Health plans, physicians disagree on healthcare

HealthLeaders Media survey

Health plans, physicians disagree on healthcare

Health plan executives believe quality improvement initiatives, pay for performance (P4P), electronic medical records, and consumer-directed healthcare will help their organizations in the next three years, whereas spiraling costs, sour relationships with physicians, and government intervention and mandates will have the most negative effect, according to HealthLeaders Media’s first health plans survey.

The survey also found that:

  • Health plans and physicians disagree on several issues
  • Health plans support consumer-directed health plans (CDHP), although many question whether CDHPs empower members
  • Insurers like disease management (DM) programs, although they are unsure how best to provide those programs

The survey was part of the larger HealthLeaders Media Industry Survey 2009 report, which is based on seven concurrent surveys sent to healthcare leaders in seven segments across the industry: CEO, finance, technology, physician, health plan, marketing, and quality leaders.

Although health plan respondents pointed to several positives they expect during the next three years, they were not as positive about reimbursement cuts, physician and nurse shortages, uncompensated care, and increased regulatory scrutiny. (See Figure 2 on p. 6.)

When looking at the larger managed care and health insurance industry, respondents believe costs, provider relations, and government intervention will have the most negative effect on the industry in the next three years. (See Figure 3 on p. 7.)

Physician/health plan disagreement

For the past several decades, health plans/managed care and physicians have been fighting over payments, billing, and how best to provide quality care.

When asked which of six choices would most improve the relationship between payers and physicians, more than half of health plan survey respondents suggested P4P programs that focus on certain health measures or speeding up the processing, fixing, and paying of claims. Less than 20% of managed care respondents thought increasing reimbursement rates would be effective. (See Figure 4 on p. 8.)

On the other side of the relationship, more than half of physician respondents said that the best way to improve relations was to increase reimbursements, whereas only 7% suggested the health plan survey’s top response—P4P.

The disparity between health plans and physicians goes beyond reimbursements and the best model for healthcare, says Emad Rizk, MD, president of McKesson Health Solutions in Broomfield, CO. The two sides don’t even agree on the definitions of programs, such as what defines P4P, DM, and the medical home concept. “There’s too much disparity about what each of these are. I don’t think you can find two pay-for-performance programs that are the same,” says Rizk.


The disconnect was also evident concerning the model offering the best hope for healthcare. Health plan survey respondents suggested CDHPs were the way to go, whereas government-mandated universal health insurance and government-funded universal coverage lagged behind.

Ian Duncan, FSA,&MAAA, president of consulting firm Solucia, Inc., in Farmington, CT, says he believes health plan respondents oppose government-run healthcare because segments of healthcare are still feeling the sting from the last attempt at it in 1994.

“Given that politicians in Washington are interpreting election results to imply a mandate for them to take greater control over one-sixth of the economy, the opinions of those who are actually responsible for delivering healthcare and who have day-to-day experience of current problems is sobering,” says Duncan.

Respondents to the same question from other areas, such as physicians and marketing personnel, suggested government interventions were a better solution. In fact, more than half of physician respondents chose a government solution. Physicians question CDHPs because the sickest patients don’t profit from the benefit design, says Rizk.

“The question about CDHP is whether or not it works for sick individuals versus healthy individuals. This is where the providers have an issue, because providers have a tendency to see sick people,” says Rizk.

As patients age, they need potentially expensive preventive tests. If the health plan does not waive those preventive fees, CDHP members can spend much of their deductibles on tests.

“I think CDHP is a generational thing—it always will be. It works for an individual; it doesn’t work for a whole family as much,” says Rizk. “They are not as sophisticated in getting enough information so they can make rational decisions.”

Although health plan survey respondents supported CDHPs, they were also realistic about its effectiveness. Slightly more than half of health plan survey respondents said they believe CDHPs save health plans money and empower consumers, but the remaining respondents did not believe the plans empower consumers. (See Figure 5 below.)

Member engagement

Many health insurers, population health management companies, and assorted vendors have looked to member engagement as a key to consumerism. Getting members activated and involved in their health and healthcare will ultimately improve patient outcomes and lower costs, the theory goes.

More than 60% of respondents said their company’s member outreach is moderately or very effective, whereas nearly 10% of respondents acknowledged that their organization’s communication with members is not effective. (See Figure 6 on p. 9.)

As to how to engage members effectively, nearly 33% suggested using the best health coaching tools, and another 31% pointed to linking financial incentives for physicians to positive health decisions. (See Figure 7 on p. 9.)

On the negative side, more than 17% of health plan respondents don’t think there is any way a managed care organization can truly alter behavior.

Population health

Health plan respondents supported DM and population health programs but were unsure how to best provide those services.

Most respondents (41%) said DM saves money and improves outcomes in some cases, with the second most popular answer being that it saves money and improves health outcomes in all cases (38%). Less than 5% of managed care respondents said it doesn’t save money or improve health outcomes. (See Figure 8 at right.)

Additionally, half of health plan survey respondents plan to insource all DM and wellness programs, and one-quarter plan to outsource some DM and wellness offerings. (See Figure 9 on p. 10.)

Christobel Selecky, president and CEO of DM company LifeMasters Supported SelfCare in Irvine, CA, says health plans are looking to insource programs because they want to contain costs. The pendulum has swung to insourcing DM, but whether health plans can provide those programs effectively is in question.

“It remains to be seen whether health plans that insource disease management are going to be held at the same standards as demonstrating outcomes and whether they do it in a cost-effective way,” says Selecky.

The industry believes DM works but questions how to provide those services in the most cost-effective ways and which programs work best for which populations, she adds.

DM companies have found that their programs have the best return on investment when they’re focused on the sickest populations, but questions remain about the model, Rizk says.

One of the reasons healthcare leaders are questioning DM’s effectiveness is because of CMS’ failed Medicare Health Support project. CMS ended the project in 2008, citing unenthusiastic results. Despite that setback, about half of respondents in the health plan survey believe CMS will try another DM-based demonstration project. (See Figure 10 below.)

“It doesn’t surprise me that companies think that Medicare will take another run at DM,” says Duncan. “Politicians have indicated this. Whether the reimbursement that CMS offers will make it worthwhile for companies to participate is the real issue.”

Medical home

Few respondents believe a new medical home model will feature DM companies collaborating with physicians. DMAA: The Care Continuum Alliance (formerly the Disease Management Association of America) has been promoting the medical home as a collaborative effort between physicians and DM, but most respondents to the health plan survey don’t see that happening.

More than 42% of respondents do not expect medical homes will have any effect on health plans and managed care in the next three years. Those unimpressed with the medical home were unmoved because of the lack of demonstrated findings or because they didn’t know enough about the topic. (See Figure 11 at right.)

Selecky says many in healthcare are unsure about the concept because the theory is not fleshed out yet. She understands what can be accomplished with the medical home but questions how small physician practices can implement those programs.

The uneasy relationship between health plans and physicians are punctuated throughout the survey results, which Selecky says doesn’t surprise her.

However, she adds, physicians can be a powerful ally for health plans and DM companies if the sides can come together.

“Physicians are really hypersuspicious of anything that they see as an effort by managed care to influence or manipulate them,” says Selecky. “It’s understandable why they feel that way.”




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