[A large network of integrated medical care: the example of Kaiser Permanente in California. First-hand report by a physician]. / Un grand réseau de soins médicaux intégrés: l'exemple de Kaiser Permanente en Californie. Témoignage d'un praticien.

The Kaiser Permanente (KP) system of integrated medical care is a unique model of medical organization in the USA which achieves the twin goals of economic efficiency and first-rate care. Organizationally, it is quite different from most health maintenance organizations (HMOs). The doctors remain independent, but in an exclusive marriage with the Kaiser Hospitals and the Kaiser insurance, both of which are non-profit. KP cares for over 8 million members. KP ensures continuity of patient care whether at home, as an outpatient, or when hospitalized, and promotes prevention among healthy members. The integration of all services produces very high indices measuring quality of care, as investigated by both the press and official government agencies at a surprising low cost. The system also was found to be more cost-effective than the National Health System in the United Kingdom.

Value-based insurance design: aligning incentives to bridge the divide between quality improvement and cost containment.

Rising costs and suboptimal clinical quality have spawned efforts to redesign healthcare benefit packages. Momentum has gathered behind 2 trends; the first, represented by disease management initiatives and pay-for-performance programs, focuses on the quality of care, and uses tools to manage patient health. The second trend, represented by increased patient cost sharing and consumer-driven health plans, focuses on the cost of care and uses financial incentives to alter patient and provider behavior. These 2 trends create a conflict for the patient in that disease management programs--designed to improve patient self-management--aim to enhance compliance with specific clinical interventions, while rising copayments create financial barriers that discourage the use of these recommended services. When patients are required to pay more for their healthcare, they buy less, even if the intervention is potentially lifesaving. Thus, the challenge for purchasers is to devise benefit packages that incorporate a range of features that complement each other in the effective and efficient delivery of care while explicitly avoiding the unwanted negative clinical effects associated with increased cost sharing.

Prepaid group practice staffing and U.S. physician supply: lessons for workforce policy.

This paper describes staffing at eight large prepaid group practices (PGPs) serving more than eight million enrollees at Kaiser Permanente and two other health maintenance organizations (HMOs). Even after characteristics of the patient populations and outside referrals are accounted for, these PGPs have a physician-to-population ratio that is 22-37 percent below the national rate. Two decades of historical data at Kaiser Permanente indicate that its rate of specialist growth was far higher than that of primary care. The study suggests that efficient systems of care can readily meet the demands of patient populations with workforce staffing ratios below current U.S. levels.

Physician organization in California: crisis and opportunity.

Many of the 250 physician organizations that provide care to California's sixteen million health maintenance organization enrollees are in a state of crisis, squeezed between constrained revenues, rising practice costs, and consumer sentiment that favors unconstrained choice over integrated delivery. Medical groups and independent practice associations are retrenching to their core geographic areas, reducing capitation for drug benefits and hospital services, and abandoning dreams of displacing health plans. Consolidation is accelerating in some areas, as medical groups join with hospitals to extract higher payment rates from insurers and employers. The conjunction of consumerism and premium inflation creates new opportunities for organizations that truly can manage health care, but the challenges roiling California's medical groups may preclude meaningful efforts to seize the initiative.

Canaries in a coal mine: California physician groups and competition.

Health care organizations may compete by developing organized processes to improve quality and increase efficiency, or may focus on growing to increase negotiating leverage and on controlling costs through withholding appropriate care and avoiding sick patients. This paper describes key ways in which public and private policy decisions create incentives that influence the competitive focus of physician groups in California, a state in which physician groups and health maintenance organizations are prevalent. These policies do not manage competition in optimal ways: They reward groups for market leverage and controlling costs while failing to fully reward quality and efficiency.

Quality and employers' choice of health plans.

We seek to understand the relationship between employer decisions regarding which health plans firms choose to offer to their employees and the performance of those plans. We measure performance using data from the Health Plan Employer Data Information Set (HEDIS) and the Consumer Assessment of Health Plan Survey (CAHPS). We use a unique data set that lists the Health Maintenance Organizations (HMOs) available to, and offered by, large employers across markets in the year 2000, and examine the relationship between plan offerings, performance measures and other plan characteristics. We estimate two sets of specifications that differ in whether they model plan choice as a function of absolute plan performance or plan performance relative to competitors. We find that employers are more likely to offer plans with strong absolute and relative HEDIS and CAHPS performance measures. Our results are consistent with the view that large employers are responsive to the interests of their employees.

How do HMOs achieve savings? The effectiveness of one organization's strategies.

OBJECTIVE: To examine how a group practice used organizational strategies rather than provider-level incentives to achieve savings for health maintenance organization (HMO) compared to fee-for-service (FFS) patients. DATA SOURCES/STUDY SETTING: A large group practice with a group model HMO also treating FFS patients. Data sources were all patient encounter records, demographic files, and clinic records covering 3.5 years (1986-1989). The clinic's procedures to record services and charges were identical for FFS and HMO patients. All FFS and HMO patients under age 65 who received any outpatient services during approximately 100,000 episodes of the seven study illnesses were eligible. STUDY DESIGN: Using an explanatory case design, we first compared HMO and FFS rates of resource utilization, in standardized dollars, which measured the impact of organizational strategies to influence patient and provider behavior. We then examined the effect of HMO insurance and organizational measures to explain total outpatient use. Key variables were standardized charges for all outpatient services and the HMO's strategies. PRINCIPAL FINDINGS: Patient and provider behavior responded to organizational strategies designed to achieve savings for HMO patients; for instance, HMO patients used midlevel providers and generalists more often and ER and specialists less often. Overall HMO savings, adjusted for case mix, were explained by the specialty of the physicians the patients first visited and appeared to affect patients with average health more than others. CONCLUSION: Organizational strategies, without resort to differential financial incentives to each provider, resulted in lower rates of outpatient services for HMO patients. Savings from outpatient use, especially for common diseases that rarely require hospitalization, can be substantial.

Reassessing the plight of physician organizations in California: the uncertain future for IPAs.

With numerous medical groups and individual practice associations (IPAs) in California now reporting operating losses--and many approaching financial insolvency--the question arises why physician organizations are in such a tenuous situation. One line of thinking is that the problem is attributable to the market dominance of the major health plans and their ability to impose actuarially unsound low capitation rates on professional providers. This article describes four other reasons for the current plight of physician organizations: (1) a physician-centric approach to IPA governance, (2) lack of qualified staff within key operating units, (3) management reporting that is insufficient to support utilization analysis and health plan negotiations, and (4) a highly charged political process for determining physician reimbursement. IPA survival will ultimately depend upon whether IPAs are perceived by their physician members and leaders as true business operations or just as another income source.

Multiple choice health insurance: the lessons and challenge to employers.

This paper offers a second opinion on the issues discussed by Stanley B. Jones in his paper, "Multiple Choice Health Insurance: The Lessons and Challenge to Private Insurers" in the Summer 1990 issue of Inquiry. Multiple choice of health plans is not containing costs of health care or insurance premiums because employers have not yet tried price competition with cost-conscious consumer choice. HMOs in multiple choice arrangements have not saved employers money because of the way employers manage competition. Effective management of competition must be an active process employing an array of tools to create incentives that reward production of high quality economical care.

Professional nursing practice in an HMO: the future is now.

Managed care forms of service delivery now dominate the nursing practice environment. Nursing is potentially a key resource for helping the system to meet the increased and evolving demands, maintaining quality while decreasing costs. However, nurses need additional competencies to function effectively in this environment. Nurse educators need to prepare nurses for these new roles. This paper describes trends influencing nursing roles and identifies the nine categories of competencies needed by professional nurses practicing in HMO settings. Cost-reduction pressures have driven profound changes in the health care system in recent years. Countering these demands for cost-reduction are increases in costs driven by new, more expensive treatments and higher patient expectations. While the future of health care is anything but clear, certain features of the health care system seem relatively certain: major changes will continue to be cost-driven; more hospitals will close, or consolidate or collaborate to compete; and inpatient acuity will continue to increase. In addition, corporate America will increasingly influence how care is delivered and demands for information on health plan performance, such as the Health Employers Data Information System (HEDIS) (National Committee for Quality Assurance, 1997) will increase. These forces will inevitably redirect use of resources within health care organizations. Other external forces that will continue to influence how care is delivered are discussed below.

Segmenting health maintenance organizations to study productivity and profitability.

As the decade ended, health maintenance organizations (HMOs) were increasing in popularity as a means of health care delivery. These groups take many forms, so it is important for the analyst to see if the efficiency and financial results for these different forms vary. The four major forms are profit vs. not-for-profit, chain vs. non-chain, group/staff vs. individual practice association (IPA), and federally qualified vs. non-federally qualified. Using a nationwide database of all the HMOs in the United States, the article compares liquidity rates, leverage ratios, profitability ratios, marketing, and per member ratios across the four groups using paired t tests. The two classifications that showed the most differences were group/staff vs. IPA and federally qualified vs. non-federally qualified. IPAs have a better liquidity position and lower leverage ratios than group/staff but their administrative costs are higher and the time to receive payments and to pay debts is higher. Non-federally qualified have somewhat higher liquidity ratios and higher profitability ratios. These significant differences in financial outcomes indicate that studies of HMOs should segment different major forms of organizations and study them separately before trying to show the effects of different policies on HMO efficiency and effectiveness.

Supreme court upholds state independent review laws: does this help or hinder health plans?

"U.S. Supreme Court Deals Blow to HMOs," trumpeted the CNN headline on June 20, 2002. In Rush Prudential HMO, Inc. v. Debra C. Moran, the United States Supreme Court ruled that state laws requiring external review of health plan/HMO decisions regarding medical necessity of covered services did not violate the federal Employee Retirement Income Security Act and were therefore enforceable. If the media is to be believed, requiring HMOs to give second opinions, i.e., external review, is a major blow. However, a review of the case and the fact that the decision was based on a 5-4 vote reveal that lasting lessons from the decision are probably fewer than the press would have one believe.

Fighting fire with fire: physicians blazing new paths to autonomy.

Thousands of physicians around the country have stopped complaining about being burned by the system and have started reengineering their destinies. They're building super IPAs, forming and operating HMOs, and joining unions to represent their rights in a growing grassroots physician effort to regain control. These physicians have thumbed their noses at managed care companies they say have drastically cut reimbursements, arbitrarily dropped them from panels, dictated utilization, and cost them patients. They're tired of working harder and earning less and frustrated by sacrificing quality in the name of cost reduction. And they have learned that there are ways to prevail.

Patient bill of rights 2001.

Breaking gridlock on managed care reform, a bipartisan coalition in Congress introduced the newest version of a patient bill of rights. Unlike last year's ill-fated Norwood-Dingell bill, the Bipartisan Patient Protection Act of 2001 has strong bipartisan support; concern remains, however, on the provisions that allow patients to sue their managed care plan. The debate now focuses on the type of liability reform that Congress and the White House can agree on. If they are able to agree, a patient bill of rights may soon become law.

A physician's first option for quality.

John Adessa is unhappy with the direction managed care has taken in this country, and he is doing something about it. Adessa, the chief executive officer of First Option Health Plan, dislikes the burden of risk that falls on physicians through capitation arrangements, and he does not believe that patients should be severely restricted in their access to physicians.

Doctors and unions: is collective bargaining the cure for physicians' labor pains?

Increasing governmental regulation, the proliferation of alternative health-care options, and a glut of physicians in some areas have substantially affected the way physicians practice medicine today. Health-care consumers are not the only people affected. Where physicians were once their own bosses, many now find themselves as employers of health-care providers. In this new role, physicians are now considering union representation as a vehicle to assert their interests and concerns. This article examines why some doctors favor unionization, why some oppose it, and the legal implications of unionized physicians.

Guidelines for physician contracting with alternative delivery systems.

The rapid proliferation of alternative healthcare delivery systems--particularly health maintenance organizations (HMOs) and preferred provider organizations (PPOs)--means that physicians contemplating participation in one of these entities must obtain, at the least, information about the group's ability to operate efficiently and effectively. For physicians who are contracting directly with a specific HMO, PPO, or independent practice association (IPA), issues that are relevant in all situations include termination, submission of data, discipline procedures, no solicitation covenants, arbitration clauses, rights to discontinue treatment, use of consultants, compliance with state and federal laws, and exclusivity.

What is the HMO Act and what is its impact on employers?

The explosion in health care costs has spurred the development of Health Maintenance Organizations (HMOS). It is predicted that $180 billion will be spent on health care this year. The search for more economical alternatives to the traditional fee-for-service type of care has naturally focused attention on HMOs. Evidence indicates that the cost of HMO services can be one-fourth to one-third less than the cost of traditional care. Such figures make HMOs one of the most important, and least understood, topics confronting employers today.