Managed Care - November 2008 - (Page 17)

COMPENSATION MONITOR Is managed care losing its coercive power? he relationship between managed care and physician financial incentives to reduce care has declined over time, a study in the American Journal of Managed Care suggests. In 2000–2001, both capitated and nonlaminated managed care significantly increased physician incentives to reduce care, but that changed by 2004–2005. Capitated managed care, rather than noncapitated managed care, had the strongest incentives to reduce care, but these effects weakened in 2004–2005, compared to 2000–2001. Researchers at the Health Economics Research Group at the University of Miami and the departments of economics and preventive medicine at Stony Brook University suggest that this decline may indicate that pressures from other sources are growing, while the effects of managed care and capitation are shrinking. They report that the pressures on physicians “may stem from sources other than payment (e.g., administrative price limits).” The declining role of managed care in establishing financial incentives to limit care “seems to suggest that managed care itself is becoming less restrictive,” according to the researchers. Other health plans, however, may be catching up, becoming more restrictive themselves. “Traditional indemnity plans may be more likely to question procedures and services, much like their managed care counterparts,” according to John A. Rizzo, PhD, coauthor and professor of economics at Stony Brook. It appears that managed care and traditional indemnity plans were substantially more similar in their effects on physician incentives in 2004–2005, than they were in 2000–2001. T Percentage of patient care practice revenue from managed care In 2000–2001, physicians who accepted managed care insurance had about 53 percent of their patient care practice revenue come from managed care. Among doctors whose financial incentives did not favor reducing services, the average managed care involvement was lower — 45 percent. So in 2000–2001, greater managed care involvement was associated with greater financial incentives to reduce services. This association vanishes in 2004–2005. All managed care 2000–2001 Do not favor reduction in services Favor reduction Do not favor reduction in services Favor reduction 45.16 53.36 2004–2005 42.32 42.57 In 2000–2001, there was a positive relationship between capitated managed care and physician financial incentives to reduce services. But by 2004–2005, any associations between capitated managed care involvement and financial incentives to reduce care had disappeared. Capitated managed care 2000–2001 Do not favor reduction in services Favor reduction Do not favor reduction in services Favor reduction 15.75 24.21 2004–2005 14.42 14.91 Source for both charts: Fang H, Rizzo JA. The changing effect of managed care on physician financial incentives. Am J Man Care. 2008;14(10):653–660 NOVEMBER 2008 / MANAGED CARE 17

Table of Contents Feed for the Digital Edition of Managed Care - November 2008

Managed Care - November 2008 Editor’s Memo Contents News and Commentary Legislation & Regulation Letters Medication Management Compensation Monitor Do It Yourself for Less Biomarkers Promise, but Do They Deliver? Oncologists Complain About Drug Payment Consider Blood Pressure Self-Monitoring Q&A: Keep Industry in the Game Formulary Files Plan Watch Tomorrow’s Medicine Outlook Respiratory Syncytial Virus Managed Care Considerations Contents Continuing Education Objectives RSV Disease in the Pediatric Population In the Trenches RSV Infection in the Adult Population Health Plan Medical Director Health Plan Pharmacy Director RSV Issues and Solutions Assessment/Evaluation/Certificate Request Post-Test

Managed Care - November 2008

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