Hostname: page-component-848d4c4894-xfwgj Total loading time: 0 Render date: 2024-06-16T16:46:52.955Z Has data issue: false hasContentIssue false
  • English
  • Français

Managed Care and Public Health: Conflict and Collaboration

Published online by Cambridge University Press:  01 January 2021

Sara Rosenbaum  and
Brian Kamoie
Get access Rights & Permissions [Opens in a new window]

Extract

This article reviews the relationship between managed care and public health. Managed care, with its seemingly infinite structural and organizational variation, dominates the modern American health-care system for the non-elderly U.S. population. Through its emphasis on standarhzed practice norms and performance measurement, coupled with industrial purchasing techniques, prepayment, risk downstreaming, and incentives-based compensation, managed care has the potential to exert considerable influence over the manner in which the health-care system is organized and functions. Given the degree to which the attainment of the basic public health goal of protecting the public against population health threats for which there are known and effective medical interventions depends on the successful interaction between public health policy and the medical care system, the importance of a viable working relationship between public health and managed care is difficult to overstate.

The potential for conflict between public health and medical care is nothing new; indeed, delineating the boundaries of public health to shape and influence medical practice has occupied the energies of policymakers and the medical industry for well over a century.

Type
Article
Information
Journal of Law, Medicine & Ethics , Volume 30 , Issue 2 , Summer 2002 , pp. 191 - 200
Copyright
Copyright © American Society of Law, Medicine and Ethics 2002

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

See, e.g., Gostin, L., Public Health Law: Power, Duty, Restraint (California: University of California Press, 2000): at 11;Google Scholar
Starr, Paul, The Social Transformation of American Medicine (New York: Basic Books, 1982): at 180–97.Google Scholar
Perhaps the single finest exploration of the conventions of commercial insurance and their implications for public policy in health care is Deborah Stone's seminal article, “The Struggle for the Soul of Health Insurance,” Journal of Health Politics, Policy and Law, 18 (1993): 287–317.CrossRefGoogle Scholar
By “risk avoidance,” we mean managed care's delineation of covered treatment and the extensive limitations placed on coverage to minimize exposure to unanticipated financial risk. Managed care products, like conventional insurance, typically limit coverage for services not designed to return an individual to prior normal functioning (e.g., treatment for chronic illnesses). As a result of these coverage limitations and the contractual shifting of financial risk to providers, managed care injects conventional insurance principles directly into medical practice.Google Scholar
This background and overview is adapted from Rosenblatt, R. Law, S. Rosenbaum, S., Law and the American Health Care System (New York: Foundation Press, 1997): at 543–73.Google Scholar
Van Vector v. Blue Cross Ass'n, 365 N.E.2d 638, 645 (Ill. App. Ct. 1977).Google Scholar
Weiner, J. de Lissovoy, G., “Razing a Tower of Babel: A Taxonomy for Managed Care and Health Insurance Plans,” Journal of Health Politics, Policy and Law, 18 (1993): 75–103, at 73–77.CrossRefGoogle Scholar
Dudley, R.A. Luft, H., “Managed Care in Transition,” N. Engl. J. Med., 344 (2001): 1087–92, at 1087.CrossRefGoogle Scholar
Levitt, L.et al., Kaiser Family Foundation and Health Research and Educational Trust, Employer Health Benefits: 2000 Annual Survey (Chicago: Kaiser Family Foundation and Health Research and Educational Trust, 2000): At 55.Google Scholar
Rosenbaum, S.et al., Policy Brief #2: State Benefit Design Choices under SCHIP — Implications for Pediatric Health Care (Washington, D.C.: George Washington University School of Public Health and Health Services, Center for Health Services Research and Policy, 2001), available at <http://www.gwhealthpolicy.org/downloads/issue_brief_2.pdf>;.Google Scholar
Pernice, C.et al., Charting SCHIP: Report of the Second National Survey of the State Children's Health Insurance Program (Washington, D.C.: National Academy for State Health Policy, 2001).Google Scholar
Rosenblatt, Law, Rosenbaum, , supra note 4, at 550, 656.Google Scholar
Miller, R.H. Luft, H., “Managed Care Plan Performance Since 1980: A Literature Analysis,” JAMA, 271, no. 19 (1994): 1512–19, at 1512.Google Scholar
See also Hacker, J. Marmor, T., “How Not to Think About ‘Managed Care,’” University of Michigan Journal of Law Reform, 32 (Summer, 1999): 661–84, at 661.Google Scholar
(arguing that the application of “managed care” to many diverse trends in the organization and financing of health care is a barrier to meaningful analysis).Google Scholar
For a more detailed description of the structure and organization of various types of managed care organizations, see Rosenblatt, Law, Rosenbaum, , supra note 4, at 551–73.Google Scholar
Weiner, de Lissovoy, , supra note 6, at 85–86.CrossRefGoogle Scholar
See Rosenblatt, Law, Rosenbaum, , supra note 4, at 551–73.Google Scholar
A very small amount of managed care enrollment can be attributed to direct purchase memberships held by persons who have individual coverage.Google Scholar
Rosenbaum, S.et al., Negotiating the New Health System: A Nationwide Study of Medicaid Managed Care Contracts, 3rd ed. (Washington, D.C.: George Washington University School of Public Health and Health Services, Center for Health Services Research and Policy, 1999), available at <http://www.gwu.edu/∼chsrp/contracts.html>; Boyd v. Albert Einstein Medical Ctr., 547 A.2d 1229 (Pa. Super. Ct. 1988).Google Scholar
See Pegram v. Herdrich, 530 U.S.211 (2000);Google Scholar
Pappas v. Asbel, 768 A.2d 1089 (Pa. 2001);Google Scholar
Boyd v. Albert Einstein Medical Ctr., 547 A.2d 1229 (Pa. Super. Ct. 1988).Google Scholar
Rosenbaum, et al., supra note 16, vol. 2, at 1–2.Google Scholar
A typical private insurance contract will cover specified forms of preventive services, such as certain immunizations, well baby and well child care, and periodic mammograms. But generalized assessments of health and well-being and preventive screening interventions to detect the presence of a wide range of conditions frequently are excluded or else not identified as included.Google Scholar
The growth in public acceptance of and pressure to encourage persons with disabilities to work as a result of the Americans with Disabilities Act and changing social norms has created new challenges for conventional employment-based insurance design. However, federal and state public policy efforts to make conventional insurance more responsive to persons with greater health needs has yielded little. See text accompanying note 21 and note 21, infra.Google Scholar
The Health Insurance Portability and Accountability Act (HIPAA) and the Mental Health Parity Act are two examples of such legislation. See HIPAA, Pub. L. No. 104-191 (codified in scattered sections of 42 U.S.C.);Google Scholar
Mental Health Parity Act, 42 U.S.C. § 300gg-5 (2001).HIPAA sets minimal restrictions on the use of preexisting condition exclusions and waiting periods. Under HIPAA, the maximum length of such an exclusion is 12 months after the date the individual first enrolls in a new group plan. Second, the preexisting condition exclusion cannot apply to a condition for which the person received no services within the 6-month period prior to enrollment. Third, HIPAA can allow an individual to completely bypass any preexisting condition exclusion by providing evidence of 12 months of prior group or individual health coverage, including federal health coverage such as Medicaid or Medicare.Google Scholar
See 42 U.S.C. § 300gg (2001). Despite these protections, however, enforcement of these limitations is difficult. The Mental Health Parity Act prohibits only the grossest of all limits, annual and lifetime dollar caps, and leaves untouched diagnostically based variations in treatment.Google Scholar
See 42 U.S.C. §§ 300gg-5(a) and (b) (2001).Google Scholar
Segal, D., “Doctors Who Dodge a Managed Care Stampede,” Washington Post, May 20, 1996, Health Section, at 5.Google Scholar
One notable exception is the state of Washington, which requires MCOs to include alternative medicine providers (e.g., acupuncturists, massage therapists, naturopaths, and chiropractors) in their network. See Washington Physicians Ass'n v. Gregoire, 147 F.3d 1039 (9th Cir. 1998).Google Scholar
See Heffler, S.et al., “Health Spending Growth Up in 1999; Faster Growth Expected in the Future,” Health Affairs, 20, no. 2 (2001): 193–203, at 193.CrossRefGoogle Scholar
See Miller, Luft, , supra note 11, at 1516, 1994; Wagner, E. Bledsoe, T., “The Rand Health Insurance Experiment and HMOs,” Medical Care, 28, no. 3, (1990): 191–200. At least one scholar, however, has questioned the general consensus. See Sullivan, K., “On the ‘Efficiency’ of Managed Care Plans,” Health Affairs, 19, no. 4 (2001): 139–48 (arguing that the evidence supporting the claim that managed care controls costs is inconclusive).Google Scholar
See Robinson, J., “Physician Organization in California: Crisis and Opportunity,” Health Affairs, 20, no. 4 (2001): 81–96;. Robinson, J., “The Future of Managed Care Organization,” Health Affairs, 18, no. 2 (1999): 7–24; Pegram v. Herdrich, 530 U.S. 211 (2000).CrossRefGoogle Scholar
To encourage a reduction in hospital days for Medicare patients, Humana Health Plans' contracts with hospitals include a bonus level for every 100 patient days under a specified utilization target (contracts on file with authors).Google Scholar
Pegram v. Herdrich, 530 U.S. 211 (2000).Google Scholar
Rosenblatt, Law, Rosenbaum, , supra note 4, at 565.Google Scholar
Miller, Luft, , supra note 11, at 1512.Google Scholar
Dudley, Luft, , supra note 7, at 1087–88.Google Scholar
Wennberg, J., “Dealing with Medical Practice Variations: A Proposal for Action,” Health Affairs, 3, no. 2 (1984): 6–32, at 6, 9–10.CrossRefGoogle Scholar
Our use of “public health” in this article encompasses both traditional definitions of public health (collective actions to assure the conditions that allow people to be healthy) and other aspects of public health that include the delivery of health care by public health departments as safety net providers.Google Scholar
Institute of Medicine, The Future of Public Health Washington, D.C.: National Academy Press, 1988): at 1–18.Google Scholar
For a detailed discussion of the role of managed care and Medicaid in the larger context of “welfare medicine” (poor people and the health-care professionals and institutions that serve them), see Watson, S., “Commercialization of Medicaid,” St. Louis Law Journal, 45 (Winter 2001): 53–78.Google Scholar
See Gostin, , supra note 1, at 119.Google Scholar
Jones v. Kodak Medical Assistance Plan, 169 F.3d 1287 (10th Cir. 1999).Google Scholar
Eddy, D., “Benefit Language: Criteria That Will Improve Quality While Reducing Costs,” JAMA, 275 (1996): 650–57, at 650–651.CrossRefGoogle Scholar
See Epstein, R., “Medical Malpractice: The Case for Contract,” American Bar Foundation Research Journal (1976): 87–149;. Havighurst, C., “Altering the Applicable Standard of Care,” Law & Contemporary Problems, 49 (Spring 1986): 265–75;. Havighurst, C., “Prospective Self-Denial: Can Consumers Contract Today to Accept Health Care Rationing Tomorrow?,” University of Pennsylvania Law Review, 140 (1992): 1755–808;. Morreim, E.H., “The Futility of Medical Necessity Regulation,” Regulation (Summer 2001): 22–26.Google Scholar
Jones v. Kodak Medical Assistance Plan, 169 F.3d 1287 (10th Cir. 1999).Google Scholar
See id. at 1292. The record in the case showed that the plan's own administrator questioned the quality of the treatment that the plan was prepared to permit in light of the facts in the plaintiff's case.Google Scholar
For additional discussion of the role of practice guidelines and other standards of care in procedural protections for health-care consumers, see Kinney, E.D., Protecting American Health Care Consumers (Durham, North Carolina: Duke University Press, 2002).CrossRefGoogle Scholar
Institute of Medicine, supra note 34, at 1–18.Google Scholar
See, e.g., Centers for Disease Control and Prevention, 1998 Guidelines for the Treatment of Sexually Transmitted Diseases (January 23, 1998); Prevention and Control of Influenza: Recommendations of the Advisory Committee on Immunization Practices (May 1, 1998); Treatment of Tuberculosis and Tuberculosis Infection in Adults and Children (January 1, 1994); The Prevention and Treatment of Complications of Diabetes Mellitus: A Guide for Primary Care Practitioners (January 1, 1991). The guidelines are available at <http://aepo-xdv-www.epo.cdc.gov/wonder/PrevGuid/titles_a.shtml> (last visited May 1, 2002).+(last+visited+May+1,+2002).>Google Scholar
See Lazorko v. Pennsylvania Hosp., 237 F.3d 242 (3d Cir. 2000); Bauman v. U.S. Healthcare (In re U.S. Healthcare), 193 F.3d 151 (3d Cir. 1999), cert. denied, 530 U.S. 1242 (2000); Moscovitch v. Danbury Hosp., 25 F. Supp. 2d 74 (D. Conn. 1998); Shannon v. McNulty, 718 A.2d 828, 831 (Pa. Super. Ct. 1998).Google Scholar
See Lazorko v. Pennsylvania Hosp., 237 F.3d 242 (3d Cir. 2000). After his wife committed suicide, Lazorko brought suit in state court against his wife's physician and HMO. After being discharged from a 6-month hospitalization following a prior suicide attempt, the wife requested re-hospitalization. 237 F.3d at 236. Her physician denied the request, and Lazorko alleged that the HMO was directly and vicariously liable for his wife's death because the HMO imposed financial disincentives on the physician that discouraged him from recommitting her for additional treatment. Id. Despite the HMO's argument that the refusal to hospitalize the wife was a denial of benefits (and, therefore, preempted by ERISA), the court allowed the suit to proceed as a liability action for substandard care. See Id. at 249–50.Google Scholar
A detailed discussion of malpractice liability for MCOs and providers rendering substandard care under MCO treatment guidelines is beyond the scope of this article, which focuses on the implication of the use of such guidelines for the interaction between managed care and public health.Google Scholar
Rosenbaum, et al., supra note 16, vol. 1, at 14, vol. 2, at 2–808.Google Scholar
Brown, E.R.et al., Delivery of Sexually Transmitted Disease Services in Medicaid Managed Care (Los Angeles: UCLA Center for Health Policy Research, 2000).Google Scholar
Id. at v–vi.Google Scholar
Id. at vi–vii.Google Scholar
Id. at vi.Google Scholar
Institute of Medicine, Clinical Practice Guidelines: Directions for a New Program (Washington, D.C., 1990): At 8.Google Scholar
Id. at 12.Google Scholar
Id.Google Scholar
Bipartisan Patient Protection Act, S. 1052 and H.R. 2563, 107th Cong. (1st Sess. 2001).Google Scholar
See Gostin, , supra note 1, at 113. In addition, the HIPAA privacy regulation permits the disclosure of individually identifiable health information without patient consent for public health activities mandated by law, such as the collection of information to prevent or control disease or to conduct public health surveillance. See 45 C.F.R. § 164.512(b), 65 Fed. Reg. 82,813–14 (December 28, 2000). Therefore, the privacy regulation does not impede public health agencies' access to data for these purposes. On the other hand, when providing direct patient care, public health providers must comply with the rule's consent and security standards for activities that fall outside public health activities mandated by law. See generally 45 C.F.R. § 160.103, 65 Fed. Reg. 82,799 (December 28, 2000).Google Scholar
See Bragdon v. Abbott, 524 U.S. 624, 649 (1998) (Kennedy, J., writing for the majority, noted, “the views of public health authorities, such as the U.S. Public Health Service, CDC, and the National Institutes of Health, are of special weight and authority…. A health care professional who disagrees with the prevailing medical consensus may refute it by citing a credible scientific basis for deviating from the accepted norm.”).Google Scholar
Rosenbaum, S.et al., “Who Should Determine When Health Care Is Medically Necessary?,” N. Engl. J. Med., 340 (1999): 229–33.CrossRefGoogle Scholar