Vol. 4, Issue 6, Nov/Dec 1996	Previous Issues Subscribe to AT Messenger Download PDF Viewer
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Financing Assistive Technology

Health Insurance Update: Managed Care Trends & Tips

Ron Sibert, DATI Funding Specialist

Health insurers, both public and private, are moving aggressively toward a managed care model of service delivery. The primary reason for this trend appears to be financial. Health care costs in this country over the past two decades have gradually grown beyond the public and private sectors' ability to foot the bill. The projected growth rate of Medicaid alone-from $88 billion currently to $150 billion by the year 2000-is a staggering figure by anyone's standards. Several cost reduction models have been proposed over the past several years-mostly as part of a nationwide health care reform effort. Terms such as "single payer" and "insurance reform" and "managed competition"- highly publicized terms less than a year ago-have been set aside with the reform movement itself. Some observers claim that the health care reform movement was abandoned because the proposed models were so incompatible with our current social, political, and business structures. However, there is that one model that appears to have the right ingredients: provides health care at reduced cost, has been around for some time, and has been reasonably simple to implement (albeit with mixed results). That model is, of course, managed care-health care services delivered by what are known as a health maintenance organizations (HMOs) or managed care organizations (MCOs).

HMOs/MCOs are at once the insurer and the health care service (including AT devices and services) provider. This consolidation in large part enables them to provide less expensive medical coverage. It is not surprising then that private firms are encouraging their employees to enroll in these plans, and public health care agencies are also either offering such plans or requiring their beneficiaries to enroll in them. Delaware Medicaid is an excellent case in point. There are also indications that Medicare, the federal health care program for people who are aged or adults who are permanently disabled, will also be encouraging its beneficiaries to enroll in managed care programs in the near future.

Of course, managed care has both good and bad points. But either way, this increasingly prevalent health care delivery system poses new challenges for doctors and patients alike. HMOs/MCOs (henceforth called "providers") provide health care services on a contractual basis to individuals as well as groups insured through their employers or other public and private agencies. Providers receive a fixed dollar amount per patient in exchange for agreeing to meet their enrollees' health care needs during the stated contract period, so the typical provider only profits when it can hold the cost of medical care delivery to a level significantly below the revenues it generates in premiums. In other words, these companies generate profit by maximizing the number of patients the company serves while minimizing the average per patient treatment cost. These objectives can be accomplished in several ways. Some firms, for instance, are increasing their patient loads and their physicians' hours (less costly than hiring additional doctors) to accommodate the patient influx. U.S. Healthcare, which merged with Aetna, pays its doctors up to 1.5% more per patient per month if the physicians work 50 to 60 hours per week-a model that it says Aetna doctors will adopt.

Some providers have been known to control costs by offering physicians financial incentives to provide the least expensive effective treatment. This approach risks compromising the quality of care patients receive. Fortunately, the private MCOs that are contracted to administer the Diamond State Health Plan (the Delaware Medicaid managed care program) are restricted from engaging in this practice when providing services within the scope of their state contracts.

The quality of service a person receives depends very much on the responsiveness of the individual provider, and the consumer's skill in making informed choices. Service options under managed care may be very limited in comparison to the standard fee-for-service plans to which many of us are accustomed. Different companies offer different options, and consumers must be prepared to play a very active role in selecting their managed care providers, monitoring service delivery, and in making whatever adjustments are required to accommodate individual needs.

Consumers with disabilities should take particular care, both before and after enrolling in a managed care plan, to insure that the plan meets their needs. For instance, nearly all managed care providers furnish a list of physicians from which enrollees can choose a primary care doctor. People with disabilities who require the care of certain specialists (due, for instance, to special respiratory, neurological, or orthopedic concerns) should obtain a list of the each prospective plan's specialists.

For uncommon conditions, it is also advisable to check the candidate doctors' familiarity with the condition(s) in question, and whether the plan will accept previously established treatment plans. In the presence of certain conditions-such as severe allergies, respiratory, or cardiac ailments-that may require emergency care, ask how (i.e., under what circumstances) the plan pays for such visits, and whether there are penalties for seeking assistance at nonapproved facilities.

After enrollment, pay careful attention to the quality of care you receive, and be prepared to change plans if necessary. However, there may be delays sometimes because plan changes may only be permitted during open enrollment periods, which usually occur annually. You may also elect to change doctors within a given plan at any time. Taking any such action sends an important message to the provider-namely that something needs to be fixed.

Finally, it is not always possible to anticipate and make provisions for every need or emergency situation. Sometimes you may find it necessary to seek medical care outside of your managed care plan at your own expense. If possible, set aside an "emergency medical fund" to help cover unexpected expenses should they occur.