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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