Vol. 1. No. 2

The concept of medical management grew historically from the principle that health maintenance organizations (HMOs) would integrate the financing and delivery of health care services, with the intention of coordinating care through the efforts of primary care or personal physicians. This "coordinated care" approach was embodied in the concept of "health maintenance" in the 1970s and 1980s -- prevention, early intervention and coordination of care would result in better care and outcomes for the patient.

Cost control was an element of this process, but it was not designed to be the main product. As the competitive market and financial pressures began to overtake the managed care industry, particularly when shareholders' return on investment became the driving force in recognition of the public market opportunities for HMOs, care management became more synonymous with cost management. Managing care began to focus on provider contracting and financial risk shifting mechanisms, whose goals were to reduce the cost of delivering care or transfer the financial risks and incentives for providing care, with the clinical well-being of the patient being relegated to a distant third place. While some MCOs will bristle when confronted with the notion that their primary interest is in managing cost and not the health status of patients, consider the following evidence.

The Managed Care Backlash

"Managed care" has become a lightning rod for consumer dissatisfaction, stemming from the unhappiness of both the provider community (i.e., physicians and hospital executives) when facing impossible demands and threats from MCOs, and the public whose "freedom of choice" is curtailed. It is true that HMOs and other MCOs have been responsible for reducing the runaway spiral of health insurance premium, but most people are less interested in this achievement than worried that they will not get necessary and appropriate care when they are seriously ill. Lawsuits for denial of care and failure to authorize the use of out-of-network physicians, and complaints that providers bill patients because they haven't been paid by insurance companies are on the rampant increase.

The bureaucracy, paperwork and inability to get straight answers from MCOs have caused both physiciansand consumers great anxiety. Managed care executives, who have been ripe targets for abuse regarding their high salaries, particularly in publicly traded companies, feel unfairly put upon. But those same executives probably would rank along with used car salesmen, lawyers, and politicians when the public assesses their credibility and integrity. This is a sorry state of affairs. No amount of accreditation review, standard setting, or lofty pronouncements and research studies about how managed care companies are working to improve quality will change these perceptions.

Physician and Hospital Dissatisfaction

The failure of the 1994 Federal Health Care Reform effort can in large part be attributed to the fact that consumers perceived that the proposed reforms targeted physicians. Although physicians have had their own share of public relations problems with Medicare fraud, overcharging, up coding, high incomes, and lack of sensitivity to patients, consumers still believe that physicians and hospitals are most qualified to balance the competing forces of reducing cost and maintaining quality. The health care reformers' attack on physicians was a poor strategy in the face of increasing profits in the managed care sector, particularly in the case of for-profit publicly traded companies. Physicians are burdened with paperwork and authorizations for care, and practicing within financial formulas and guidelines in which they were never trained. At the same time, an MCO's product is its physician network, even though managed care contracts with providers typically are of only a year's duration. These MCOs rely to a great degree in their advertising on the very quality of physicians whose services are being "rented" for a short period of time, and who feel the need to distance themselves from the reputation of these entities in order to maintain their own clinical integrity.

It is not that managed care organizations are evil; in fact, the vast majority of their personnel try to do an honest job. But in the eyes of the public, the system looks very much broken when viewed from the simple perspective of providing care to those who need it in the most straightforward manner.

The "Myth" of Quality

For almost a decade, there has been significant impetus to monitor and improve the quality of health care delivered through the increasingly complex maze of our health care system. But it is evident that quality is only important when the price is acceptable.

Neither consumers, employers, nor government purchasers want to pay more for health care services than they have to; hence, price still takes center stage in purchasing decisions. While it is true that encounter data and outcomes measures are becoming more important factors in the rating of managed care plans, much of the measurement is still paper driven rather than measured at the level of customer satisfaction. The delay in getting an appointment is unacceptable, waiting times in physicians' offices are interminable, and answers to questions about claims can be lost in an endless maze of double speak and denial of responsibility. We may be measuring clinical quality with respect to the medical treatment and outcome, but not with respect to the patient's well-being or perception thereof.

Limited Medical Influence on Financial Decision Making

It is true that all MCOs have a medical director, although the range of responsibilities too often does not include financial authority and autonomy equal to that of the CFO or CEO. A medical director's role is unfortunately too often confined to relationship juggling with physician organizations and individual doctors, with responsibility for the improvement of care, quality and patient satisfaction divorced from financial decision making. From my twenty years experience in the MCO industry, I am sorry to say that most medical directors are not treated as senior members of the management team, and their views on the financial boundaries beyond which clinical decisions cannot be taken are not given much credence.

Disease Management

In the last several years, disease management -- focusing significant effort on the protocols and interventions for a specific and usually highcost disease such as congestive heart failure, diabetes, and asthma --has been trumpeted with great fanfare. Some advances have been made through this intensive effort, but the real issues of the patient's overall health, social, psychological, and support needs have for the most part been left untended. Disease management is what its name implies, focusing on the disease as an event isolated in time or longitudinally by specific body system, rather than addressing the needs of a patient from a dynamic, ever-changing holistic perspective. The increase in the demand for complementary medicine (acupuncture and other alternative treatments) also reflects many patients' continued search for something better to meet their own health care needs, something the current fragmented system is only beginning to address.

So What Is the Answer?

There isn't a simple one. Most physicians aren't Marcus Welbys or gods. There is significant waste, mismanagement, duplication, and unnecessary care provided by our system. But until we really look at medical management as a process involving the person's integrated social, community, economic, financial and medical needs, we really aren't getting any closer to solving the riddle of providing managed care effectively -- that is, providing and managing comprehensive care. We're just running ever faster and farther in pursuit of a problem we really don't under-stand and can't quite figure out how to solve.