Managed Care

 

Consumer-Directed Insurance Plans Problematic for Patients, Docs, HMOs

MANAGED CARE October 2004. © MediMedia USA
News and Commentary

Consumer-Directed Insurance Plans Problematic for Patients, Docs, HMOs

MANAGED CARE October 2004. ©MediMedia USA

What can be lost in the hullabaloo over consumer-directed health plans are the facts that only a relatively small amount of people have so far signed on, and some experts remain skeptical about the ultimate effectiveness of these benefit packages. Forinstance, a Commonwealth Fund report says that CDHPs might actually worsen outcomes (and therefore be less cost-effective in the long run) and that the managed care industry would do much better if emphasis were placed upon quality instead.

"New studies are finding wide variations of cost and quality across hospitals and physicians, yet few private insurers, managed care plans, or public programs reward superior quality or efficiency," says the report "Will Consumer-Directed Health Care Improve System Performance?" which also notes that about 1 million people are enrolled in CDHPs as compared to the 160 million U.S. residents who are covered by traditional employer-sponsored benefits.

One effort that does reward quality, the NCQA-sponsored "Bridges To Excellence" program, is expected to involve 45,000 physicians who contract with six California health plans. They will be paid from a bonus pool of $40 million to $60 million. But this pay-for-performance program, while getting very good reviews in many quarters, is met with some skepticism by many physicians who point out that the ratings are based on data from claims.

Under such a system, Alexander Ruggieri, MD, assistant professor at the Mayo Clinic, tells the Wall Street Journal, a physician who doesn't prescribe ACE inhibitors for heart-failure patients who are allergic to the drugs may find himself out of the running.

"I would be labeled a bad doctor because the claims on my patient with heart failure would not be matched with a corresponding claim for an ACE inhibitor," Ruggieri says.

Still, despite this weakness, the Commonwealth Fund believes that attempting to measure quality is worth the effort, and can reap better results than a shift to CDHPs.

"If consumer-directed care is used primarily as a tool for shifting costs from employers to employees, it will quickly be discredited," says the report. "Instead, the long-term strategy should focus on identifying, demanding, and rewarding performance from providers, with positive incentives for consumers taking a complementary role."

The report is based on a compilation of articles and lectures at a conference on CDHPs in September 2003 that was hosted by the Commonwealth Fund and the Robert Wood Johnson Foundation.

"These findings suggest the need to look beyond reductions in utilization or spending to examine whether these reductions are appropriate and whether they may lead to adverse health consequences," the report says.

Managed care should also be wary from a business standpoint, say the authors.

"It seems clear that consumer-directed health plans enjoy favorable risk selection, which may lead to increasing market segmentation, with lower-income and sicker individuals served by managed care plans and higher-income, healthier individuals enrolled in new plans," the report states. "As a result, enrollment in managed care plans could undergo a long-term decline while premiums for these plans steadily increase."

(See the feature story "Consumer-Directed Care Bets Against Human Nature".)

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