MANAGED CARE: Pressures May Threaten Access, Research

      "The more managed care and hospital competition in an area, the less free care doctors provide to the uninsured and the less likely teaching hospitals are to pay for research," according to two studies released today. The Boston Globe reports that the studies "raise questions about who will pay for such 'public goods' as research and charity care as the nation's health care marketplace becomes increasingly profit-driven or cost-conscious" (Kong, 3/24). The Wall Street Journal reports that the studies "are among the first to provide significant documentation for what some economists and researchers have long suspected are important consequences of the rise of managed care in markets around the U.S. (Winslow, 3/24)

Managed Care Matters
      The first study in this week's Journal of the American Medical Association found that physicians in areas with high managed care penetration and those who are "more heavily involved with managed care plans" provide less charity care than their counterparts in other areas. Researchers from the Center for Studying Health System Change and the Kansas Health Institute surveyed 10,881 physicians about the levels of charity care they provide. Overall, 77.3% provided charity care in the month prior to the interview -- an average of just over 10 hours per week. Of the physicians who provided charity care, those with no involvement in managed care provided the most. Those "who derive 85% or more of total practice revenue from managed care provide about half as much charity care as physicians who derive no revenue from managed care and about 40% less than physicians who derive 1% to 20% of practice revenue from managed care." In addition, physicians in "areas with high managed care penetration ... provide about 25% fewer hours of charity care then physicians who practice in areas with low managed care penetration." Physicians in solo or small group practices were also more likely to provide charity care. The researchers theorize that this is because the "greater financial pressures" of managed care may limit physicians' "ability to cross-subsidize care for the medically indigent by shifting the costs onto third-party payers" (Cunningham, et al., 3/24 issue). Peter Cunningham, the author of the study, said, "The research suggests that holes in the safety net may be widening" (HSC release, 3/23). Click here to read an issue brief summarizing this and a related study.

Where's the Dough?
      Market pressures may put the squeeze on academic health centers by affecting the amount of institutional funding available for faculty research, according to a second study published in this week's JAMA. Researchers from Massachusetts General Hospital and Harvard Medical School in 1996 surveyed 2,336 medical school faculty at 117 schools to determine whether faculty in competitive health care markets "experience lower research productivity and less success in obtaining research grants." The authors found that three years ago, medical faculty received $375 million in institutional funding for their research, with funding twice as high in the least competitive markets. Among faculty who secured research funding in such markets, 6.1% of total research funds were derived from institutional sources. By contrast, in the most competitive markets, only 2.5% of total funding was derived from institutional funding (Weissman et al., 3/24-31 issue).

Who's to Blame?
      In an editorial accompanying both studies, Dr. Robert Fletcher of Harvard Medical School said it "is not useful or accurate to blame managed care itself, as if it were a malevolent external force somehow imposed on an otherwise sound system," and notes that the U.S. chose managed care through its rejection of universal health insurance and fee-for-service medicine. He further notes that "[i]t is not reasonable to expect a conglomeration of competing health care organizations to spontaneously take responsibility for enough teaching, research, and community service to meet society's needs." He concludes that it is up to government to design some mechanism to meet these needs, such as an "all-payer pool, in which all insurers are required to contribute their fair share for teaching, research, and community service" (Fletcher, JAMA, 3/24-31 issue). Princeton University economist Uwe Reinhardt echoed that sentiment, saying, "I see in the medical establishment all this hand-wringing of saying the managed care industry is destroying all the good things in American health care. That's bull shine. Do we want this research? Yes? Then let's pay for it. Do we want to provide the uninsured care? Yes? Then let's pay for it" (Stolberg, New York Times, 3/24).