Managing for Quality Rather than Profit.

HealthPartners is a collection of medical, dental, pharmacy, hospital, and health promotion and research units in the upper Midwest. The dental component includes 24 dental clinics and a network of 2,500 dentists in a PPO plan, supported by a quality management team. An important feature of this network of clinics and dentists is the opportunity for pooling and analyzing data on oral health- care outcomes. These data are used to mentor the entire office team, to drive systemwide improvements in treatment protocols, and as part of providers' compensation. The management function is centralized but entirely within our very large group practice.

Development and implementation of a dental office assessment program.

This paper summarizes steps taken by a large U.S. commercial dental plan to meet measurement challenges through development of a program designed to assess and improve the practices of dentists enrolled in a large preferred provider network. Data collected by trained evaluators who assessed 1,428 dental offices using a structured office assessment instrument were subjected to psychometric analysis by UCLA researchers. Results suggested that the optimal structure for an office assessment instrument consisted of 71 items organized into 10 scales (clusters of measures) reflecting key aspects of dental practice.

Which preferred providers are really preferred? Effectiveness of insurers' channeling incentives on pharmacy choice.

Efficient contracting of health care requires effective consumer channeling. Little is known about the effectiveness of channeling strategies. We study channeling incentives on pharmacy choice using a large scale discrete choice experiment. Financial incentives prove to be effective. Positive financial incentives are less effective than negative financial incentives. Channeling through qualitative incentives also leads to a significant impact on provider choice. While incentives help to channel, a strong status quo bias needs to be overcome before consumers change pharmacies. Focusing on consumers who are forced to choose a new pharmacy seems to be the most effective strategy.

Provider Acceptance And Beneficiary Access Under TRICARE's PPO Health Plan.

TRICARE provides health benefits to more than nine million beneficiaries (active duty and retired military members and their families). Complaints about access to civilian providers in TRICARE's preferred provider organization (PPO) plan led Congress to mandate surveys of beneficiaries and providers to identify the extent of the problem and the reasons for it. The beneficiary survey asked about beneficiaries' perceived access to care, and the provider survey asked about providers' acceptance of TRICARE patients. TRICARE's civilian PPO plans are required to maintain provider networks wherever TRICARE's health maintenance organization option (known as Prime) is offered. For the years 2012-15, we describe beneficiary access and utilization and provider participation in TRICARE's PPO plans in Prime and non-Prime markets. We also compare individual market rankings for access and acceptance. In both market types, most providers reported participating in TRICARE's PPO network, and most PPO users reported using network providers. In areas where Prime is not offered, PPO users reported slightly better access, and providers were more likely to accept new PPO patients. Areas with low access and acceptance, or where multiple access measures indicate problems, may be fruitful for in-depth investigation.

Patient responsiveness to a differential deductible: empirical results from The Netherlands.

Health insurers may use financial incentives to encourage their enrollees to choose preferred providers for medical treatment. Empirical evidence whether differences in cost-sharing rates across providers affects patient choice behavior is, especially from Europe, limited. This paper examines the effect of a differential deductible to steer patient provider choice in a Dutch regional market for varicose veins treatment. Using individual patients' choice data and information about their out-of-pocket payments covering the year of the experiment and 1 year before, we estimate a conditional logit model that explicitly controls for pre-existing patient preferences. Our results suggest that in this natural experiment designating preferred providers and waiving the deductible for enrollees using these providers significantly influenced patient choice. The average cross-price elasticity of demand is found to be 0.02, indicating that patient responsiveness to the cost-sharing differential itself was low. Unlike fixed cost-sharing differences, the deductible exemption was conditional on the patient's other medical expenses occurring in the policy year. The differential deductible did, therefore, not result in a financial benefit for patients with annual costs exceeding their total deductible.

The effect of managed care on hospitals' provision of uncompensated care.

This study examines the effect of managed care on hospitals' provision of uncompensated care, using a new measure of managed care that is hospital-specific, rather than measured for the area as a whole, and which includes payment by preferred provider organizations (PPOs) as well as by health maintenance organizations (HMOs). Based on data for Florida hospitals in the period 1998-2002, the results indicate that a higher percentage of private managed care patient-days was associated with a decrease in uncompensated care as a percentage of total operating expenses, holding net profit margin and other factors constant. The results suggest that spillover effects on uncompensated care should be taken into account when considering increases in managed care payment.

Insurers' competitive strategy and enrollment in newly offered preferred provider organizations (PPOs).

While early growth in preferred provider organizations (PPOs) coincided with growth of managed care generally, recent expansion has come primarily at the expense of other managed care plans. Little is known about the micro behavior underlying these trends. In 2005, University of Michigan employees were offered PPOs for the first time by vendors who also offered other plans. PPOs helped the offering vendors maintain or increase their total enrollment share. PPOs were most attractive to workers who previously had chosen less managed plans. Because PPOs drew few enrollees from health maintenance organizations (HMOs), there was little evidence of a backlash against managed care in the context of the University of Michigan employee group.

The implementation of managed care for diabetes using medical informatics in a large Preferred Provider Organization.

BACKGROUND: It has been demonstrated by meta analysis that if a regular review of patients is guaranteed, the standard of primary care can be as good or better than hospital outpatient care, however, empirical data suggests that compliance with diabetes clinical practice recommendations is inadequate in primary care. This study describes the reorganization of diabetes care using disease management principles in a Preferred Provider Organization (PPO) operating on a country-wide basis in which each diabetes clinic became responsible for the overall care of all patients with diabetes. METHODS: This descriptive pre and post change study was undertaken in a large public-funded PPO insuring over one and half million individuals. The study was possible due the use of a centralized electronic disease registry which enabled the collection of all patient data. Several markers, such as HbA1C and LDC-cholesterol levels, were used to assess the quality of care for the diabetic patients. RESULTS: Mean HbA1C results of the cohort showed a continuous reduction from 8.1% (S.D. = 1.55) in 1999 to 7.68% (S.D. = 1.47) in 2002 and to 7.79 (S.D. = 1.54) in 2004. Improved results were also recorded for LDL-C 126.37 (S.D. = 35.16) in 1999 to 114.74 (S.D. = 34.49) in 2002, and to 113.39 (S.D. = 33.8) in 2004. The number of diabetic patients seen by the diabetologist increased by 62% over this period, despite an increase in diabetologist work hours of only 23%. CONCLUSION: The reorganization of health delivery for diabetic patients within a country-wide PPO, based on the principles of disease management and supported by medical informatics improves quality of care.

Medicare preferred provider organization demonstration: plan offerings and beneficiary enrollment.

As preferred provider organizations (PPOs) become the dominant model of managed health care in the private sector, policymakers have increasingly viewed PPOs as an attractive option for Medicare. In part to understand how PPOs might operate under the Medicare Program, CMS launched the Medicare PPO demonstration in January 2003. In this article, we examine how PPOs have operated so far under the demonstration, including PPO availability and market entry; premiums, benefits, and beneficiary cost sharing; and enrollment, market share, enrollee characteristics, and disenrollment to date.

Helping members of a community-based health insurance scheme access quality inpatient care through development of a preferred provider system in rural Gujarat.

We describe and analyse the experience of piloting a preferred provider system (PPS) for rural members of Vimo SEWA, a fixed-indemnity, community-based health insurance (CBHI) scheme run by the Self-Employed Women's Association (SEWA). The objectives of the PPS were (i) to facilitate access to hospitalization by providing financial benefits at the time of service utilization; (ii) to shift the burden of compiling a claim away from members and towards Vimo SEWA staff; and (iii) to direct members to inpatient facilities of acceptable quality. The PPS was launched between August and October 2004, in 8 subdistricts covering 15,000 insured. The impact of the scheme was analysed using data from a household survey of claimants and qualitative data from in-depth interviews and focus group discussions. The PPS appears to have been successful in terms of two of the three primary objectives--it has transferred much of the burden of compiling a health Insurance claim onto Vimo SEWA staff, and it has directed members to inpatient facilities with acceptable levels of technical quality (defined in terms of structural Indicators). However, even under the PPS, user fees pose a financial barrier, as the insured have to mobilize funds to cover the costs of medicines, supplies, registration fee, etc. before receipt of cash payment from Vimo SEWA. Other barriers to the success of the PPS were the geographic Inaccessibility of some of the selected hospitals, lack of awareness about the PPS among members and a variety of administrative problems. This pilot project provides useful lessons relating to strategic purchasing by CBHI schemes and, more broadly, managed care in India. In particular, the pragmatic approach taken to assessing hospitals and identifying preferred providers is likely to be useful elsewhere.

From the doctor's workshop to the iron cage? Evolving modes of physician control in US health systems.

As national health systems pursue the common goals of containing expenditure growth and improving quality, many have sought to replace autonomous modes (systems) of physician control that rely on initial professional training and subsequent peer review. A common approach has involved extending bureaucratic modes of physician control that employ techniques such as hierarchical coordination and salaried positions. This paper applies concepts from studies of professional work to frame an empirical analysis of emergent bureaucratic modes of physician control in US hospital-based systems. Conceptually, we draw from recent studies to update Scott's (Health Services Res. 17(3) (1982) 213) typology to specify three bureaucratic modes of physician control: heteronomous, conjoint, and custodial. Empirically, we use case study evidence from eight US hospital-based systems to illustrate the heterogeneity of bureaucratic modes of physician control that span each of the ideal types. The findings indicate that some influential analysts perpetuate a caricature of bureaucratic organization which underplays its capacity to provide multiple modes of physician control that maintain professional autonomy over the content of work, and present opportunities for aligning practice with social goals.

Managed care and infant health: an evaluation of Medicaid in the US.

In this study, we examine the effects of Medicaid managed care (MMC) on prenatal care utilization, infant birth weight, pre-term birth, and use of cesarean section in the United States. We obtain separate estimates of the effect of primary care case management managed care programs and health maintenance organization managed care plans on these outcomes. The results suggest the following: among white, non-Hispanic women, MMC was associated with a 2 percent decrease in the number of prenatal care visits and a 3-5 percent increase the incidence of inadequate prenatal care; MMC was associated with a significant increase in the incidence pre-term birth for non-Hispanic white women, but that this association does not appear to be causal; and MMC had no association with the incidence of cesarean section.

Hospice care in a commercial preferred provider organization population in Tennessee.

This study was undertaken to examine two aspects of care at the end of life. First, we wanted to see whether the cost savings demonstrated repeatedly in the US Medicare hospice population would also be observed in a commercial population in Tennessee. They were. The second primary interest we had was whether there were certain medical services that seemed to presage death. We found four categories of services that profoundly increase in number as the end of life is approached: primary care, hospital-based specialist, non-hospital based specialist, and oncologist services. It is hoped that these findings could lead to a simple predictive model based on readily available claims data to help identify candidates for Hospice Care earlier.

Organizational aspects of physician joint ventures.

This article describes organizational forms of physician joint ventures. Four models are described that typify physician involvement in health care joint ventures: limited partnership syndication, venture capital company, provider network, and alternative delivery system. Important practical issues are discussed.

Managed care contracting/capitation.

Both the general approach for entering into a managed care contract and the subject of capitation are presented. The general approach section outlines the criteria that a physician group should apply in analyzing the feasibility of entering into a managed care contract with any insurer. The physician group's contracting process should be iterative and refined over time. The capitation section addresses issues revolving around the assessment of a capitated contract. The example assumes a typical health maintenance organization-primary care group contract. Not analyzed in this article are the exciting opportunities presented through specialty carveout capitation. Managing the transition to a more competitive environment will be the major challenge facing group practices. Survival in the tightening healthcare market will depend on sound strategic decisions regarding the physician group's mission as well as its relationship to its hospital partners and other delivery systems. To support these strategic decisions, a solid knowledge base and a thorough understanding of the terms and provisions regarding the formulation of these new relationships are necessary. The budget methodology is a relatively straightforward approach to establishing a capitation. Careful consideration will have to be given to the method of allocating the capitation among providers. A special concern is the risk-sharing arrangement with primary care physicians.