ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Sunday, February 4, 1996 TAG: 9602060008
SECTION: EDITORIAL PAGE: F-3 EDITION: METRO
SOURCE: JAMES F. HOLMAN, M.D
THE U.S. HEALTH-CARE system may eventually validate Winston Churchill when he said that Americans will always do what is right but only after they have exhausted all other options. At the moment, though, mired in a health-care funk, most Americans fear the impending demise of a national treasure.
As a physician who has become a student of our system, I think we are actually witnessing something promising. It's currently traveling as a sheep in wolf's clothing. My optimism lies in the promise of managed care.
Whoa, managed care our salvation? That's absolute heresy for a physician. Here are four underappreciated points about progressive managed care that support my case:
* Managed care offers the best known method for limiting and allocating health-care resources.
Americans are just beginning to grasp that we cannot afford everything modern medicine has to offer. There are limits to what we can, will and should spend. Health providers can run through a budget quicker than you can spell MRI - a problem that will become more acute as technology marches on and our population ages. Un-managed care is simply not an option. The unavoidable-under-any-system challenge is how to limit dollars spent and how to spend them wisely.
Health-spending decisions are confounded because the money comes from shared funds. Few of us can afford the financial risk of a serious illness, so health dollars are pooled into some type of insurance fund, either private or public (example: Medicare). Everyone dips into the pool for some funds. People stricken by major illnesses dip deeply. With rare exceptions, though, we all tap a shared pool.
That's a problem in our traditional, fee-for-service model, where spending decisions are driven by individuals seeking health care. Physicians are trained to do what is felt to be in each patient's best interest; we are not trained to monitor collective or population needs. It's tough to limit expenditures in that setting, particularly after service is rendered.
Managed care, on the other hand, is prepaid, budgeted up front. Providers are responsible for each person enrolled but also collectively responsible for all enrollees. Population responsibility is imperative in managed care, where prepayment rewards providers for keeping folks healthy rather than treating illness.
* Decision-making authority is being returned to physicians and other care-givers who are actually delivering the care.
After more than a decade of riding hard on doctors, progressive managed-care organizations are now returning the reins.
Because fee-for-service medicine has no built-in mechanism for limiting expenditures, insurers accept the risk and responsibility for assuring there is enough in the pool to meet health needs of all enrollees, to cover administrative expenses and to leave a profit. Policy decisions - like which treatments are appropriate and how long a patient can stay in the hospital - are often relegated to a nurse at the home office in, say, Omaha, hundreds of miles from the patient's bedside.
In a critical turn in the managed-care journey, physicians - who control 80 percent of the spending decisions - are now being handed that responsibility, and risk, through capitation. There are variations on capitation, but here's a generic version: A health plan agrees to provide services to enrollees for a fixed amount per member per month. The plan then divides premium dollars among providers - notably, primary-care doctors, specialists and hospitals - in a per-member-per-month sum. It is up to each of these providers, not the nurse in Omaha, to provide necessary services for the budgeted amount.
The reflex rap on capitation is that physicians are paid to do less, whereas the fee-for-service model rewards us to do more. There is no substantive evidence that capitation compromises quality of care. There is substantive evidence that doctors, like most other humans, respond to financial incentives. If doctors were ethical under the old incentives, they will likely be ethical under the new incentives.
As another quality safeguard, purchasers are now demanding public accountability and report cards. In competitive managed-care markets, as price differences fade, quality and patient satisfaction drive consumer choices.
* Patient choice can be preserved in managed-care plans.
Conventional wisdom has previously held that patients relinquish physician choice as a trade-off for lower prices of an HMO. However, recent research by The Advisory Board Co., a Washington research tank, reveals that choice is becoming a key selling feature of health plans. Plans with broad physician choice are faring better in the marketplace. Even Kaiser, an industry benchmark, is now being forced to expand physician choice.
And in a development I find truly heartening for patients and doctors, broad physician panels in capitated plans are delivering care as efficiently as narrow panels. Consequently, patients can have their savings and their doctors.
* Managed care is restoring the balance of power to people whose health and dollars are truly at risk.
The power of the purchaser is late-breaking news from the managed-care front. Purchasing coalitions nationwide are becoming major players, negotiating deep discounts and broad choices for their members. In 1995, the California Public Employees Retirement System, with almost 1 million members, negotiated premium cuts 10 percent below the rate of medical inflation. Researchers at Smith Barney predict that purchasing coalitions will cover 30 percent of the population by the year 2000.
Managed care won't cure all our ills. It has a few of its own. Hard-nosed purchasing cooperatives won't tolerate the huge profits racked up by many HMOs. Nothing about managed care will make services magically available to 40 million Americans left out of our system.
But managed care can make health care generally more affordable and may prove to be the best method for providing care to the health-disenfranchised, once we Americans finally decide that we must guarantee some basic level of care for all citizens.
The virtues described here are emerging from new-and-improved versions of managed care, evolving in markets far into the journey. Clearly we will see bumps along this health highway. But keep your eye on this uniquely American solution. Churchill may prove prophetic after all.
James F. Holman, M.D., is senior vice president of medical affairs at Carilion Health System in Roanoke.
LENGTH: Long : 112 lines ILLUSTRATION: GRAPHIC: GARY VISKUPIC/Newsdayby CNB