It's time for providers-physicians and hospitals-to take control of the nation's healthcare delivery system and give reasonable-cost, high-quality care and service to the people who depend on government programs and employer-sponsored health insurance.
Providers have been subjected to the micro-management of insurance companies and HMOs for far too long. The net result is the patient's care is more in the hands of the payer than the patient's physician. We need to organize ourselves to manage patient care to the standards payers require.
Both groups-providers and payers-should be doing what they do best. Providers should make medical decisions. Likewise, payers should handle the insurance risk and sales/ marketing functions.
How did the decisionmaking role for patient care get reversed? Managed care originated when healthcare costs began rising at an alarming rate, and business and government found these high costs unacceptable. The middlemen-the payers-were asked by their clients to begin managing care to reduce health plan costs.
Payers initially weren't very intrusive. But as time went on and costs kept rising, they resorted to more and more intrusive systems. They began second-guessing health professionals, making medical decisions on what is needed for patient care.
The relationship between physician and patient changed because the payer was inserted between them.
Managed care has gained a tarnished reputation because most people have their own anecdote about how it didn't work or, worse yet, was harmful. An $89 million jury award against a California HMO is a reflection of general distrust of payers' motives and ability to manage patient care.
Utilization review by payers is an external inspection process. However, continuous quality improvement has taught us that such external inspection doesn't provide lasting improvement.
As providers, we should center our efforts on finding and providing the most effective, efficient and appropriate healthcare. We should accept it as our responsibility to organize ourselves and manage patient care. In addition, we need to use many of the same systems-such as utilization reviews and best practice protocols-that payers have used to micro-manage us.
When we organize ourselves and put these systems and disciplines in place, we will be able to contract with payers to provide a defined set of benefits to a defined population for an established price at a set quality level.
Providers across the country are learning the difference between business risks (managing the cost of care) and insurance risk (the occurrence of an unexpected event).
In this model, the payer's role is to write group stop-loss insurance, market and sell the product, define the benefit structure, enroll and disenroll the patient, and collect the premium. In addition, the payer would monitor the provider group to be sure it's performing to the standards (cost, quality and service) that were agreed upon. The splitting of the roles of payers and providers is clear and reasonable. It plays to the strengths of each party.
The notion that providers should manage themselves is acknowledged and supported by both state and federal authorities. Government units around the nation and in Washington are developing statutes and regulations to permit provider service networks to take on the role of managing the care of the patient.
In the recent merger of U.S. Healthcare and Aetna Life & Casualty Co., one stated reason for the deal was the "rapid consolidation among hospitals and doctors." Payers and the government understand that the benefit of the provider service network is the reduction of medical costs, which translates into savings for the government beneficiary (both in Medicare and Medicaid) and lower premium costs, which payers can use to attract new enrollees.
Providers, both hospitals and physicians, are at a crossroads. We can either prepare ourselves to be accountable and responsible for the care of patients while collaborating with payers, or we can resist the changes occurring in the marketplace and continue to force payers to micro-manage patient care.
We must prove ourselves by investing in the resources necessary to be effective managers and bring change in our behavior by eliminating inappropriate services that have crept into the care of our patients.
Actions will speak louder than words. We must be open and frank with ourselves, our medical staffs and the board members of our hospitals. Those who speak the words but don't deliver what is required will be found out quickly.
This is a winning situation for all stakeholders. Patients will have their care controlled by providers, who are the most qualified to make medical decisions. Providers-physicians and hospitals-will be stepping up to assume their appropriate role, the managing of the medical care of the patient, while being held accountable to a set of standards. The payers will be relieved of the role of medical management and can center their efforts where they have indisputable expertise: in marketing/sales and insuring against risk. If we all perform well in this model, managed care will enjoy a good reputation in the marketplace.