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Insurers Drop Utilization Review, Adopt Medical Management To Moderate Costs, Enhance Quality Of Care, Health Affairs Analysis Says

Series Explores New Developments In Cost Control, Quality Improvement
As Health Plans Learn Lessons From Managed Care Battles Of The 1990s

BETHESDA, MD — Chastened by the consumer and physician backlash against utilization management during the 1990s, health insurance plans are exploring new techniques focused on behavior change among high-cost enrollees to combat recent increases in health care spending, according to a new article published today by Health Affairs and the California HealthCare Foundation (CHCF).

James C. Robinson, a professor of health economics at the University of California, Berkeley, and Jill M. Yegian, director of health insurance at CHCF, profile “medical management” activities at the nation's two largest health plans, UnitedHealth Group and WellPoint Health Networks, as well as at an independent medical management firm, Active Health Management.

Instead of the service limitations that triggered anti-managed-care campaigns during the 1990s, the new style of medical management is “designed to minimize abrasion with patients and physicians” by encouraging “behavior change among patients, through better prevention and self-management for chronic conditions, with only cautious and information-oriented outreach to physicians,” the authors say.

Relying on claims and other data to identify enrollees with chronic conditions, the three firms are seeking to prevent acute episodes of care and ensure that the enrollees have adequate information to make good decisions about their own care.

The article is one of seven published by Health Affairs today that focus on benefit design and medical management in health insurance. The articles grew out of a November 2003 roundtable sponsored by Health Affairs and CHCF that brought together thirty leaders from insurance, clinical, purchaser, consumer, and regulatory entities to discuss how benefit design and medical management are influencing health care delivery.

In a second article, Alan Garber, a professor of medicine and director of the Stanford University Center for Health Policy, explores insurers’ and government programs’ use of cost-effectiveness and evidence evaluation in determining coverage policy.

Although Garber writes that “cost-effectiveness analysis has long been the preferred method to explicitly address value in medical care,” health insurers do not widely apply it. In a 2001 survey, 90 percent of plans said they consider costs when determining whether to cover a product or procedure. Yet 93 percent of plans said they will cover a more effective intervention even if it is more costly.

Garber writes that the erosion of commercial health insurance and the growing burden of public health insurance programs may transform cost-effectiveness analysis “from an academic curiosity to an essential tool for health care decision making.”

Garber’s article was supported by the Robert Wood Johnson Foundation.

Accompanying the Robinson/Yegian and Garber papers are two perspectives. Victor G. Villagra, president of Health and Technology Vector Inc. in Farmington, Connecticut, writes that health insurers need to incorporate disease management with primary care to improve the quality of chronic care. Marjorie Ginsburg, executive director of Sacramento HealthCare Decisions, a consumer advocacy organization in California, writes that consumers may not be receptive to the use of cost-effectiveness analysis in coverage decisions, but may accept it if safeguards are in place and if it’s used with patients’ interests, not health plan interests, in mind. Finally, Yegian summarizes the roundtable.

All five of the pieces are available on the Health Affairs Web site via the following links:

Robinson/Yegian article: content.healthaffairs.org/cgi/content/abstract/hlthaff.w4.269.

Garber’s article: content.healthaffairs.org/cgi/content/abstract/hlthaff.w4.284.

Yegian’s summary: content.healthaffairs.org/cgi/content/abstract/hlthaff.w4.300.

Villagra’s perspective: content.healthaffairs.org/cgi/content/abstract/hlthaff.w4.281.

Ginsburg’s perspective: content.healthaffairs.org/cgi/content/abstract/hlthaff.w4.297.

Health Affairs, published by Project HOPE, is a bimonthly multidisciplinary journal devoted to publishing the leading edge in health policy thought and research. Additional peer-reviewed papers are published weekly online as Health Affairs Web Exclusives at www.healthaffairs.org. Health Affairs Web Exclusives are supported in part by a grant from the Commonwealth Fund.

The California HealthCare Foundation, (CHCF) based in Oakland, is an independent philanthropy committed to improving California’s health care delivery and financing systems. Visit www.chcf.org for more information.

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©2004 Project HOPE–The People-to-People Health Foundation, Inc.