MANAGED CARE REFORM: Lessons From Gov. Wilson’s Task Force

      Two members of Gov. Pete Wilson's Managed Health Care Improvement Task Force look at "lessons and insights" from the panel's work in the current issue of Health Affairs. Alain Enthoven and Sara Singer -- both of Stanford University and the chair and staff director of the task force respectively -- specifically address steps policymakers, health plans, consumers and physicians should take to offset the growing "managed care backlash." First, the two authors make clear that consumers need to have realistic expectations when it comes to making demands in a cost-contained system: "Americans must reconcile their demand for lower costs with their demand for unlimited care." Consumers also must "perceive direct personal interest in economical care," or else "they have no reason to accept any limitations." Second, consumers need more clarification when it comes to knowing the "rules of the game." Health plans should provide consumers with clear, easy-to-understand information, a move that would "help simplify consumers' interactions with health plans." Third, the authors say "there need to be safety valves," such as assuring patients they can receive care from their provider of choice for an added cost and a good "dispute resolution system." Fourth, consumers need a wider range of health plan choices. And fifth, the problems consumers have voiced about their HMOs and health plans -- "such as being forced to change doctors because a medical group and a health plan could not agree on a contract" -- need to be fixed.

What's Up Doc?
      Enthoven and Singer also note that doctors -- "suffering loss of autonomy and authority" under managed care -- are partly responsible for the managed care backlash. They write that physicians need "to accept the inevitability of cost containment and take responsibility for managing quality and cost." And "[a]ssuming that physicians accept this responsibility, medical groups will need to grow and merge into larger, stronger organizations that accept full risk capitation and responsibility for management of all care." The authors continue, "This delegation of responsibility from health plans to medical groups must lead to simplification of health plan relationships," with "medical groups contracting exclusively with one plan." A large portion of the managed care backlash has also been brought about by other health care workers, the authors note. They concede that many nurses and other health care workers have lost jobs due to managed care cost containment and consolidation, but they say "the intensity of the backlash ... will abate as displaced workers find new jobs" and that legislative remedies may raise costs. They suggest that the rapidly aging population will soon translate into an increased demand for health care services, easing the labor problem.

A Little Cooperation Would Be Nice
      Enthoven and Singer have a word for politicians as well. The authors recommend that California create a new agency for regulating managed care -- one that is "specialized and expert" in health care. [Note: Gov. Wilson and state legislators from both parties support the creation of such an agency but disagree on key details -- see CHL 7/6] The authors further recommend that lawmakers promote the task force recommendations instead of trying to pass their own bills. Things would go more smoothly, the authors write, if politicians "encourage[d] consumers to go to their health plan with their problems, or [to] a well-designed dispute-resolution process, instead of to their legislator."

Victim Complex
     
      Managed care plans also have room for improvement, as Enthoven and Singer note that HMOs "are not helpless victims of the managed care backlash." The authors contend that HMOs are at fault for treating employers, instead of consumers, "as their primary customer." They continue, "Health plans should involve consumers in a process of continuous quality improvement," and consumers should be included in designing the policies and practices of health plans. In addition, health plans should provide continuity of coverage and prescription drugs for patients, allow the chronically ill standing referrals to their specialists and "adopt risk-adjusted premiums." The authors say some HMOs have been resistant, unresponsive and antagonistic to resolving problems with consumers. They urge the industry to be "proactive in the early identification and resolution of problems," and to "transition away from prior authorization ... by making greater use of" practice guidelines, provider credentialing and outcomes-based data.

The Root Of The Problem
      Enthoven and Singer say the recommendations outlined by the managed care task force "could make the market work better for consumers." But they caution that these suggestions "may not alleviate the backlash, which we believe stems from more profound sources." They conclude: "Solutions to these problems will not be easy or quick, and they will likely not take the form of legislation but rather will require fundamental cultural and systemic change" (July/August issue). The task force's full report can be viewed at the California Health Information for Policy Project's website -- www.chipp.cahwnet.gov/mctf/front.htm. Or click task force to read past coverage of the panel's recommendations.