MCOs Provide Same Level of Care Quality As Fee-For-Service Payers, UCSF Study Finds

Managed care companies provide "virtually the same quality of care" as traditional fee-for-services plans, according to a study presented last week at a conference on the future of managed care held at the Robert Wood Johnson Foundation headquarters, CongressDaily reports. After conducting a literature review of more than 70 studies, University of California-San Francisco researchers Harold Luft and Robert Miller found that while managed care plans are better at providing preventive care services and curbing use of expensive medical services, MCOs "do considerably worse" in patient satisfaction and access to care. The Luft/Miller study also found that high managed care penetration results in lower costs for both managed care and fee-for-service plans in that area, but the uninsured in those regions have greater difficulty accessing care than the uninsured in areas with lower managed care penetration.

Foregoing Cost Containment Mechanisms
In addition, managed care is "abandoning" some of its hallmark management techniques, including requiring pre-authorization and referrals for care, according to Paul Ginsburg of the Center for Studying Health System Change. Speaking at the conference, Ginsburg said that such changes reduce administrative costs and strengthen relationships with patients and providers but also "erod[e] the ability to control utilization." Ginsburg also said that hospitals' and physicians' demand for higher reimbursements, coupled with the MCOs' emphasis on "profits over market share," have resulted in the "largest premium increases since the early 1990s." He added that employers are likely to shift the cost of higher premiums to employees through "tiered networks" that offer workers the choice to pay more for a broader selection of providers.

Medicare Managed Care
Also speaking at the conference, former HCFA Administrator Nancy-Ann DeParle discussed problems with Medicare+Choice, saying that HMOs' pullouts in certain regions were "entirely predictable." She said that in hindsight, Medicare+Choice's problems should not have been so surprising, given that the primary goal of the 1997 Balanced Budget Act, which create Medicare+Choice, "was saving money and that was never really consistent with Medicare+Choice's goals of expanding access to managed care plans" (Rovner, CongressDaily, 5/18).