UNITEDHEALTH: Reaction to the End of Utilization Review
Coverage of the UnitedHealth Group's decision to abandon utilization review -- a move heralded by the Associated Press as a "monumental shift for the health maintenance organization industry" -- flooded the nation's newspapers today. The UnitedHealth move "rips up the managed-care rule book," giving its physicians the final say on what care is medically necessary (Siemaszko, New York Daily News, 11/9). UnitedHealth Group's Dr. Archelle Georgiou said, "We've looked at our data, which demonstrates that over 99% of the requests for authorization are approved, anyway. So it costs us over a hundred million dollars a year to say 'yes'" ("World News Tonight," ABC, 11/8). News of the decision, which broke yesterday in the Dallas Morning News, sparked great controversy over the future of managed care: most notably, industry analysts are questioning whether the move is an early attempt to ward off potential impacts of Congress' patients' rights bill. Analysts indicate that UnitedHealth's decision allows the health plan to "smooth relations with doctors and patients, attract more customers and perhaps avoid some future legal liability" as HMOs "battle a backlash against managed care" led by Congress and the states in a series of class-action lawsuits (New York Times, 11/9). John Stone, spokesperson for Rep. Charles Norwood (R-GA), said, " ... managed care companies that turned over medical decision-making to physicians would not be liable to medical malpractice lawsuits" under the patients' rights bill (Freudenheim, 11/9). Others argue that UnitedHealth is simply doing what makes good business sense. Rep. Greg Ganske (R-IA), a key patients' rights legislation proponent, noted that the move was "sort of an admission on their part that their management techniques have not only been wrong for the patient, but it's been wrong for them, for their bottom line" (AP /Baltimore Sun, 11/9).
The decision, said to have moved United Health to the forefront of a trend to lessen managed care regulations, generated a lot of debate in the managed care industry. Commentary roundup:
- American Association of Health Plans president Karen Ignagni: "This is the beginning of a new era in managed care. And you'll see different plans around the country pursuing it in different fashion" ("Nightly News," NBC, 11/8).
- AMA president Thomas Reardon: "This action is historic and represents a long overdue victory for America's patients and the care they receive. Patient care cannot and should not be determined by third parties outside the exam room" (AMA release, 11/8).
- Harvard School of Public Health's Robert Blendon: "I think if they're able to show that they can do this and average premiums just don't rise next year, I think the industry is going to have to follow this" ("Evening News," CBS, 11/8).
- Employee Benefit Research Institute's Paul Fronstin: "This is a move to stay competitive, and I would expect other insurance companies will make the same move in order to stay competitive in this marketplace" ("World News Tonight," ABC, 11/8).
- Consumers for Quality Care's Jamie Court: "This shows that there is now going to be some competition based on quality in the market. This company is trying to set a new standard" (Bernstein, Los Angeles Times, 11/9).