THE CONCEPT OF MANAGED CARE AND ITS PRACTICAL IMPLICATIONS
6. MANAGED CARE AS UNKNOWN TERRITORY
THE CONCEPT OF MANAGED CARE AND ITS PRACTICAL IMPLICATIONS 45 group, America’s Health Insurance Plans (AHIP, formed by a merger in 2003 of the American Association of Health Plans and the Health Insurance Association of America) is that such escalating costs are caused not by problems inherent in managed care itself but instead by state and federal lawmakers who mandate benefits such as longer hospital stays after specific surgical procedures. In a 2004 policy statement on coverage mandates, AHIP focused on directing
The attention of state legislators and regulators to the growing administrative costs and burdens associated with duplicative federal and state regulation, inconsistent practices across states and the growing reluctance of regulators to evaluate the implications of the current system on consumers. (America’s Health Insurance Plans 2004)
In a similar vein, the absence of reliable scientific data has long been one of the major problems in medicine. Antes et al. (1999) showed that, for a variety of reasons, a meager 15 percent to 40 percent (or even less) of all medical decisions are based on knowledge derived from rigorous research studies. Commonly, a lag of 8 to 10 years exists between the time that scientific knowledge has been obtained and the time it gets introduced into routine medical practice. Current medical concepts are also becoming obsolete at a faster pace than ever before. Medical knowledge is quickly becoming out of date, with a half-life of 5 to 45 years, depending on the medical specialty (Antes et al. 1999).
To complicate matters even further, the quality of clinical studies oftentimes appears to be lower than might be expected. Other factors that interfere with obtaining reliable scientific data in medicine include papers that fail to report study limitations or the fact that the study was industry sponsored. In addition, some studies may even exaggerate the clinical relevance of their findings. Pharmaceutical companies that fund research sometimes unduly influence how researchers report study results, and they may even suppress unfavorable findings. It has been shown that reports on new treatments published in medical journals often have used only the most favorable statistics to report the study results. A review by Nuovo et al.
(2002) of 359 studies published in JAMA between 1989 and 1998 showed that only 26 studies reported straightforward statistics that clearly assessed the treatment effect on patients. Thus, the findings presented in medical journals may not always be entirely factual or as certain or clear-cut as they appear to be.
Using data to support improvements to medical care contributes to good clinical care. But not all data are the same. In managed care, “data driven” refers to the relevance and significance of all sorts of data in every aspect of day-to-day operation. The question is more a matter of when is it appropriate to use which category of data. Should utilization data rather than medical best practice data be used in making decisions about access to clinical care? In other words, the purpose and the role of data in managed care can be challenged. Is it possible to distribute health care in a morally justifiable manner using a method of distribution based predominantly on preestablished quantitative measures and, if so, are the current practices in managed care synchronized with the theoretical assumptions that make the process morally justifiable?
6.2 Utilization Versus Best Practice Data
At a basic operational level, data are used for the purpose of risk assessment and for the determination of the cost-efficiency of medical services. Risk assessment relates to the fact that the concept of managed care often presupposes a process of risk shifting from insurer to provider. This shifting of risk is considered imperative for achieving the goal of cost reduction (i.e., that the risk, which means the degree of utilization of services by the insured, is at least in part shifted to the provider). On the basis of this premise, the gatekeeping function of the primary care physician has been well defined. To facilitate this function, MCOs have instituted a variety of incentive and disincentive programs.
THE CONCEPT OF MANAGED CARE AND ITS PRACTICAL IMPLICATIONS
Data also influence the negotiation of premiums for prospective plan buyers.
When insurers are in the process of contracting to cover a certain population, the availability of prospective utilization information for specific populations is of critical importance. A population, such as the employees of a large corporation, consists of many individuals and some or all of their family members. The demographics of the group as a whole play an important role in determining the annual premium that will be charged to the employer. At the same time, the premium proposal must be competitive because, in turn, it will have an impact on the level of risk shifting with the providers. This complex process takes place in a competitive, free-market environment in which corporate profit margins are largely determined by the organization’s success in maintaining or reducing the medical loss ratio.
MCOs use a variety of specific data banks. For outpatient contract purposes, they frequently rely on the utilization and management (actuarial) guidelines of Milliman and Robertson, the ninth edition of which was published in 2005 (Milliman Care Guidelines 2005). These guidelines project the resource consumption for specific populations. They predict the consumption of resources in two differentiated systems. One is the highly managed system, characterized by a prospective review of utilization patterns (i.e., referral by referral), and the other is the moderately managed system that has a less aggressive review of utilization patterns. By using these data and superimposing on them the actual demographics and preferences of the target population, MCOs can first perform a statistical assessment of the risk and then calculate premiums. A similar mechanism is available to calculate the risk for inpatient services. Medical data banks contain statistical information on hospitalization and on the average length of stay, categorized by diagnoses. Some data banks include clinical pathways and protocols for the most commonly treated diagnoses within the hospital setting.
6.3 What Ought To Be Versus What Is
Because a comprehensive best practice data set is largely unavailable, utilization databoth in regard to the MCO’s cost-efficiency and in terms of the quality of the medical care providedfunction as the common denominator to determine the appropriateness of medical services in managed care. Applying this category of data to this particular end point has the inherent potential to clash with the “quality of care” concept as it is generally understood. Normative conclusions cannot be derived from data describing actual practice patterns. Descriptive data are not neutral and not value free. Actual practice patterns can be influenced.
For instance, MCOs worked successfully to reduce hospital stays, both overall and for specific procedures. To postulate then, without submitting further medical evidence, that the reduced number of hospital days indeed represents the normal standard is scientifically and ethically questionable at best. It contributes to the already strong perception that the best interests of the patient are sometimes sacrificed for a more favorable medical loss ratio. In other words, patients often believe that the quality of their care is compromised by the organization’s need to 47
optimize expense management and increase profitability. To illustrate this point, the federal government had to intervene in a conflict about length of stay on maternity wards and ultimately mandated that MCOs extend a one-day stay in the hospital to two days.
7. METHODOLOGICAL CONCERNS ABOUT DATA COLLECTION