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Interaction Between Managed Care and
Prevention Resources: A Preliminary Analysis of Eight Models
By MICHAEL J. STOIL, Ph.D.
and GARY A. HILL, Ph.D.
© 1996 Conwal Incorporated
Casual observation suggests that many
managed health care providers are active in health promotion and preventive
care. Preliminary results from a survey in progress of prevention in the
managed care environment led to identification of eight distinct models of
interaction between managed care and prevention. These eight models differ on
the basis of the scope, duration, and locus of responsibility for performance
of prevention activities, and on the locus of responsibility for planning and
decision making in prevention.
Background: Hidden Prevention in
Managed Care
Mainstream health care in the U.S.
formerly centered on insuring individuals against the risk of serious illness.
Health care financing mechanisms were designed to respond to insurable events:
the relatively rare incidents of care that generate major cost for the patient.
As a result, private healthcare focused on use of the most costly, end-stage
interventions for all conditions (Warner 1996). Prevention and health promotion
existed under this system primarily as interventions supported by taxpayer
dollars and charitable contributions. Thus, school health, hygiene training
during military service, infectious disease screening and control,
environmental health regulation, and population-based health education provided
a core of "free" prevention services for most Americans, regardless of
insurance status.
During the 1980s, economic, political,
and social forces attacked this dichotomy between insurance-financed care of
medical conditions and preventive care financed by other sources. The cost of
medical treatment and the burden of using insured care to subsidize the
end-stage treatment of the uninsured began to price traditional health
insurance out of the range of affordability for most payers. This was
particularly true in mental health and addiction medicine, where private sector
costs rose an average of 20 percent per year between 1983 and 1988 (Freeman and
Trabin 1994). At the same time, the cost of reaching most Americans with
effective prevention for a growing set of behavioral health conditions began to
exceed the willingness of the public to support continual increases in taxes
and charitable contributions (Goplerud 1995).
Managed health care has been heralded as
a solution to these issues. The exciting promise of managed health care is that
medical practice will replace emphasis on the costly work of responding to
illness with emphasis on the cost efficient task of promoting wellness. This
promise is not always fulfilled, in part because managed care does not take
full advantage of risk reduction/health promotion resources already in the
community. In fact, managed care has developed a reputation of being obsessed
with reducing costs through denying treatment rather than promoting
health.
Casual observation offers evidence that
this reputation is undeserved. Managed care organizations participate in
community health fairs and annually mail millions of dollars of health
education materials to their catchment areas. In 1994, Dr. Helen Schauffler of
the School of Public Health at the University of California at Berkeley,
discovered health promotion screenings and health education opportunities were
widely available through the twenty managed care plans serving members of the
California Public Employees' Retirement System (CalPERS). In addition, a survey
of 27,000 plan members revealed a direct relationship between member
satisfaction with the managed care plans and access to preventive services,
even when relatively few individuals take advantage of the services (Schauffler
1995).
Despite this activity, even managed care
organizations often are quick to deny that they provide preventive care. This
is especially true in behavioral health, including mental health promotion and
prevention of addictive disorders, as we learned from the experience of
attempting to collect information from managed health care providers. In
November 1995, Conwal first attempted to survey health maintenance
organizations (HMO's) on their support for "substance abuse prevention." The
providers contacted declared that all substance abuse services were the
responsibility of a contractor designated by the HMO to provide behavioral
health services. Such specialty contractors are known in the industry as
"behavioral health carve-outs." The "carve-out" providers, in turn, denied
responsibility for activities other than capitated treatment of mental health
disorders and substance abuse disorders. Thus, very few of the entities
surveyed claimed to be providing preventive health services.
A very different picture emerged after we
changed the survey process to ask managed care organizations about support for
specific health promotion activities. Such queries often led to an interview
with a source of information outside of the medical department, such as a
member relations or community affairs office within the HMO. In forty percent
of 200 firms selected for contact, these sources reported offering at least
general health promotion activities, although individual companies often were
reluctant to provide details of what they perceived as a marketing advantage
over their competitors (see Figure 1).
Preliminary survey results revealed that
health promotion often is a hidden asset of the managed care environment.
Prevention and health promotion typically are separated from other health care
services and frequently provided outside the purview of clinical professionals.
The quality and outcomes of these services conducted in the managed care
environment represent one of the great unknowns of the transformation of the
American system of health care delivery.
Methodology of Development of the
Eight Models
The second objective of the Conwal survey
was identification of the organizational "home" of prevention and health
promotion within HMO's. In Conwal's preliminary survey of 200 HMOs, the
respondents were asked follow-up questions regarding the nature and
organization of prevention activities whenever they were willing to discuss
specific prevention or health promotion services. These follow-up questions
included the following:
- What specific prevention/behavioral
health promotion services are offered?
- Who provides the prevention/health
promotion services?
- Who decides which prevention services are
supported?
- Are there restrictions on who receives
the services (selected patients, all patients, community populations,
etc.)?
- How are prevention activities
funded?
- Who decides how long a specific service
will be offered?
Responses to these questions led to
identification of four "dimensions" which seemed to vary most extensively among
managed health care providers efforts to secure prevention and health promotion
services. These four are:
- Scope of Prevention
Services. In some situations, managed care
entities (or another decision maker) define the prevention/health promotion
services offered to a patient population, e.g., school-based education and
well-child health screenings. This effectively specifies a limited set of
activities. In other situations, a managed health care provider's acceptance of
generalized support for prevention has no initial limitation on the scope of
services to be provided but effectively translates into specific services over
time.
- Duration of Services. The managed
care entity's support for prevention is either defined by a specific duration
of commitment to a program (e.g., one year, one contract period, etc.) or
reflects an ongoing program of undefined duration.
- Locus of Responsibility for Providing
Prevention Services. Prevention/health promotion services can
be performed by a provider within the managed care network (e.g., a primary
care clinician or a specialized employee or division of the managed care
entity), by a non-network provider (e.g., community-based nonprofit, outside
contractor, government agency), or by a combination of the two.
- Responsibility for Prevention Planning
and Decision-making. Selection of the prevention and health
promotion services to be provided, the provider and setting of services, and
the clients to be helped can be made by the health care purchaser, by the
managed care organization, by community or governmental agencies, or by the
collective decision making of more than one of these groups.
In addition to the survey respondents,
presentations by managed care representatives at national forums also were
reviewed to classify more examples of managed care support for prevention along
these four "dimensions."
This process resulted in a taxonomy of
models describing patterns of managed healthcare involvement in prevention. As
shown in Figure 2, each of the eight models differs from the other seven along
at least one of the four "dimensions" described above. The models summarize
evolving and often poorly-defined real-world relationships between managed care
providers and prevention, as follows:
1) Revenue Center Model -
in which a buyer of health care services explicitly purchases prevention
interventions from the managed health care entity;
2) Prevention Subcontractor Model
- in which specific prevention services are contracted by the managed
health care provider to community resources;
3) Prevention "Carve-Out" Model
- in which the managed health care provider contributes to support of a
designated specialty provider for prevention services;
4) Community Patron Model -
in which prevention serves as a philanthropic commitment of either the managed
health care provider or its individual staff members;
5) Case Referral Model - in
which the managed health care provider refers patients to community behavioral
health resources without directly compensating the service
providers;
6) Strategic Investment Model
- in which the managed health care provider invests in prevention as a
long-term community or patient benefit;
7) Collaborative Model - in
which prevention represents full collaboration between the managed health care
provider and community-based organizations and/or public sector;
8) Integrated Services Model
- in which community-based prevention is an integral component of the
managed care provider.
At this preliminary stage of research,
the models are designed to be descriptive rather than analytical. For example,
because the survey did not reflect a representative sample of the managed
health care industry, it is impossible to determine whether a particular model
of prevention is more or less frequently employed than other models. Future
research may incorporate the eight models as a useful "short-hand" to describe
complex relationships between clinical services and prevention/ health
promotion services in the managed care environment.
A final caveat: No health care provider
consciously decides to adopt a "revenue center model" or any of the other seven
models of interaction with prevention. In fact, a single managed health care
provider may be involved in a variety of relationships with prevention that
reflect multiple models of interaction. The eight models describe recurring
patterns but do not limit health care providers to any one of these
patterns.
Descriptions of the Eight
Models
Within the restrictions outlined above,
the following can be considered a provisional "field guide" to the types of
relationships observed between managed health care providers and
prevention/health promotion services.
Revenue Center Model.
In the Revenue Center model, prevention
and health promotion services are performed because a purchaser explicitly pays
for them. This arrangement provides the managed care organization with a direct
financial incentive for offering the services. One example of this arrangement
identified through the survey was a firm that contracts directly with worksites
to provide fully-staffed employee assistance programs with prevention
components as part of the overall health care benefits package. Other examples
included several managed care entities that negotiated grants or cooperative
agreements with the government to conduct community health
screenings.
The Revenue Center model limits both the
scope and duration of prevention services to the terms negotiated by the
purchaser. For example, when the U.S. Centers for Disease Control and
Prevention negotiate a cooperative agreement with a managed care organization
to provide a demonstration of health care screenings, the agreement generally
defines the content and format of the screenings (including service delivery
settings and personnel), the population to be served (including target
numbers), and a fixed term for completion of the demonstration and preparation
of a final report. Little is left either to chance or to the discretion of the
individual clinician.
Under the Revenue Center model,
prevention services are provided by the managed care network because the
network must justify the funds spent on the services and must meet specified
standards of preventive care. These standards are at least tacitly approved by
the purchaser, so that the ultimate responsibility for prevention planning and
decision making lies outside of the managed care network.
The Revenue Center model is attractive
for outcome research. The managed care organization's unique ability to control
both the quality of service delivery and access to care makes this model useful
to investigators attempting to assess the effectiveness of specific health
promotion interventions.
Prevention Subcontractor Model.
This model describes a relationship in
which a managed health care provider purchases specific prevention services
through an agreement with a community-based organization. Unlike the Revenue
Center model, the prevention services are provided by an out-of-network
resource but are selected by the managed care network. In effect, use of this
model treats prevention and health promotion as the equivalent of other
out-of-network health care services. such as surgery or psychiatry.
Examples of this model identified through
the survey include HMO contracts with a nonprofit women's health organization
to offer post-operative emotional counseling and postpartum classes. In another
example, a managed care provider of Medicaid services contracted with a local
nonprofit group to provide outreach and health promotion to a local immigrant
community.
Specific contract terms varied widely. In
some cases, payments from a managed care firm to a prevention subcontractor
were use-sensitive (e.g., discounted fee-for-service). In other examples,
payments took the form of an annual retainer that allowed all of the managed
care provider's patients to access the prevention services.
As with other contracts for
out-of-network services, managed care organizations in the Prevention
Subcontractor model retain gatekeeper and quality controls; access to services
by patients may be capitated or otherwise controlled by the managed care
provider. The services to be compensated by the managed care organization
usually are specified in the contract; unless a renewal is negotiated,
prevention services end at the conclusion of the agreement.
The Prevention Subcontractor model allows
the managed health care organization to retain responsibility for most
decisions affecting its support for prevention services for its patients. The
managed care organization specifies the interventions to be provided, the
settings to be used, and the populations to be served. Renewal establishes a
potential window for quality review, changes in providers, and even elimination
of the services. The managed care organization also is able to use its patient
data base to monitor the outcome of the interventions. Nevertheless, the
community-based organization retains significant autonomy and can refuse to
renew a contractual relationship that either fails to provide fair compensation
or is too restrictive.
Prevention "Carve-out" Model.
In this model, preventive interventions
are provided by an organization that functions like a prevention "carve-out.".
Unlike the Prevention Subcontractor Model, a health care purchaser—a
government agency or business health care buying cooperative—selects the
prevention "carve-out" and negotiates the scope of services. The primary health
care organizations' relationship with the "carve-out" may be limited to a
mandated financial contribution to prevention services. The "carve-out" also
may be subsidized by funds in addition to managed care contributions, thus
further reducing the potential influence of the primary managed care
organizations on prevention services.
In one example of the Prevention
Carve-Out Model, the dominant business health purchasing coalition in a
Midwestern state requires all primary care providers interested in serving
their employees to contribute a set fee per covered life to a behavioral health
firm. The behavioral health firm provides worksite prevention services for all
coalition members, with the quality and content of the interventions chosen by
the health care purchasing coalition. Other examples of the model were
legislated by one state's Medicaid reform; every managed care organization that
received monopoly responsibility for Medicaid clinical services in a region of
the state was required to make a per capita contribution to a nonprofit agency
responsible for behavioral health promotion in the region.
The public or private sector health
purchasers retain effective quality control over prevention services performed
in the Prevention Carve-Out model by having periodic review and renewal of the
carve-out relationship. For the managed care organization, the model transforms
prevention services into merely one more required cost of doing business rather
than an intrinsic part of the network's health care continuum.
Case Referral Model.
In this model, the managed health care
organization has no contractual relationship with the prevention services.
Instead, the managed health care organization has a policy of referring
patients, as appropriate, to the community-based groups for specific preventive
interventions. The primary care provider may advise community-based groups of
the intent to refer patients or may request permission to refer patients to the
group. Providers may even offer a donation to community-based groups selected
for referral, but there is no explicit quid pro quo involved and groups
receiving such donations have no opportunity to negotiate.
The Conwal survey identified an HMO that
referred patients that may benefit from parenting education to free classes
provided by Child and Family Services, funded as a community service by United
Way and local government. In another example of the model, a behavioral health
carve-out referred patients who did not qualify for inpatient care to self-pay
outpatient services operated by affiliates of the National Council on Alcohol
and Other Drug Dependency (NCADD). The carve-out offered a standard $1,000
annual donation to each NCADD affiliate in its service area, regardless of
whether any patients used the community-subsidized services.
For the Case Referral Model to work, the
managed care provider only is required to identify and track groups that
perform specific preventive services that may be useful to patients. Even this
limited function may be ineffective: follow-up from the Conwal survey found
that an HMO referred patients to "free" adolescent substance abuse prevention
classes provided by a community group which had not in fact offered the classes
for nearly five years. This example underscored that the Case Referral Model
provides no gatekeeper control or quality oversight for prevention services and
relies on the serendipitous availability of resources within the community for
determining the scope of prevention interventions.
Community Patron Model.
In this model, individuals employed by a
managed health care provider donate time and skills to community-based
prevention services as they would to any other community project, e.g., Girl
Scouts, Little League, church group. The managed care organization also may
provide support in the form of employee comp time, access to underutilized
resources (e.g., photocopying, loans of a conference room for meetings), travel
expenses, or a philanthropic grant from affiliated charitable foundation. In
either case, the relationship does not distinguish managed health care
providers from any other type of business that supports community prevention as
an acceptable charity.
Examples of the Community Patron Model
identified in the survey included:
- The headquarters office of a national
managed care organization that donates charitable grants to nonprofit community
groups in the host city funded the local community prevention coalition and
another charity involved in adolescent drug prevention activities.
- A CEO of a managed care firm serves as
the volunteer chairman of a city sub-stance abuse prevention partnership; the
firm donates his time and travel expenses to attend two annual national
meetings of community prevention partnerships.
- The hospital component of an HMO donates
occasional use of its auditorium for large group parent training
sessions.
The Community Patron model provides the
managed care firm with potential influence over the prevention resources
available within a community, but it does not ensure that the resources meet
the needs of the patients. In fact, the managed care entity is not inherently
more influential than any other large source of donations. There is no
certainty of either the quality or scope of services provided. Even the
duration of the managed health care organization's involvement in
community-based prevention depends primarily on personal commitment of
individual staff members or on the changing preferences of corporate
philanthropy.
Strategic Investment
Model.
In this model, the managed care organization's
investment in prevention for covered lives or its investment in community-based
prevention is based on a long-term corporate commitment in population health.
The managed care entity does not anticipate either a direct short-term
financial return or a specific short-term improvement in the health of specific
patients. Instead, activities are selected because they are assumed to
contribute to long-range goals for the company or the host
community.
Examples of the Strategic Investment
Model identified through the HMO survey included distribution of a periodic
health education newsletter to patients or to the catchment area, leadership in
an area-wide campaign to promote helmet use for bicyclists, and organization of
worksite health fairs.
The Strategic Investment Model is
characterized by support for a broad, potentially unlimited range of prevention
and health promotion activities as part of an ongoing effort of indeterminate
duration. The managed health care organization is responsible for both the
performance and the planning for prevention services. How-ever, the prevention
and health promotion services may be directed by administrative offices
responsible for long-term corporate development (e.g., "member services,"
"public relations," "public affairs," or sales/marketing) rather than by the
medical department. As a result, activities conducted in the Strategic
Investment Model may be selected for visibility rather than explicitly chosen
for effectiveness.
Collaborative Model. In a small
number of examples, prevention decisions are made by a consensus between
representatives of the managed health care environment and representatives of
nonprofit groups or government. In this model, all elements of community
prevention and health promotion may be negotiated including cost-sharing,
leadership responsibilities, the selection of specific interventions,
populations to be served, etc.
In one state, HMO's were recruited into a
coordinated anti-smoking campaign that included health departments and
community-based organizations. Another state mandates regional prevention
coordination and planning between representatives of the managed health care
entities with patients in the region and the local health
departments.
In theory, the Collaborative Model
promotes a comprehensive prevention agenda, with no clear limits on either the
scope or duration of activities. There is at least potential to integrate
public and private funding for prevention by merging government funds with
financial contributions from the managed care environment. In operation,
however, collaboration often resulted only in development of a long-range plan
and implementation of a "project of the year" chosen largely for its public
relations value. The few examples of this model suffered from an unwieldy
decision-making process, in part because the individuals involved lacked the
authority to commit their organizations to a course of action.
Integrated Services Model.
Although similar to the Collaborative
Model, the Integrated Services Model places the decision-making process for
prevention within the network of a managed care environment. In effect, the
model provides individual and population-based prevention services with
co-equal status to clinical services.
Only two examples of the model have been
identified. In one example, the acquisition of a nonprofit network of
behavioral health treatment and prevention providers by a full-service managed
care entity resulted in the organization operating a seven-community prevention
coalition funded in part by federal government grants. The newly-enlarged
managed care organization chose to continue providing the organizational
framework for the prevention coalition and has since moved to integrate
prevention planning into its existing clinical operations. The other example of
the Integrated Services Model is a prevention coalition staffed and largely
directed by the community/civic affairs division of a hospital-based managed
care network.
In both examples of the Integrated
Services Model, transformation of the clinical services of the managed care
organization through the development of staff competency in prevention has
become a key component of the organization's health promotion agenda. Other
prevention and health promotion activities, however, may be conducted through
shared responsibilities between the managed health care environment and
non-network providers. The long-term goal is to recruit community resources to
serve as a full partner in comprehensive, population-based prevention and
health promotion, with decision-making dominated by the health care system
because of its technical expertise in the selection of effective
interventions.
Conclusion
The Integrated
Services Model and the Collaborative Model would appear to approach acceptance
by the managed care environment of the traditional role of the public health
system. They have the potential to foster a comprehensive health care agenda
that integrates professional and community resources, as well as clinical and
preventive services, under the guidance of health professionals.
The other models of interaction between
the managed care environment and prevention services all involve some
compromises. In four of the models (Revenue Center, Prevention Carve-Out, Case
Referral, and Community Patron), the responsibility for determining the
activities to be performed and the populations to be served lies outside of the
managed care environment. Four of the models (Revenue Center, Prevention
Subcontractor, Prevention Carve-Out, and Community Patron) limit the scope of
support to preventive interventions to a specific period of time. These
limitations may not harm the goal of long-term prevention, but they maintain a
clear separation between clinical procedures under managed care and preventive
interventions. This separation must be bridged if managed care is to live up to
its promise of changing the practice of medicine from responding to illness to
promoting wellness.
Why do managed care entities permit the
maintenance of the separation between treatment and preventive interventions?
One reason is that managed care firms compete primarily by offering treatment
resources. A managed care network fully staffed with social workers and
lifestyle specialists but with no family practice doctors is not viable; a
network that offers family practice doctors without social workers and
lifestyle specialists is feasible. Managed care firms also may be uncomfortable
with "soft" outcome measures for prevention and the absence of behavioral
health promotion protocols. In addition, the firms may be inexperienced in
working with the populations at-risk who are appropriate for targeted
preventive interventions in behavioral health. As these issues change over
time, managed health care firms may face greater internal and external pressure
to move toward integration of preventive and clinical care.
References
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Goplerud, E. (1995) Managed care for
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Schauffler, H. H. (1995) Consumerism in
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Health Conference of the Park Nicollet Foundation, September 22, Bloomington,
Minnesota.
Warner, K. E. (1996) All that is gold
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