By now most Americans have heard the horror stories about health maintenance organizations (HMOs). The media has had a field day with the image of huge profit-hungry HMOs chewing up the little guy, denying coverage for needed care to save money, and setting up financial incentives for physicians to withhold or delay care. The media has also tracked the consolidation among HMOs and has played up the potential for an abuse of power.
The stories and statistics have prompted a variety of responses. In the short term, some of these responses may act in favor of specialists. Some managed care organizations (MCOs) have taken a close look at the way they handle authorization for specialty referrals and have found ways to streamline the process. According to recent data from Integrated Healthcare Report, some are now allowing automatic referrals for all but the costliest or most controversial services. MCOs, by addressing physician and patient concerns about timely access to appropriate care, have found they saved administrative costs by this process.
Specialty Care Access
HMOs around the country are also introducing “open access” plans. For example, PacifiCare of California announced that its enrollees will have faster access to specialists utilizing a program that allows primary care doctors to send patients directly to some specialists without authorization by a group’s utilization review committee. More than 4,600 primary care physicians at 35 medical groups in California have agreed to participate in the program.
The MCOs have also discovered that in many instances the specialist makes a far better gatekeeper, or “care-manager,” than the primary care physician. With this in mind, neurosurgeons should consider developing programs to be the care-managers for common problems, such as spine disorders, with the goal of enhancing their practice opportunities and increasing patient referrals.
State legislatures, meanwhile, passed over 400 separate bills in 1996 alone to address public concerns about quality of care and inappropriate use of financial incentives to delay or deny care. However, nothing out there seems to be retarding the premium competition and the squeeze on provider reimbursement. If giving consumers direct access to specialists increases costs, employers or employees will need to pay more for the privilege. While some of the developments to loosen up access may be comforting to some, it’s not realistic to expect a sudden deluge of referrals. HMOs will still need to be competitive on premiums and providers will need to be competitive on costs.
Getting Organized
Neurosurgeons, to enhance their market share in this era, need to get organized. Consideration should be given to the development of single specialty networks, which will enable the planning and implementation of risk programs for neurosurgical care. These organizations should be able to provide risk assessment, demand management, disease management, treatment protocols, outcomes measurement, and both cost and clinical results reporting. The smart neurosurgeon who puts one of these programs together and sells it to the managed care community will be a sure winner. The alternative is for neurosurgeons to wait patiently under the table for table scraps.
Some specialists are attempting to create a niche for themselves by forming single specialty Independent Practice Associations (IPAs) in order to attract subcapitation agreements. Some think that dollars will flow to single specialty IPAs in the future. Others have stated that specialty services are likely to be carved out and capitated only if the services are unique, rare, and organized in a concentrated fashion.
In the last several years, the primary care Management Service Organization (MSO) has become the integration model of choice. There are now indications that it can become an effective model for specialists as well. MSOs provide contract management and/or practice management services to physician organizations. Physicians, who can obtain the necessary capital, can form MSOs. Some MSOs purchase the equipment and supplies of medical practices and employ office staff and physicians. Others contract to offer services. In many cases, a combination of both approaches is used. There are emerging specialty practice management organizations in oncology, neonatology, and cardiology which appear to have significant potential for success.
The question that one might ask is, are specialty groups the answer? They’re vastly superior to private solo practice in their ability to deal with managed care. Ultimately their success will depend on how well they relate to managed care organizations. They will, over the long term, need to develop disease management programs with information systems support, consolidate their administrative costs and streamline clinical practice costs. They will only survive if they offer the best solution to the medical cost, quality, and access equation.
As it turns out, the more aggressive specialists are not only surviving, but winning in a variety of ways under various risk-sharing arrangements. As Medicare and Medicaid shift to managed care, it will become even more important for neurosurgeons to become proactive in this arena.