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Home / News & IndustryManaged Care Insight and Analysis
Updated: June 1, 2011
What Keeps Health-Managed Care Executives Up At Night

The challenges and chief concerns of the executives who lead and manage hospitals and managed care organizations range from dealing with the implementation of the Patient Protection and Affordable Care Act, the relationships between payors and providers and the nation’s current political uncertainty, according to the results of the "Managed Care Leadership Survey."

Survey participants told us among the greatest challenges facing health and managed care this year are:

  • Clarification–resolution of national health reform in terms of how and when it will be operationalized over the next two to four years;
  • Reconciling the changes pending with healthcare legislation into current practices implementing health reform;
  • Political uncertainty;
  • Significant changes in the relationships between payors, providers and patients due to health reform;
  • Controlling healthcare costs;
  • Increases, shifting of costs to patients and providers;
  • Competition;
  • Decreased Medicare reimbursement;
  • Managing through ambiguous legislation; and
  • The unwillingness of large payors to negotiate.

"Continuation of the fee-for-service model" is a key concern, said an HMO manager of business development. "This model has no cost controls built in and rewards for action, not results. The inflation that comes from this system is putting negative pressure on primary care and giving political fodder for solutions that ration care."

A product development executive with a health plan cited Medicare changes in payments to managed care as a significant challenge.

Costs were cited as a challenge by the executive vice president of a firm that provides services to managed care companies. "Costs continue to rise and present ongoing problems regardless of what eventual impacts arise from reform."

A senior consultant with a consulting firm agreed. "All the initiatives simply have one time reductions but the consumption trends continue and obesity/lifestyle is the strongest push."

Tiered networks that exclude academic medical centers are a major concern for the director of managed care contracting with an integrated healthcare system. "Patients who sign up for these may not understand the limitations of their networks. If they do not need specialized care, then that is OK.

"But if they need the specialized care that only an academic center can provide either they will not be able to access the care or they will access it, self-pay and bad debt will rise," he explained.

A hospital director of managed care said, "CPT 10 – the great unknown" was a concern. "It’s hard to predict impact, and our readiness is also reliant upon the knowledge and readiness of physicians, including those that are not part of our organization."

A key concern of one survey participant is "managing through ambiguous legislation. Erroneous conclusions lead to wasteful and costly efforts."

According to Tony Markey of AudigyCare, a physician organization, "navigating an increasingly complex morass of entities both to partner with and as well as to compete against is key [a] challenge.

"Since healthcare is regulated at the state level, it’s extremely difficult to start and run a national program with standardized features. Concurrent to this, the MANY types of organizations that can refer patients to us are extremely varied."

The uncertainty of what impacts national health reform measures, reimbursement, and what coverage mandates, etc., will have on the industry and economy concerns G. Douglas Atkinson, president and CEO of a consulting firm.

There is a pressing need for clarification and resolution of national health reform in terms of how and when it will be operationalized over the next two to four years, he believes.

"Sustaining current reimbursement requires many internal changes not yet in place with physicians and infrastructure," offered a hospital vice president of managed care.

Lawrence Berman, a healthcare attorney and consultant, said implementing health reform is the greatest concern "because of the potential upheavals in the existing system, the magnitude of the changes, and the unsettling political debate keeping everything up in the air."

The unwillingness of commercial payors to negotiate is the key challenge cited by the director of an MSO central business office.

Greg Loughlin, vice president of strategic growth with New West Health Services, believes medical loss ratio restrictions are the main challenge "because our plan has historically used one line of business to subsidize another in any given year."

By splitting our blocks of business into separate, smaller blocks that adds immense variability to our claims, Loughlin explained. "We may have to pay rebates on one block and take losses on another - thus losing overall."

The survey was conducted among Managed Care Information Center’s online among subscribers to The Executive Report on Managed Care and the Managed Care Weekly Watch.

For more information on the Managed Care Information Center,

  This article was taken from:
The Executive Report on Managed Care

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