As more managed-care companies move toward offering open-access products that are more open, how much management will be left in managed care?
It's probably too early to answer that question. But it's out there-another potential tripwire for the error-prone managed-care industry.
Some observers, particularly in California, where many managed-care trends begin, worry that pressure to expand access to physicians and consumer choice will unravel many of the cost savings and quality benefits of managed care.
"If you keep chipping away, you'll be back to the `good old days' of indemnity," warns Cora Tellez, president of Prudential Health Plan of California. Tellez fears that after access is expanded, closed physician panels will be opened, and some financial and utilization controls will be eliminated. After that, the managed-care model might disintegrate.
"If you take the reins off, you could be back to the kinds of cost trends you saw before managed care took over," agrees Greg Crawford, a healthcare analyst at brokerage firm Fox-Pitt, Kelton in New York.
But proponents insist they're not throwing the baby out with the bath water but simply responding to the market with more-accessible products that meet consumer demands.
Health plans that have offered open-access HMO products include Woodland Hills-based Blue Cross of California; Blue Cross rival Blue Shield of California, San Francisco; Norwalk, Conn.-based Oxford Health Plans; and United HealthCare Corp., Minneapolis. Of United's 5.5 million HMO enrollees, 3.5 million are in open-access plans.
The latest health plan to throw an open-access product into the pot is Woodland Hills-based Health Net, Foundation Health Systems' California HMO, which has 2.2 million enrollees in the state.
Health Net unveiled its Elect Open Access product to employers early last month, calling it the "next generation in direct access products." The new option, which will be available to commercial enrollees Jan. 1, gives them the benefits of Health Net's HMO, as well as direct access to the 40,000 physicians-two-thirds of them specialists-in the broader plan's sprawling California contracting network.
Some competing open-access products let enrollees choose physicians in participating medical groups or independent practice associations, or make a certain number of visits per year to a physician outside the main HMO network. Each California Blues plan, for example, permits access to any specialist in the medical group with which the enrollee's primary-care doctor is affiliated. But Blue Cross' Ready Access open-access program has signed up only about half the medical groups in its California-Care HMO network and permits access to limited specialties.
At Health Net, in contrast, the consumer needs to make only a $30 copayment to see any doctor in Health Net's network for an office visit. But the package doesn't include inpatient procedures-just procedures that can be handled in a physician's office.
"We're not going to cover an MRI or a CT scan" or a hospital visit under the limited version of the plan, primarily designed for small to mid-sized businesses, says Michael Close, Health Net's senior vice president of commercial sales and marketing.
Heath Net officials say the plan offers enrollees the flexibility of going outside the HMO network by paying an extra 2% to 5% in premiums.
That's in line with Crawford's estimate that open-access products typically cost as much as 5% more than traditional HMO products.
In contrast, Health Net's 5-year-old open-access product for the small-group market, known as Elect, costs about 15% more than the traditional HMO option. But it allows enrollees to access Health Net's entire network of hospitals, doctors and ancillary providers, unlike the new alternative.
Elect has about 35,000 enrollees in the state, according to spokesman Ron Yukelson. Enrollment figures for the new, less expensive version won't be available until early next year.
Health Net executives are confident the hybrid design of their open-access plan-part HMO, part preferred-provider plan-"works well" as tested in the small-group market. And they're hoping the new Elect Open Access will help generate market share in a highly competitive, harsh market for California HMOs.
Blue Shield of California, a not-for-profit health plan that doesn't have to worry about pleasing investors, has built enrollment with the open model. Its Access+HMO, launched in September 1996, has added more than 100,000 enrollees so far this year. That gives it a total of about 865,000 HMO enrollees-all of them in its open-access product.
Officials won't divulge any specifics, but they insist the model has been profitable this year. "In fact, financially, it has performed better than we had modeled," says Ken Wood, chief marketing officer at Blue Shield.
Wood believes Blue Shield's approach offers more oversight and balance than the PPO alternative, for employers who want more management in their managed-care plan. "If it's too far on the PPO side of the spectrum, it's harder to aggregate data and have the care oversight HMOs are known for," he says.