Wednesday, February 11, 2009

Who Should Manage Your Care?

One of the goals many people have for federal and state healthcare reforms is to eliminate “medical underwriting” by health insurers, i.e., refusals to provide health insurance coverage for those with existing illnesses and conditions. How to do this — individual mandates, employer mandates, single payer, etc. — remains controversial, but the goal is widely shared.

If health plans can’t medically underwrite, how will they compete? Victor Fuchs, in a recent article in Health Affairs, says “If insurers have to provide a standard benefit package with guaranteed issue and no pre-existing disease exclusions, receive risk-adjusted premiums, and have their outcomes monitored, they will have a strong incentive to change their business model from excluding sick patients to actually managing care for efficiency and value.  This is how competition can work to control costs.”

In another corner of the health reform arena, there’s deep concern about the decline in primary care and a major push for supporting creation of the patient-centered medical home.  One of the core principles of the medical home is to provide comprehensive management and coordination of a patient’s care.

So which is it?  Do we want health plans to manage our care, or do we want primary care practices to do it?  The experience of the 1990s indicates pretty strongly that people don’t like health plans managing their care.  (Based on the same experience, it’s not even clear that people like primary care practices doing it either, but the PCP gatekeeper role then was being driven by the health plan, not the practice itself.)

Yet most health plans have created an extensive care management infrastructure inside their own walls and they are already competing for business based on how extensive it is.  Drive down the highway in any major city or turn on the TV to see the proliferation of advertisements by health plans.  The message (unfortunately) isn’t how much less they cost, but how much they can help you manage your health care.

So not surprisingly, one of the challenges in implementing medical home initiatives is that the improved  services in the medical home appear to duplicate services the health plan already claims to be delivering.  Why should the health plan pay primary care practices more so they can hire nurse care managers, when the health plan is already paying for them on the health plan’s own staff, and advertising that that’s a way they control costs?  Why should the health plan pay more for a physician practice to install IT systems, when the health plan already claims to provide extensive data and decision support to help physicians better manage their patients?

The problem with having these services at the health plan, rather than the physician practice, is that they cannot be effectively integrated into care delivery for patients.  Health plan care managers try to help patients manage their care independent of the physician, when care management and physician treatment should be closely coordinated.  Physicians need one effective IT system they can use for all of their patients, not a half dozen systems, each of which only works for the patients from a particular health plan.

In order to truly fix the healthcare system, there will need to be a resolution to what, if any, care management services should be provided by health plans instead of by health care providers.  The likely answer, at least in the long run, is “as little as possible.”  There will always be some patients who can’t find or won’t use a medical home, and in those cases, the health plan (assuming the patients have a health plan) may be the only practical way to provide a semblance of care coordination.  But if the goals of the medical home advocates are realized, there will be fewer and fewer such patients over time.

Moreover, resolving this also helps resolve one of the key barriers to implementing the medical home — maintaining budget neutrality.  Health plans are reluctant to pay more for medical home services because it may increase spending with no guarantees of offsetting reductions in other costs.  Yet an obvious place to achieve offsetting reductions is reducing the spending on similar services inside the health plans.  Moreover, in light of the results of several recent studies showing low effectiveness of disease management programs, such a shift may result in better outcomes and lower costs.



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