Good day, I would love to get assistance with my assignment.

HSA 312 XT81/H01/01

MANAGED HEALTH CARE

SPRING 2020 L. EITEL

OVERVIEW 2: FEBRUARY 25, 27, AND MARCH 2

TH MANAGED CARE IN THE 1990s: KEY POINTS

1. The New Managed Care Plans: how they worked:

By the 1990s, Managed Care health insurance plans existed in three principal forms: HMOs (health maintenance organizations), POS (point of service plans), and PPOs (preferred provider organizations).

1. HMOs and to a certain extent POS plans were the most restrictive forms of Managed Care health plan, and PPOs were the least restrictive.

1. The restrictive aspects of Managed Care in these newly minted, large Blue Cross/Blue Shield and commercial Managed Health plans (as well as in the plans administered by the newer regional managed care organizations) were the following:

1. The insurers created and implemented limited networks of individual, group, and institutional health care service providers.

1. They implemented extensive case management, disease management, and inpatient and outpatient utilization review programs.

1. Using significant market share and the threat of limiting provider network size and composition, the insurers negotiated low provider payment rates with individual, group, and institutional providers. This was one of the main reasons that yearly National Health Expenditure and health insurance premium increases significantly slowed and decreased in the mid-1990s. It was also one of the reasons that the late 1990s and early 2000’s saw the rapid development of large integrated provider health care delivery systems. (As a protective reaction to the way in which managed health insurance plans had exploited their size and market advantage.)

1. These insurers implemented their own mass-produced and simplified version of the complex, subtle, and consensual patient/Primary Care Provider relationship that had been developed by the PHSPs, and especially by Kaiser Permanente. As part of the massive shift to Managed Care in the 1990s, Managed Health Plans instituted the role of Primary Care Provider or Primary Care Provider Team as “gatekeeper.”

• PCPs/PCP teams were given the responsibility for regulating the flow of inpatient admissions, limiting the use of Specialty Care Practitioners, and limiting the utilization of unnecessary diagnostic tests and expensive medical procedures.

• In some Managed Health Insurance Plans, PCPs were actually expected to bear financial risk for the level of use, not only of primary care services, but also of hospital, testing, and specialty care services.

• For certain selected procedures and tests PCPs and Specialty Care Practitioners were required to get approval from centralized health plan medical and other utilization review staff.

• PCP responsibility for the prudent use of health care goods and services was reinforced by the extensive use of Capitation (fixed per-patient payments) to pay PCPs and PCP teams. (However, Capitation rates were based on estimated averages of per person utilization of health care services: PCPs who had an especially unhealthy mix of patients were underpaid for their services.) Even in the best of circumstances PCPs and PCP teams were paid relatively low Capitation rates.

• The original idea of Managed Care was that PCPs and PCP teams were especially important for providing optimal Continuous, Comprehensive, Coordinated Care to individuals and their families: it was assumed that PCPs would have a relatively stable panel of patients. They would be able to get to know those patients and their families over time, would develop a personal relationship with them, and would have a deep understanding of all their acute, preventive, and other health care service needs (including, as they aged, palliative care and hospice care). However, the sheer volume of patients assigned to individual PCPs and PCP teams by the various Managed Care Plans, and the constant changes in the composition of those panels, made that critical personal connection infeasible.

1. POSITIVE IMPACTS OF MANAGED HEALTH INSURANCE PLANS IN THE 1990s:

Managed Care health insurance plans had a number of positive impacts:

1. They significantly slowed the growth of National Health Expenditures for the first time in almost 15 years.

1. They significantly reduced cost sharing for insurance plan enrollees. In the 1990s the majority of those covered by Managed Care plans were covered by HMOs and POS plans. The philosophy of those plans, especially HMOs, was that the enrollee’s premium was all the enrollee should pay. It would be up to the insurance plans and networks of providers to work to make high quality affordable health care available to most people. The focus on enrollee cost-sharing which would characterize Consumer Directed Health Plans in the early 2000’s was the exact opposite of the philosophy of the major health insurance plans that covered most people in the 1990s.

1. It is very likely that the mass implementation of Managed Health Insurance plans in the 1990s had a significant impact on the unnecessary utilization of health care goods and services in the U.S. However, at this point this is speculative – largely because the most recent estimates of unnecessary health care utilization in the U.S. have been done several years after the years when HMOs and POS plans dominated the health insurance marketplace. Clearly the reduction in annual increases in National Health Expenditures in the mid-1990s was not simply from constrained payments to providers, nor from the denial of needed care.

1. They emphasized the use of Preventive Health Care Services and of exercise and Wellness programs, which had never been an emphasis of Indemnity and Service plans when they were the predominant form of private employer-based health insurance in the United States.

4