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Hot Off The Press

Managed Care Has Not Improved Healthcare Quality, MCIC Executive Survey Finds

MANASQUAN, NJ - Managed care plans have not fulfilled their mission of improving healthcare quality in 2002, according to an exclusive survey of health and managed care executives by the Managed Care Information Center (MCIC).

Fifty-nine percent of the survey respondents do not believe managed care plans are improving healthcare quality.

The respondents included executives from health and managed care, consultants, HMOs, PPOs, other health insurance companies, hospitals and health system providers, medical supply, technology, and pharmaceutical companies.

The leadership survey also sought the opinions of executives on issues surrounding progress in quality improvement and ease of access to care.

Respondents were almost evenly split when it came to the question of quality improvement.

Fifty percent believed health plans are working to improve the quality of healthcare. Forty-eight percent do not believe quality has improved.

On the questions of improvements in the ease of access to care, the majority of survey participants – 57 percent – do not believe it is becoming any easier to access care through a managed care plan. Forty-three percent believe that managed care has improved access to healthcare.

The breakdown of survey respondents includes:

  • Hospital/health system/provider group – 29 percent
  • HMO/PPO/Insurance company – 22 percent
  • Consulting firm – 22 percent
  • Medical supply/technology/pharmaceutical company – 7 percent
  • Other – 20 percent

Not surprisingly, the vast majority of respondents from hospital and healthcare systems said managed care has not improved healthcare quality, while the bulk of those in the managed care organization said it had.

“Many managed care companies are giving primary care physicians the ability to make referrals for preventive and minor care without going through the HMO to obtain a referral number,” said an HMO product manager.

“Simply look at the HEDIS (Health Plan Employer Data Information Set) measurements for the majority of the health plans reporting,” said the president of a health plan. “This clearly indicates that managed care is improving quality. Can non-managed care organizations document the same?

But many in the hospital and healthcare systems field said that most managed care plans placed profits ahead of quality care.

“Quality is the secondary consideration in most cases and it only moves to the front when it impacts either profits or public relations,” said a contract manager in the hospitall/health system/provider category.

“If quality were a significant consideration, most managed care plans would invest as much in their quality improvement systems and personnel as they do in their payment and review systems and personnel,” the contract managed added.

Most patients don’t understand what their plans allow, especially with the increasing number of plan types and their systems. They often stay away from the healthcare system until they are forced to use it in emergencies, said a regulatory affairs director in the hospital/health systems/provider category.

Doctors and healthcare workers also are often not familiar with the details of health plans, the directory said.

“Another major issue is that the hospitals take the hit for length of stay, inappropriate admissions, inappropriate utilization and poor physician documentation,” the director said.

“But the physicians actually control the patient’s care, so the hospital is penalized for something they cannot control,” the directory added. “Managed care needs to work both sides of the wallet, or hold the physician more accountable.”

A nurse care manager who speaks to HMO utilization review nurses every day said their priorities are focused on filling their computer screens – a “total waste of a nurse.”

“I can get three calls a day on one patient asking when they will be discharged and what can I do to get them out sooner,” the nurse case manager said. “The HMOs have totally failed in their purpose. They are bloated organizations which do little to actually help their members,”

Some of the larger HMOs are attempting to address quality improvement issues, said a vice president in the hospital/health system/provider category.

“But the primary focus continues to be on the bottom line – profits and premium escalation at the expense of the providers,” the respondent said.

Those on the HMO side of the fence said in general that managed care had improved healthcare quality.

Many managed care respondents pointed out the increased number of providers in networks, easier access and more focus on meeting quality standards as evidence that managed care is improving healthcare quality.

“HMOs are able to efficiently control costs and provide high quality medical care to individuals from all areas of society,” one respondent said.

A director of health services in the HMO/PPO/insurance company category said managed care plans that strive for National Committee on Quality Assurance (NCQA) and URAC accreditation are improving healthcare quality.

“Regarding ease of access to care – I can’t speak to access for other plans, only here,” the director said. “We re-look at ease of access and its impact on the quality of care as well as the financial impact.”

But only vice president in the HMO/PPO/insurance company category with many years in the managed care field said he never had a CEO who valued the (plan) member or quality care.

“The bottom line cost savings was always the number one concern and where the dollars were focused,” the respondent said. “If the CEO will not value and focus dollars, there is never a chance for managed care to really improve quality care.”

The majority of the consultants who responded to the survey took a dim view of the rolel managed care has played in improving quality of care.”

Only five of the 22 consultants who responded to the survey felt that managed care had improved healthcare quality. The others said that it had not.

“MCOs are still too slow to realize and respond to the extent to which they can improve the health and lives of their members while saving money for themselves and particularly for their employer clients,” said a principal in a consulting firm. “The need to focus more on their clients and members’ “success” instead of being so obviously and sometimes scandalously obsessed with their own.”

A president and CEO of a consulting firm said consumers still have difficulty in obtaining specializing service care.

“It becomes apparent that the MCOs do not encourage their members via the grievance procedure,” the CEO said. “By the time the process is implemented, most consumers are either more ill, have additional needs as a result of the lack of care or dead.”

A principal in a consulting firm said it didn’t matter what MCOs did, because providers and practitioners control the quality of care and the ease of access to care.

“MCOs have backed off the things that could have resulted in improving quality of healthcare, because of the public, media and the medical backlash that came from MCOs dictating medicine,” the consultant said. “Over, under and inappropriate utilization, coordination of care – these things are quality of care and the controls that MCOs put in place to address the issues and problems are being eliminited.”

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The Managed Care Information Center (MCIC) gathers, compiles, analyzes, studies and distributes business information on the managed care industry. The MCIC delivers this strategic business information to its clients via executive newsletters, yearbooks, leading industry databases and directories, management reports, and client research studies. The information is available in print, on CD-ROM and via the Internet at

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