Letter to the Editor by Abendroth on "Clueless in the Land of Managed Care"

Managed Care

May 4, 1999

response by Susan Abendroth to Clueless in the Land of Managed Care, by Anonymous Physician (January 6, 1997)
with reply by Megan Kator
with response by Abendroth

Dear Editor:

Having read both the article, "Clueless in the Land of Managed Care" and the response from a nurse familiar with Managed Care, I came to this conclusion: Managed Care continues to be poorly understood by those who should know more. I was bothered by assertions in the article which were misleading by oversimplification or were just incorrect.

Here's but one example: The author states: "...In a capitated system, an institution is given an arbitrary monthly revenue for each patient, and costs for additional labs, referrals, and treatments all come directly from the institution's kitty..." The reality is that the amount paid to a physician in a capitated arrangement is based on demographic analysis of the group being covered and the costs that are anticipated in providing needed health care for that group. These cost projections are based on national standards of care developed by medical practioners and researchers. Additionally, the amount of the capitation is negotiated by the provider (or salaried physician's employer) and the managed care organization. While it's true that lab tests etc. are paid for out of the capitation, it is also true that capitation is paid whether care is required or not.

Some individual patients may require more than the "per patient payment" but many require no care at all during the payment period and therefore cost "the kitty" nothing. Additionally, the amount of the capitation is negotiated by the provider (or salaried physician's employer) and the managed care organization. While a provider may feel inadequately paid, there are opportunities and mechanisms available to them to address reimbursement issues.

It's understandable that cost containment mechanisms like capitation are unpalatable to those who previously didn't really have to consider the cost of the care provided. However, but the nation can no longer afford the unrestrained medical inflation that we experienced under the old system. It's unpalatable to me that about 40 million of my fellow citizens have little or no access to health care. If we're to address their needs at all, we're going to have to accept that there isn't enough money to go around. If we're going to ration health care services (as we already do) I'd prefer that it be done scientifically and fairly rather than simply based on the ability of an individual to pay. Managed care came about because providers were doing a poor job of managing the cost of care themselves

I challenge people who criticize managed care to become informed critics and look at the issues from more than their own personal perspective. I agree with the author that a for-profit system has many flaws. Personally, I'd like to see a single payor, government controlled system in the U.S. similar to the system in Canada. While there are problems with that approach, Canadian citizens all have access to basic health care and Canada pays less for health care than the U.S. does. They also provide better quality health care than in the U.S. according to well accepted quality measures.

I make these remarks from my perspective as a RN who has provided direct patient care for fifteen years and has been responsible for Utilization Management and Quality Improvement for two different commercial HMOs for six years.

Susan Abendroth, BA, RN
Dayton, OH