“Managed Behavioral Care” Evolves
By Monica Oss Open Minds March 23, 2012
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The models for applying managed care principles to the financing and delivery of mental health and addiction treatment services have been through thirty years of evolution. There have been many incarnations of care management for behavioral health – from the initial models imbedded in staff model health plans to the evolution of the specialty managed behavioral health organizations (MBHOs).
One of the frequent questions I’m asked is, will managed behavioral health programs soon be extinct? With the advent of accountable care organizations (ACOs) and medical homes and the focus on integrated care, are those programs passé?
I would caution you not to follow the lead of Ezekiel J. Emanual and Jeffrey B. Liebman in their January 30, 2012 piece, The End of Health Insurance Companies, in The New York Times. It’s a little early to be discussing the end of managed behavioral health programs. Rather, we are on the verge of another major change in care management models for behavioral health.
In the short term, enrollments in traditional models of managed behavioral health are increasing and will continue to increase. Payers are both uncertain of the cost of parity and straining to control costs – and increasing their use of risk-based managed behavioral health models as a result. The largest increase in enrollment is in Medicaid – and this will likely continue over the next few years (see Half of States Expanding Medicaid Managed Care in 2012 all members).
However, the longer-term view is that care management models for behavioral health care will likely change. Payers are looking for strategies that will result in significant additional savings in the cost of health care. And, traditional managed care models – with reliance on low provider rates and rigorous prior authorization – just can’t produce those additional savings. Rather, payers are looking at alternatives for the high-cost consumer with chronic conditions who spend the majority of dollars (see Chronic Conditions: Making the Case for Ongoing Care premium members and Chronic Conditions Complex Needs – The Payer Focus all members).
From the payer perspective, this has split the management of their member populations into two groups – the 5% with multiple chronic conditions and 95% with less complex conditions (see The Marketing Challenge Of The 5% & The 95% all members). For the 95%, better medications, on-line services, and primary care-focused medical homes mean this population will no longer be included in “managed behavioral health care” enrollment.
“Managed behavioral health care” as we think of it will likely be limited to the high-cost 5% of the population. But the management model for that population will not be limited to managing behavioral health services – but rather expanded to include managing the overall “wellness” of that population – their chronic health conditions (both physical and mental) and their social support needs. The early prototypes for this new behavioral health care management model are the health homes in Rhode Island and Missouri (see Rhode Island Medicaid To Launch Mandatory Health Homes For SMI Population all members and Missouri Coalition of Community Mental Health Centers: Healthcare Home Implementation premium members). But time will tell if those models are successful and what evolution in the concept is needed.
The End of Health Insurance Companies
By Ezekiel J. Emanuel and Jeffrey B. Liebman January 30, 2012
Here’s a bold prediction for the new year. By 2020, the American health insurance industry will be extinct. Insurance companies will be replaced by accountable care organizations – groups of doctors, hospitals and other health care providers who come together to provide the full range of medical care for patients.
Already, most insurance companies barely function as insurers. Most non-elderly Americans – or 60 percent of Americans with employer-provided health insurance – work for companies that are self-insured. In these cases it is the employer, not the insurance company, that assumes most of the risk of paying for the medical care of employees and their families. All that insurance companies do is process billing claims.
For individuals and small businesses, health insurance companies usually do provide insurance; they take a premium and assume financial responsibility for paying the bills. But the amount of risk sharing that is accomplished is limited because the insurers charge premiums that vary, depending on the health of an individual or a group of employees, and use their data and market power to identify healthy people to cover and unhealthy people to exclude from coverage. (The health care law’s total ban on exclusions for pre-existing conditions will begin in 2014.)
A new system is on its way, one that will make insurance companies unnecessary.
Many health insurance companies also impose barriers – like requiring prior authorization for tests and treatments and denying payment for covered services, which forces patients to appeal – to discourage patients from using the medical services for which they are insured and to attempt to avoid paying for those services. While these barriers can reduce waste by preventing unnecessary care, they can also discourage patients from receiving care they need, as well as impose administrative burdens on doctors and patients.
But thanks to the accountable care organizations provided for by the health care reform act, a new system is on its way, one that will make insurance companies unnecessary. Accountable care organizations will increase coordination of patient’s care and shift the focus of medicine away from treating sickness and toward keeping people healthy.
Because most physicians and hospitals today are paid on a fee-for-service basis, medical care is organized around treating a specific episode of illness rather than the whole patient. This system encourages overtreatment and leads to mistakes and miscommunication when patients are sent between their primary care doctors, specialists and hospitals. Indeed, under today’s payment system, investments in providing better care are doubly penalized. If a hospital hires a nurse to follow up with patients after they are discharged in order to reduce readmissions – for example, to help patients with diabetes improve blood sugar control – it must pay for the nurse, which is typically not reimbursed by insurance companies or Medicare, and it loses revenue by preventing the readmission.
In contrast, accountable care organizations will typically be paid a fixed amount per patient, along with bonuses for achieving quality targets. The organizations will make money by keeping their patients healthy and out of the hospital and by avoiding unnecessary tests, drugs and procedures. Thus, they will actually have a financial incentive to hire that nurse for follow-ups.
In addition to providing better and more efficient care, A.C.O.’s will also make health insurers superfluous. Because they will each be responsible for a large group of patients (typically more than 15,000), they will pool the risk of patients who have higher-than-average costs with those with lower costs. And with the end of fee-for-service payments, insurance companies will no longer be needed to handle complicated billing and claims processing, nor will they need to be paid a fee for doing so. Payments can flow directly from an employer, Medicare or Medicaid to the accountable care organizations. A.C.O.’s will require enhanced information systems to track patients and figure out how to deliver more effective care, but this analytic capacity will be directed at improving health outcomes, not at imposing barriers to those seeking treatment.
A.C.O.’s are not simply a return to the health maintenance organizations of the 1990s. Although in both models patients are members of a provider network with a specific group of doctors and hospitals, and both are paid primarily per member rather than per procedure or test, there are big differences between them. H.M.O.’s were often large national corporations far removed from their members. In contrast, A.C.O.’s will consist of local health care providers working as a team to take care of patients who are likely to be members for years at a time. H.M.O.’s often cut costs not by keeping people healthy but by denying patients services and by forcing doctors and hospitals to take lower payments. In the 1990s, we lacked the information technology and proven models of integrated care delivery that we have now. These advances will allow A.C.O.’s to simultaneously improve health outcomes and reduce costs.
A final bonus of A.C.O.’s is that they will lead to a better form of competition in health care markets. Today, consumers have to choose among insurance plans with a bewildering array of copayments, deductibles and annual out of pocket maximums – choices that few of us are any good at making. In the A.C.O. model, consumers will choose a primary care physician and the team of doctors and hospitals that are in the same group. Choosing a doctor and provider group is a responsibility that consumers want to have and are likely to be much better at.
A few health insurers see this asteroid coming. Wellpoint, for example, bought the clinic operator CareMore for $800 million last summer to make the transition into the A.C.O. business. Others, like the Optum unit of UnitedHealth Group, are developing data analysis services to provide to future A.C.O.’s. If they don’t want to go the way of the dinosaurs, insurance companies will have to find a new business to be in, one that is useful in the new world of coordinated care.
Ezekiel J. Emanuel is a contributing opinion writer for The New York Times. Jeffrey B. Liebman is a professor of public policy at Harvard. Both were advisers in the Obama administration.