SYSTEMS OF CARE

Behavioral Science Lecture

John Fortney, Ph.D.

Assistant Professor, Department of Psychiatry, UAMS

Rationale for Managed Care Versus Fee For Service

• Exponentially rising health care costs

• Moral hazard

• Geographic variations in treatment costs and patterns

• Evidence of supplier-induced demand for health care

National Health Expenditures in the U.S.

0

500

1000

1500

2000

2500

3000

3500

4000

4500

1960 1965 1970 1975 1980 1985 1990 1995Year

Per

Cap

ita

(in

Do

llar

s)

Price Adjusted Medicare Reimbursements for Outpatient Services

Source: The Dartmouth Atlas of Health Care 1998

Ration of Rates of Hospitalization for Hip Fracture to the U.S. Average (1994-95)

Ratio of Hospitalization for Forearm Fracture to U.S. Average

Predicted and actual average lengths of stay of patients treated for depression at 107 Veterans

Affairs medical centers

Acute Care Hospital Resources and the Medical Signatures of the Boston and New Haven Hospital

Service Areas (1994-95)

The Association Between Allocated Hospital Beds and Medicare Hospitalizations for Medical and Surgical Care and for Hip Fracture (1994-95)

Managed Care Cost-Containment Strategies

• Cost Sharing

• Risk sharing

• Utilization review

• Gate keeping

• Provider Choice Restriction

• Carve-outs

Types of Managed Care Organizations

(understanding the alphabet soup)

• FFS: Fee-For-Service (with utilization review)

• HMO: Staff and Group Model Health Maintenance Organizations

• IPA HMO: Independent Practice Association Health Maintenance Organizations

• PPO: Preferred Provider Organizations

• POS: Point of Service plans

Relationship Between Health Plan Characteristics and Type of Plan

Type of Plan Prepaid Gatekeeper Partial Out-of-Plan Coverage

No Out-of-planCoverage

Carve-Out

FFS - - - - +/-HMO + + - + +/-POS +/- + + - +/-PPO +/- - + - +/-

“+” indicates that the characteristic is present.“-“ indicates that the characteristic is not present.“+/-“ indicates that the characteristic may or may not be present.

Trends in Managed Care

• Types of health plans

• Employer self-insured

• Benefits structure

• Managed care in Arkansas

Primary Medical Plan Type

Source: Hay Group Management, Inc. May 1998

Behavioral Health Care Benefits as a Percent of Total Health Care Benefits

0

1

2

3

4

5

6

7

Year 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997

Year

Pe

rce

nt

Source: Hay Group Management, Inc. May 1998

Health Maintenance Organizations’ Enrollment in Arkansas in 1996

Source: Arkansas Department of Health

Enrollment in Managed Care Organizations in Arkansas in 1998

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

180,000

Nu

mb

er o

f E

nro

llee

s

Source: Arkansas Insurance Department, 1998

Contracted Physicians’ in Managed Care Organizations in Arkansas in 1998

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000N

um

be

r o

f P

hys

icia

ns

Source: Arkansas Insurance Department, 1998

Managed Care: How It Affects Clinical Practice

• Contracting with health plans

• Provider profiling

• Utilization review

• Risk sharing

• Integrated versus carved-out psychiatric treatment