield plans, reimbursement levels and the number of services provided were greater than in those plans not controlled by physicians.
4. Arnould RJ, DeBrock L: The effects of provider control of Blue Shield plans on health care markets. Economic Inquiry 1985; 23:449-74. In another study by Arnould and DeBrock, it was found that in physician-controlled plans with cost advantages such as tax subsidies, the benefits went to the physicians in the form of higher fees.
5. Edwards W, Fisher C: Physician charges and utilization trends. Health Care Financing Review 1989; 11:117-23. In 1985 Congress limited balance billing for nonparticipating physicians in the Medicare program to 115% of Medicare approved fees. Balance billing amounted to approximately $3 billion out of a total of $30 billion for physician service costs to Medicare in 1989.
6. Newcomer L: Physician, measure thyself. Health Affairs 1998; 17:32-5. A recent study of physician practice behavior in a large fee-for-service plan covering approximately 600,000 patients revealed that a large number of physicians are not providing quality care based on expected practice behavior.
7. Gunnar R, Dixon D, Bourdillon P, et al: CC/AHA task force report: Guidelines for the early management of patients with acute myocardial infarction, J Am Coll Cardiol 1990:249-92. In one study by Gunnar et al, of 150 cardiologists in a fee-for-service plan, only 48% of patients who should have been prescribed beta-blocker drugs in order to reduce the probability of a second heart attack where receiving them.
8. Frech III, HE: Blue Cross, Blue Shield, and Health Care Costs: A Review of the Economic Evidence; National Insurance: What Now, What Later, What Never?, 1990: Washington, D.C.; American Enterprise Institute, 1980:251-2. Prior to the 1980s, Blue Cross-Blue Shield (BCBS), organized as nonprofit insurance companies and controlled by administrators of the community hospitals, dominated the hospital insurance industry in most parts of the country. With tax advantages and discounts from hospitals, the "Blues" were able to offer comprehensive health plans which essentially reimbursed hospitals on a "cost or charges" basis.
9. Feldstein PJ: Health Care Economics, 4th Ed. Albany, New York, Delmar Publishers, 1993.
10. Eastaugh SR: Medical Economics and Health Finance. Dover, Mass: Auburn House; 1991.
11. Cunningham FC, Williamson JW: How does the quality of health care in HMOs compare to that in other settings? Group Health J Winter 1980; 13:219-31.
12. Roemer M, Schonick W: HMO performance: The recent evidence, Milbank Memorial Fund Quarterly 1973:51. There is some evidence based on the RAND experiment that patients in HMO's received higher quality health care than those in the traditional fee-for-service plans during this period.
13. Goldberg LG, Greenberg W: The Emergence of Physician-Sponsored Health Insurance; A Historical Perspective in Competition in the Health Care Sector. Germantown, Maryland: Aspen Systems Corporation; 1978.
14. Jensen G, Morrisey MA, Gaffney S, Liston DK: The new dominence of managed care: Insurance trends in the 1990s, Health Affairs Jan-Feb, 1997:125-36.
15. Pauly M: Competition in health insurance markets. Law Contemporary Problems 1989; 51:256.
16. Levit KR, Lazenby HC, Sivarajan L: Health care spending in 1994: Slowest in decades. Health Affairs Summer 1996; 15:130-44.
17. Wholey D, Feldman R, Christianson J, et al: The effects of market structure on HMO premiums. J Health Economics 1995; 14:81-105.
18. Baker LC: The effect of HMOs on fee-for-service health care expenditures: Evidence from Medicare. J Health Economics 1997; 16:453-81.
19. Johnson J, Casalino L: Vertical integration and organizational networks in health care. Health Affairs Spring 1996; 15:7-12.
20. Jensen G, Morrisey MA, Gaffney S: The new dominance of managed care: Insurance trends in the 1990s. Health Affairs 1997:125-36.
21. Sullivan CB, Miller M, Feldman R, Dowd B: Employer-sponsored health insurance in 1991. Health Affairs Winter 1992:172-85.
22. Mueller MT: C - Access to Care in HMOs and Traditional Insurance Plans. Health Affairs Winter 1996; 15:81-7.
23. Simon CJ, Born PH: Physicians' earnings in a changing managed care environment. Health Affairs Fall 1996: 124-33.
24. Emmons D, Simon C: Managed care participation, revenues, and risk. Socioeconomic Characteristics Med Practice 1995:3-10.
25. Emmons D, Simon C: Managed care: Evolving contracting patterns. Socioeconomic Characteristics Med Practice 1996; Gonzalez M: ed: Chicago, Ill: American Medical Association; 1996:15-25.
26. Robinson JC, Casalino CP: The growth of medical groups paid through capitation in California. N Eng J Med 1995; 333; 25:1684-7.
27. Rodwin MA: Medicine, Money, and Morals: Physicians' Conflicts of Interest. New York, New York: Oxford University Press; 1993.
28. Enthoven A, Singer: The managed care backlash and the task force in California, Health Affairs July-August 1998:95-110.
29. Wall Street Journal September 1, 1998, pp B3.
30. Robinson JC; Financial capital and intellectual capital in physician practice management. Health Affairs 1998; 17:53-74.
31. Marsh LC: The doctor's bottom line. Health Affairs 1998; 17:75-79.
32. Michaud GC, McGown JL, Vander Jagt RH, Dugan AK: Ottowa General Hospital. University of Ottowa, Ontario, Canada: Bull Medical Library Association; 1996; 84:478-81 Article No. UI97070623.
33. Ginzberg E, Ostow M: Managed care - A look back and a look ahead. N Eng J Med 1997; 14:1018-20.
34. It is interesting to note that one of the "fathers " of managed care, Professor Alain C. Enthoven, implied that Wave II may survive if physicians contract with one health plan in order to improve the quality of care to patients and their relations with HMOs but he still believes there is a role for HMOs in managing risk: "On the other hand, health plans will have to delegate more and more responsibility to medical groups, while they focus on marketing, enrollment, risk management reinsurance, out-of-area claims payments, and other administrative functions." (See Enthoven and Singer, 28).
35. HCFA plans to introduce a risk adjustment factor for the Medicare program soon which should assist physician/providers in the transition from Wave II to Wave III.