Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: WEDNESDAY, September 21, 1994 TAG: 9409230026
SECTION: BUSINESS PAGE: B-8 EDITION: METRO
SOURCE: Sandra Brown Kelly
DATELINE: LENGTH: Medium
If you had been at last week's annual meeting of the Blue Ridge Regional Health Care Coalition, you might have concluded that -even if health care delivery gets simpler - we'll all feel a bit sick just trying to determine what kind of coverage is best. And that's both from an employer and an employee perspective.
Employers and providers attended the conference, "Navigating Health Care Benefits in a Managed Care Environment," at Roanoke College's Olin Hall. But all of us should consider what was said.
This area is about to get a double whammy. Not only will it have to deal with national changes in health care brought on by government reform or the specter of it, but Western Virginia is about to be introduced in a big way to managed care. At least three, probably four or five, health maintenance organizations soon will be battling for this area's business.
"This region is on the eve of major changes and opportunities in health care at the same time government is making change," said Paul Mack, a senior consultant with Williams, Thacher & Rand of Richmond.
Mack's role at the conference was to demystify managed care, which he defined as:
"A health-benefit program that directs patients into a network of care that is structured to provide the most appropriate care in the most cost-effective setting."
"Directs," he said, can mean patients are "ordered" or "given incentives" to use the network, which can be a list of doctors or a building.
"Most appropriate care" is a bit fuzzy, he admitted, but "cost-effective" acknowledges that "quality is included."
The kind of health insurance with which most of us grew up is called "indemnity" by the health care industry. It was a traditional plan that allowed an individual to see any doctor at any time or specify any hospital for treatment. It was the most expensive form of health care, Mack said.
Lately, companies have moved toward the PPO (preferred provider organization), which still allows freedom of choice, but includes incentives for people to use a specific network of doctors. About 50 percent of the people insured are in PPOs.
Mack called this the "softest form of managed care" and said it saves only about 5 percent of the cost of traditional plans.
Other plans that have crept in as employers looked for ways to hold down insurance costs are health maintenance organizations and "point of service."
An HMO is a group of providers (doctors or clinics) in a network that becomes the primary or sole source of care for a group of insured people. To get to see one of the network doctors, you must be referred by a primary care physician, or a "gatekeeper."
Think of this gatekeeper as playing the role of a St. Peter; he or she decides if your reasons for needing this other doctor are valid. If the answer is yes, you can go and your insurance will cover the visit.
The HMO can have the greatest cost savings, maybe 10 to 20 percent over traditional health care, Mack said. The point of service system gives a person a choice of an HMO or other plan but has strong incentives to use the HMO.
None of the above likely is a surprise; most of us are covered by such a plan or know someone who is. What we don't know much about yet are "integrated systems of care," and we might be hearing of these soon.
In an integrated system, you get both the doctors and the facilities as part of the network and that group provides care for a fee.
Mack said such systems have potential for large savings, but the caveat is that they are monopolies and consumers need to ask who owns them and with what motives.
No matter what system is offered to a company, Mack said, there are some standard ways to evaluate it.
First, are the providers geographically close to the employees? There is a computer software program that allows a company to plug in employee home zip codes, provider locations, provider patient loads and the time it takes to drive there and then decide how convenient a provider is for a company's workers.
Other factors of evaluation, of course, include what benefits are offered, how helpful the provider is with claims and eligibility processing, telephone access and response, appointments and waiting time. And, finally, programs need to be looked at according to cost per employee per year, Mack said.
Also, he said, ask how the network assesses its physician members and "make them show it."
by CNB