The HMO onslaught forced a retreat, but is a rally possble? The trends suggest that dentistry can reassert its control of dental health plans
Carol D. Tekavec, CDA, RDH
After a seminar 10 years ago, a group of us sat around the dinner table discussing "the way things were" in the world of health care.
Being dental providers, the discussion centered primarily around our work and the direction dentistry was headed. At that time, medical HMOs were spreading fast and becoming very popular around the nation. Our physician friends were chafing under their constraints, and we were becoming concerned as to what the managed-care concept might mean for dentistry in the future.
Today, we face a medical delivery world vastly changed by the proliferation of HMOs. Managed care organizations (MCOs) have altered completely the way we view the complicated sphere of medical treatment. Many of us now belong to HMOs that direct our own personal medical care. We are used to the concepts of "gatekeeper" physicians, strictly regulated referral mechanisms, and the jumping through the hoops required to obtain medical care for our own families.
Our dental patients have surrendered to the concept as well and are now battle-scarred in their ongoing conflicts with their benefit plans. If patients were complacent 10 years ago when it came to "just do what is covered under my insurance and leave the rest," they are exasperated now by the extremely basic service benefits available under many dental HMOs.
Even though we have accepted medical HMOs into our own lives, and even though some of us have accepted dental HMOs into our own practices, is this really "the way things are?" What is the current climate in the medical arena and what might medical trends mean to us in dentistry?
MCOs are universally unpopular (except with stockholders and administrators of the companies who have become very wealthy) for a variety of reasons. Providers, either dental or medical, don`t like them because they feel they put them at a disadvantage when taking care of patients.
Physicians complain that shortened hospital stays, enforced clinical paths (designated treatment plans for specific illnesses) and interference in referral patterns make it difficult to treat patients as they should be treated, and in the proper time frame. Few of us are unaware of the general uproar caused by media attention to the shortened hospital stays available to new mothers and newborns in some MCOs.
"Drive-By Delivery" the newspaper headlines ran. Prime-time comedy shows use HMOs in their jokes.
One character in a popular sitcom was asked, "How is your brother doing after his operation?"
The reply: "He was released this afternoon."
"After open-heart surgery!?"
"Well, he`s in an HMO," to which all the characters nod in recognition.
Patients don`t like them because they limit their access to care and dictate what doctors and hospitals may be used. Unless patients are very sophisticated, the maze of MCO rules surrounding treatment access causes many patients to simply give up; (resulting in another MCO cost-containment mechanism).
Recent focus on how providers are paid under some MCO arrangements is also attracting the attention of corporations and consumers. MCOs that prevent physicians from talking about certain, expensive treatments or that discourage referral to specialists by incentive benefits, have gained notoriety. (Often primary gatekeeper physicians share in a pool of dollars unused by specialists; the fewer specialists patients see, the larger the pool of dollars.)
Patients don`t like the idea that their doctors get paid extra to keep them from seeing a specialist. Something about it just doesn`t seem quite right.
The Medical Model
Health management companies, traditionally insurance carriers, came into being primarily because of the cost of a catastrophic illness. Medical treatment, being highly labor intensive was, and is, very expensive. Health insurance was needed to protect individuals from a cost that few could afford. Employee health insurance became very popular because almost everyone eventually needs health care.
In the traditional model, the insurance carriers paid the bills but had little control over what physicians and hospitals charged. As costs escalated, they passed these costs back to employers in the form of increased premiums.
MCOs/HMOs emerged as a way to control these costs. MCOs employ various tactics to keep costs low. They negotiate with doctors and hospitals for reduced fees and often control how services are provided.
They can do this because of their financial relationships with employers of large groups of people that physicians and hospitals must serve to stay in business. Most MCO plans are just discounted fee-for-service arrangements with artificial barriers to care superimposed.
Consumers receive less health care and physicians and hospitals receive fewer dollars. The MCO, as the arranger, takes a cut from both ends.
Ralph Smith, president of the Houston Health Care Purchasing Organization, compares contracting with HMOs to gambling at a casino.
"It`s like Las Vegas. When the house owns the actuarial numbers and makes the rules, the house usually wins," he said. "The HMO middleman sets the fixed premium for employers, pushes the risk onto providers, then any gain goes to the HMO while providers and employers take all of the downside."
Direct Contracting
Direct contracting would allow providers and employers to bypass the "house."
A new willingness to bypass HMOs is causing providers and businesses to look at direct contracting as a viable option to third-party control. Some companies are replacing HMO programs with modified fee-for-service systems that allow self-referral to specialists.
Super corporation, Motorola, began a nongatekeeper program in 1995 that its employees are flocking to, and many leaving the HMO option still offered. The Motorola program does employ an outside administrator, but plans on controlling costs by requiring enrollees to take a series of baseline health tests and establish a lifestyle improvement program outlined by their primary physician. Utilization and quality perception will be closely monitored.
The idea of more open access to care also is gaining acceptance across the board.
Legal experts are advising MCOs that agressively manage models - which vigorously limit access through gatekeepers and provide financial incentives to providers - may be opening themselves up to litigation. While carefully worded provider contracts usually require that MCOS be "held harmless" by providers and patients for poor outcomes, court cases of the future may nullify these.
Recently, several high-profile cases have been judged against capitated gatekeeper HMOs and their doctors for denying or delaying care for patients who later died. Some states are even moving toward requiring health plans to specifically reveal to patients payment methods and finan-cial incentives for providers.
In addition to better access, patients are demanding more choice from their employers. In Denver, a business buying group called the Alliance, has found that its member companies are requiring more diversified physician networks, even if this means higher costs.
Is Backlash Coming?
Dr. Paul Ginsberg, president of the Center for Studying Health System Change in Washington, D.C. says that health plans today actually serve four main functions: marketing, actuarial services, risk pooling, and utilization managment.
The backlash against MCOs has been heavily fueled by capitiation plans shifting more risk to providers. To track this risk exposure, providers must do their own acutuarial accounting and utilization management. If they already are performing these tasks, why should they contract with an HMO to do it as well - many times in an adversarial way?
Dr. Ginsberg says that it is possible that HMOs may evolve into organizations that control health-care information systems, with these systems "for rent" to providers involved in direct contracting.
The future of direct contracting depends greatly on physicians and hospitals cooperating to reduce costs without an outside party "controlling" them, as well as employers` ability to self-manage programs.
The American Association of Health Plans does not feel that employers can manage systems effectively without outside controls. HMOs maintain huge databases with which providers and hospitals can be compared and costs devised.
Without access to these databases, even large employers will be at a disadvantage when devising plans. Control and access will likely be strictly governed by HMOs protecting their own interests.
The essential question in health-care administration always has been who will control the system. MCOs are now the "general contractors." But providers and consumers want more input and more control, and are becoming more adamant about receiving it.
As dental practictioners, we are the sole providers of care that all human beings need. Regardless of which contracting mechanisms become "the way things are," dentists, hygienists and assistants cannot be excluded.
The author writes a monthly column on dental insurance for Dental Economics. She is a practicing dental hygienist, the author of two insurance-coding manuals, co-designer of a dental chart and a national lecturer. Contact her at (800) 548-2164.
The Fable of Buying a New Coat From an HMO
Imagine if such a middleman was required in other areas of consumer purchasing, say, shopping for clothing. You decide that you want to buy a new coat for your son. Your employer provides clothing benefits as part of your salary. Instead of going to the department store and picking out a coat that your son likes and you can afford, you are required to go to a "clothing counselor."
This counselor evaluates your son`s need for a coat. If he determines a need exisits, he gives you a voucher and refers you to a specific clothing store that has contracted with the clothes couseling group to provide discounted prices for coats. A portion of the money from the voucher goes to the clothing counselor for evaluating the situation.
When you and your son arrive at the store, you take your pick from five plan coats covered by the voucher. If the clothing counselor decides that your son does not need a coat, he gets to keep the money for evaluating the situation, plus the money that would have gone to the store. (The person in charge of arranging for services makes more money if no services are performed.)
It would, therefore, be in his best interest to keep you from buying your son a coat.
It is easy to see that if you were allowed to decide for yourself if your son needs a coat and went to the store directly, you, and your employer, would save money by eliminating payment to the clothing counselor; the store would make money by being able to charge a standard rather than a discounted price for the coat, (in addition to eliminating the risk that the counselor would decide you don`t need a coat) plus you probably could afford a better coat.
While this is a simplistic example, the fact remains, reliance on a medical administrative third party costs money; money that might instead be funneled directly to medical care.
As patients, providers and employers question the framework of MCOs, what began as a quiet rumble on the landscape has been gaining momentum in recent months. All are wondering if there might be another way of looking at medical-care management that involves more than just limiting access and cutting fees.
MCOs do not produce anything of a medical nature. They analyze paperwork and arrange for care. Is the MCO middleman really necessary?
A Prediction About the Future That Is Not So Gloomy
Trends in the control of dentistry are emerging. Dental HMOs are quite different from medical HMOs in scope and are not as widespread nationally.
According to the National Association of Dental Plans, only 15 percent of dentists participate in DHMOs. In addition, dental treatment is left out of many MCO medical plans, and only token care is provided in many others.
Traditional dentistry already incorporates two major factors that MCOs have imposed on medical care. Treatment primarily is provided by general practitioners (with referrals to specialists typically generated by these GPs), and preventive care is stressed. The cost of dental care, while expensive for the average person, is very low when compared with catastrophic illness.
While most dentists do not like MCOs, it is likely that in the near future not many more than the 15 percent already involved will be needed to work with them. With 15 percent providing care for 22 million persons in dental HMOs (20 percent of the dental benefits market) probably less than 20 to 25 percent of dentists will be necessary in the future.
Multispecialty groups probably will provide much of this care as they often are targeted by MCOs. (MCOs consider groups easier to recruit, more efficient, and more cost effective than solo practictioners).
With 20 percent of the dental-benefits market handled by DHMOs, 80 percent must be taken care of by some other mechanism. Direct reimbursement may become more popular and feasible with corporations as time goes by. The concept follows trends occuring in the medical model now.
Public concern about the future of health care in America is something that will not go away. As the public demands more accountability, lawmakers will become increasingly more involved and inclined toward legislation and regulation. As the public loses faith in MCOs to manage quality, different control mechanisms will evolve. Some of these mechanisms may affect the way we work in our dental practices, some may simply fade away.
