Saturday, November 06, 1999
HMO change may set trend doctors want
BY TIM BONFIELD
The Cincinnati Enquirer
United HealthCare Corp. is winning applause from doctors for its plan to end an unpopular HMO practice of requiring pre-authorization for most hospital stays and diagnostic tests.
In fact, the reforms United revealed on Thursday come so close to giving doctors exactly what they say they've wanted for years that some are wondering: Where's the catch? (Friday story)
United's changes — to be announced in more detail next week — come just as health care reform issues boil into a front-burner political issue in Congress and in the 2000 presidential campaign.
Soaring drug costs are hurting seniors. The ranks of the uninsured are rising. Employers face rising premiums. Health care providers are so concerned about low reimbursement rates that some hospitals are dumping health plans and doctors are forming unions.
Amid this turmoil, some see United's move as part of an HMO industry effort to make voluntary changes before the federal government approves something the HMOs really don't like — giving patients the right to sue over allegations of denied care.
“When I first heard about it, my initial reaction was, it's about time,” said Russell Dean, executive director of the Academy of Medicine of Cincinnati. “Then I thought, this is a good move for United from a P.R. sense to sort of get off the tracks before the locomotive of HMO liability picks up too much steam.”
On Thursday, Ken Hoverman, the top local executive for United HealthCare, told a Leadership Cincinnati class that the national health plan is fundamentally changing how it does business.
It found that it was spending $128 million on pre-authorization staff and systems that were “saving” only about $38 million by denying payments for what the plan considered unnecessary services.
Now, the health plan promises to stop requiring advance approval for most hospital admissions and diagnostic tests. Several years ago, United dropped policies requiring a referral from a primary care doctor in order to see a specialist. That means this new round of changes would take United out of the game of second-guessing doctor decisions — potentially removing a cloud of liability over care denials.
“A managed care company should not make medical necessity decisions,” Mr. Hoverman said.
To some, HMOs have finally recognized that most doctors are ordering the right tests and treatments most of the time.
“I applaud their efforts and hope other insurers will quickly follow suit,” said Dr. Jim Farrell, medical director of Riverhills HealthCare, a large group of neurology specialists.
The day-to-day interference from managed care health plans in making treatment decisions has been a top complaint of doctors for years, said Dr. Barry Webb, a family practice specialist and recently installed president of the Academy of Medicine.
“For the doctors who complain they have too many forms to deal with or spend too much time on the phone with health plans, they should be happy with this,” Dr. Webb said.
United may be the first big national managed care company to take this route, but some smaller, regional health plans have already dropped a lot of their paperwork hassles.
In Cincinnati, Paragon Health System manages several health plans offered by Anthem Blue Cross and Blue Shield that cover about 410,000 Tristate residents. Without making any announcements, it dumped most pre-authorization requirements back in 1996, said Paragon president and chief executive Paul Beckman.
The change affected only the local Anthem products. In many of its markets, Anthem plans still require pre-authorization.
“Twenty years ago, pre-authorization made a lot of sense,” Mr. Beckman said. “When we got into this (in the 1970s as Health Maintenance Plan) one of the first things we had to stop was the common practice of Friday afternoon hospital admissions for Monday morning surgeries.”
But years of technology change and reform pressure from managed care has changed medicine. Hospital stays are shorter now and far more clearly justified. Outpatient surgery is the most common kind.
Mr. Beckman predicted that many health plans will be dumping pre-authorization rules.
“It's the trend. I think within a year there will be very few plans still requiring pre-authorization,” he said.
Instead, HMOs are relying more heavily on physician report cards to change how doctors work. Such report cards are private now, but soon may become much more public.
To many, the data analysis and feedback that managed care plans can provide may be their biggest, most positive influence on medicine. As long as the data is accurate, many doctors say they appreciate getting HMO report cards.
Report cards show how doctors compare to their peers in terms of hospital stays, ordering tests, mortality and complication rates, and many other factors. Well used, report cards can measure whether doctors are keeping up with the latest improvements in care.
“Doctors are very much scientists and logical thinkers. Show them facts. Show them that it's valid, and doctors will respond,” Mr. Dean said.
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