HEALTH SERVICE BROKERS

A MONOGRAPH

Richard P. Kusrow INSPECTOR GENERAL

OEI-Q5-89-00510 OCTOBER 1990

EXECUTIVE SUMMARY

PURPOSE

This study was conducte to identify mechansms use in the private setor to control medcal costs which might be suitable for goverment heath car progrs, parcularly Medcar.

SCOPE

The tenn "heath servce broker," as used in this repo refers to any business that establishes and monitors provider networks, provides utization magement servces or seurs discounte medcal servces and supplies. Ths repo provides an overvew of method used by health service brokers to maage health car costs and utization. Ths study reports on

techniques which brokers employ to ensur their succss in eah ar mentioned above. While this report looked at the overall feasibilty of trsfenig these approaches to government progr, working out the speifc mehanics wi be left for futue studies.

METHODOLOGY

In-person and telephone intervews were conducte with a pursive sample of brokers providing utilization maagement, taete discount purhasing and netWorkig servces. Discussions were held with the Health Ca Financig Admstrtion (HCFA), acadmicias, representatives of professional organzations, corportions and expert in ths field. A tota of 51 intervews were conducte.

FINDINGS

Effective provider networks control network membership, regularly assess utiization of servces and remove servce intensive providers.

A varety of approaches coupled with stadadize deision trs and other innovations ensur the success of utiization review.

Targeting speifc goo and servces for bul purchase at different levels in the distrbution chain can produce savigs and mata patient access.

Individual case management could improve qualty of car, incras efficiency and mae better use of benefits for chrnically or tealy il patients.

CONCLUSION

Many private sector mechanisms for contrllng health car costs appear to have potential for Medcar, Medcaid and other DHHS progrs including those adnistere by the Public Health Service. Each component should study the mechanisms used by the private setor to determne whether any can or should be adpted to their progrs.

. . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . .. .. . . . . . . . .. . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..

TABLE OF CONTENTS

EXECUTIVE SUMMARY

INTRODUCTION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

PURPOSE. . . . . . . . . . . . . . . . e.BACKGROUND

SCOPE METHODOLOGY. . . . . . .'. . . . . . . . . . . . . . . . . . . . . . . . . . . . .

CHAPTER 1: Provider NetworKS. . . . .

Effective provider networks control membership, regularly assess utilzation of services, and remove service Intensive providers

Employers as purchasers of comprehensive health services . . . . . . . . . . . D . . ..

The HCFA as purchaser of comprehensive health services.

CHAPTER 2: Utilzation Review.. . . .

Brokers, employers and organizations favor a combination of utilzation review (UR) techniques for an effective UR

. . . . . 8. 8 . . . . . . . . . . . . ..program Employers as reviewers of health services.

The HCFA as reviewer of health services.

CHAPTER 3: Targeted Purchasing .. 15

Targeted purchasing In the private sector has developed beyond the purchase of prescription medicines and durable medical equipment.. . .. 15

Employers as purchasers of targeted medical services and supplies The HCFA as purchaser of targeted medical services and supplies.

CHAPTER 4: Individual Case Management (ICM) ......................... 18

Brokers believe ICM Improves quality of care, Increases efficiency and makes better use of benefits for patients with catastrophic or terminal diagnoses or with chronic conditions. .................................................... 18

Private Sector Individual case management The HCFA as Individual case manager

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..

CONCLUSION . . . . . . . . . II . . . . . . .

BIBLIOGRAPHY.

INTRODUCTION

PURPOSE

This study was conducted to identify mechanisms used in the private sector to control medical costs which might be suitable for government health care progrs, parcularly Medcar.

BACKGROUND

In 1965, health care costs accounted for 6 percent of the gross national product (GNP). Accordig to a recent repon issued by the Commerce Deparent, health spending in 1990 wil approach $661 bilion and account for 11.5 percent of the GNP. The Commerce Deparent also projects that spending on health car in the United States will rise 10­percent annually through 1995.

The escalating cost of health car has led third par payers employers, insurrs and the

government to seek new methods to curb these rising costs. In 1983, Medcare implemented the prospective payment system (PPS) to adess Par A inpatient costs. Following the adoption of PPS, Medcare undenok a number of policies intended to generate savings for ambulatory car services. These policy actions include a physician-fee frze, reductions in payments for overpriced procedurs, balance billing reform and incentives to encourage physicians to accept assignment. Despite Medcar s effons to contrl health car costs, expenditurs continue to grow.

As Medicar purued cost contanment measures, health car providers responded by shifting more of their costs to private sector third par payers. Prvate sector health car costs soard, and employers became disenchante with trtional health car payment mechanisms and their inabilty to reduce costs and control utization. Increasing numbers of employers assumed control of their employees ' health plans and became self-insured. The more employers became involved with their health car plans, the more they realize that they lacked the expenise neeed to control costs and utization. New businesses specialzig inhealth car cost contanment moved in to fil ths vacuum.

To compete with the new companies offering specialze cost contanment servces, health maintenance organizations(HOs) and traditional health insurers "unbundled" segments of their existing business and began marketig the individual specialze services to employers. An employer might contrct for admistrative services from one company, provider networks from a second and utilization management services frm a third. This unbundling or boutiquing" of individual health care cost contament services spawned the health servces

broker industr.

The essence of the philosophy of health service brokers is a flexible pragmatism and a willngness to tr innovative approaches to managing progr costs and utiization, while maintaning quality of care and ensuring access to needed services.

Health servce brokers rage from large national corpations to individuals providing services locally, and represent a wide varety of philosophies and approaches to controlling health car costs and securng health car servces. Some of the health servce brokers we contate for this repo provide a single heath relate servce, while others provide multiple heath services which they boutique or sell as customize packages to employers,thir par payers and others, including other heath servce brokers. Health servces brokers attempt to contrl their clients ' health car expenses in a varety of ways. Ths report focuses on four speific aras where brokers clai to achieve savigs and control costs by:

establishing networks of doctor, hospitas and other health car spialties whose car is demed to be cost-effcient, medcaly competent and appropriate;

combining a varety of utiization review (U) tehniques to educate health care providers concerning unnecessar, excessive and inappropriate procedurs;

tageting certn medcal supplies and seces for purhase at discounteprices; and, providing individual cas maagement (lCM) for some patients.

SCOPE

The tenn "heath service broker," as used in this repo refers to any business that establishes and monitors provider networks, provides utiization maagement servces or seurs discounted medcal servces and supplies. This report provides an overvew of method used by health service brokers to maage health car costs and utilization. Th study report on tehniques which brokers-employ to ensur their succss in each area mentioned above. Whle this report looked at the overa feasibilty of trsferrg these approaches to government progr, workig out. the spific mehanics wi be left for futu studies.

The Offce of Inspetor General (DIG), Ofce of Evaluation and Insptions (DEI) plans to conduct more detaled insptions on some speifc approaches use by health serce brokers. There ar curntly studies in the DIG workplan focusing on private setor utilition review, seond surgical opinion and Medcaid cas management

METHODOLOGY

In-person and telephone intervews were conducte with a pursive sample of brokers providing utilization maagement, taeted discount purhasing and networkig servces. Discussions were held with the Health Cae Financing Admnistrtion (HCFA), acadmicias, representatives of professional organizations, corprations and experts in ths field. A tota of 51 interviews were conducted.

We asked the peple we contate durng ths study how they control health car expenses, and to identify medcal prours and other servs which they found to be goo candidates for cost contrl effort. We also asked them to provide an estimate of savings they achieved from their method.

Savings repone by broker and by clients vared dependig on the combination of servces provided and the aggrssiveness of the brker and client in applying these approaches. We did not attmpt to validate estites of savings, and therefore did not include them in this report.

Qualitative analysis of the intervews was used to identi method which might be suitable for addtional indepth researh to determe the feaibilty of transfenig the approach to government setor health progr. We expet that more detaled studies wi offer a more comprehensive analysis and statement of potential savings which can be derived from adopting health service broker tehniques.

In adtion to collecting service intensity and payment data relate to specific proedures, DEI's Statistical Analysis Grup (SAG) develope a methodlogy and obtaned HCFA data to detennne whether HCFA had the capabilty to distiguish cost-effective providers frm outlier" providers who bil for substatily mor seces than their pers. Th analysis was

refined by examing the data bas on physician spialty and by including data on patienthospitaiztions as a measur of severity of iless.

In the developmenta stage of ths study, we taed to acadmicias and business pepleknowledgeable in employee health benefits, as well as some health servce brokers. Based on these exploratory dicussions, we identified two broad aras where health servce brokers and employers have concentrate their effort in an attmpt to contrl rising health car costs:

provider networks which provide a comprehensive rage of servces at a discount to their clients, and

utilization review tehniques which assur that appropriate car has ben rendere in appropriate settgs.

We also discovere that many brokers and employers had refined these tehniques and applied them to speifcaly identified servces and patients though tagete purhasing and individual cas management.

This report reflects what we leared frm brokers and employers who purhase their servces. The report is divided into four chapters: provider networks, utiization review tehniques, tagete purhasing and individual cas maagement.. In each of these four chapters we examne what the private sector is doing and have attmpte to identi litations and obstacles to implementation of these concepts and key elements necessar for success.

CHAPTER 1: Provider Networks

Effective provider networks control membership, regularly assess utilzation of services, and remove service intensive providers.

Employers as Purchaers of Comprehensive Health Serves

As employers beam self-insur and took over contrl of their health benefit plans, they beame awar of the trmendous power they hold as purhasrs of health car servces. They reasoned that they could apply the sam prudent buyer priciples they used in their business operations to the purchas of health services. Using heath service brokers, they exercised their purhasing power to establish provider networks.

Provider networks operate on the principle of channeling a prectable patient load to physicians and suppliers who pratice medcine effciently. In exchange for an incrased patient load, physicias and other providers of medcal car and supplies agr to discount the fees they chare for their servces. Twenty-one health servce brokers intervewed for ths report ar involved in establishig networks to prvide health car servces for their clients. The networks encompass prefeIT provider organzations (PPOs), HMOs, independent practice associations (!As) and exclusive provider orantions (Es).

Health service brokers contol membershi by screening canddates for their networks; all request malpractice and disciplinary informtion from candidates.

Crteria used by health servce brokers in selectig providers for their networks var considerably depending on local conditions. Al the brokers we spoke with reueste information concerning mapratice clais or discipliar actions from candidates. By checking for any evidence of mapractice or disciplinar actions, brokers feel they can exclude frm their networks providers whose qualty of car may be questionable.

Prviders reueste to join networks must agr to discount the price of their servces in retu for a potential incras in their patient case load Institutional providers, such as hospitas and nuring homes, ar usualy reimbur on a per diem basis. Individual practitioners, such as physicians, ar usually paid using fee schedules. The amount of payment a provider parcipating in a network can expet to reive is documente in a contrt which is periodcaly renegotite

Patients ar encourged to use the network providers though incentives such as lower deuctibles and copayments, and discourged from using "out of network" providers by higher out of pocket expenses. In an EP, patients pay al of the medcal expenses they incur outside of the network.

Most brokers feel that negotiatig discounts on fees alone wi not produce suffcient savings unless utiization contrls ar also built into the provider contrt. A potential exists for providers in networks to offset discounts for servces by incrasing the number or intensity of

services they provide to patients. Five brkers said that the networks they established had faied to prouce anticipate savings beause discounts were offset by increased services. Accordig to one broker, service intensive providers ar often those most wiling to give the greatest discounts beause they know that they will mae up the difference by increasing their volume of servces.

Some HMO failurs, and the inabilty of some networks to produce re dollar savings, were attrbuted by some to a network's failur either to exclude service intensive providers or to contrl their intensity of servce. Whle aberrt providers of this sort may be a sma percentage, they can erod or negate any savings expete from the network. Six brokers said that buildig a goo utiization review prgram to complement the discounte pricing is the key to adssing this problem.

Seven brokers identiy potential candidates for their networks by analyzing relevant claims data to determe utiization pattrns. They use this infonnation and provider background infonnation to detennne whether a physician is a suitable candidate for their network. For institutional providers, they look at the range of seces offere cost report, utization data occupancy rates, stag ratios, etc. These brokers ar confdent that these measurs enable them to scrn out providers with less than perfect crntials, as well as those providers with aberrt utiliztion patterns.

Some brokers build utilization controls into their contacts with providers. Many more use claims data analysis to evaluae provider utlizatin before renegotiating the provider contract.

Seven networks requir that their members agr to submit-to the network' s pratice protocols and utilization review mechanisms. These agrments ar viewed by brokers, as an effective means to contrl utiiztion, ensur qualty of patient car and reuce malpratice rik. Prtice protocols are usually based on accepte stada of medcal pratice, researh on effectiveness, consultation with expert and consensus of the network mem rs. Post

payment analysis is often use as the basis of review pror to renewal of individual member contrts. One employer and thn brokers said they use clai data either in valdatig curnt contract compliance or to renegotiate contrts at renewal tie. Brokers using practice protocols ensur compliance by periodcally analyzig individual member pratice pattrns.

Clearly, access to and analysis of claims data is crtical to the success of a network, whether use in selecting potenti providers, or monitoring their behavior afr inclusion in the network. Any network that has the means to identi and wee out servce-intensive providers before inclusion in the network, and monitor utization with the network, is well ahead of the game.

The HCFA as Purchaer of Comprehensive Heal Serves

Although beneficiary freedom of choice is protected by law, HCF A is exerimentingwith demonstration projects to evaluae thefeasibility of using provider networksfor Medicare.

The HCFA has reently undenaen five PPO demonstrtion projects to evaluate the feasibilty of using networks in the Medcar progr. The objectives of these demonstrtion projects are to test the feasibilty of this fonn of servce delivery, to determne its attactiveness to beneficiares and to assess its effectiveness in controllng the volume of services biled to Medcar.

Four PPO projects under study ar enrollment modls; the fifth is a non-enrllment modl. Enrllment moels reuir that beneficiares elect to parcipate. Beneficiares must use network providers or pay a grater shar of their health car bil. In the non-enrllment project, beneficiares do not elect to parcipate in the PPO network but ar enrlled temporay whenever they use the servces of a provider in the PPO network. Unlike the enrollment modls, the patient pays no penalty for using a non-network provider.

While HCFA has the authority to conduct demonstrtion projects to detee the feasibilty of using networks to provide comprehensive heath servces, widespread implementation appear to be prohibite by curnt Medcar law, which guartes beneficiares tTom choice in selection of medcal providers. Accordig to HCFA, the law prohibits Medcare from stering patients to selecte providers. The HCFA alSO feels that curnt reimbursement mechanisms preclude negotiating with providers for dicounts. In HCFA's view, these constraits severely limt their abilty to experiment in ths area.

The HCF A ha the capabilty of identifing service intensive providers through analysis of its own Medicare daa bases.

To determe whether HCFA data could be use to scn provirs for a network, we analyze HCFA's Pan B Medcar Annual Data (BMA) files and hospi adsion fies for 1987 to see if we could simulate the reviews of cla data that brokers perform when evaluatig potential physicians for their networks. Using the 1987 BMA data we aggrgated the servces each beneficiar had reeived to the physician who lat saw the patient. We assume that the physician last sen by the patient operate as gatekeeper and was respnsible for ordrig the services that followed Once we aggrgate services, we aryed the providers accordng to servce intensity. Figu 1 indicates the results of our analysis. shows that 91 percent of physicians who biled Medcar in 1987 provide on average, 20 or fewer medcal servces to their patients. We assumed that physicians billig more than 20 services were outliers and may not be goo candidates for a network beause of their service intensity.

FIGURE 1

Provider Service Intensity (% = number of providers)

LESS Services

91%

MORE Services

Based on a one percent sample of the 1987 BMAD files

If Medcar had the abilty to influence a patient s choice of physician, patients who chose an outlier physician would have to bear a grter shar of the medcal costs though incrased coinsurce and other incentives. Whle our assumptions may bias which physicians identied similar aIYs of data could be done using dierent assumptions.

We found that neither severity of ilness (measur by hospitations) nor speialty accounte for the intensity of servces some physicis provide. In the past, physicians providing intensive services to their patients have argued that their patients ar sicker and therefore reuir more medcal servces. Oter physicis argued that their pratice speialization accounte for the intensive servces their patients reived We analyze the fruency of services provide to beneficiares who were hospitaze in 1987. We also analyze the intensity of servces by physician speialty. Physicians who were outlers in our initial analysis were also outliers in their speialty. Patients of outlier physicians did not have a grater incidence of hospitazation than their more conseative counterpar.

While this method of analysis enables tagetig of individual physicians, geogrphical location and other factors should be taen into consideration before excludig a parular provider frm a network or penalg Medcar patients for using them. The purse of our ilustration is to demonstrte that HCFA has data which could enable them to identi servce intensive physicians whose parcipation in a network might be undesirble.

Issues for further stu Studies should be considered on the tys of legislative changes that would be nee pennt the establishment of provider networks. Other studies should exame the tynetwork that w uld be neeed to meet patient nee. Is it bettr to have national, regional or local networks? Should they include the full spectrm of medcal providers, or only pricare physicians? Should government piggyback on alady established private seCtor progrs, or contrl their own networks? Do providers who agr to the largest discounts use more services to offset their discounts?

Regardless of the answers found to these questions, successful networks include the following items:

a means of identifyng and excluding servce intensive providers;

a method of incorpting prtice guidelines into provider contrcts;

a means of collecting stadaze data to monitor network utization and efficiency;

a method for analyzing data to determe network financial condition and individual perfonnce with the networ; and

a means of influencing patient choice of provide.

CHAPTER 2: Utilzation Review

Brokers, employers and organizations favor a combination of utilzation review (UR) techniques for an effective UR program.

Employers as Reviwers of Hell Serves

Utilization review (U) is a tenn that covers a broad sptr of tehnques use individually or in combination, to exame the use and intensity of servces rendere to a patient. Such tehniques include, but ar not lite to, prosptive review, concunnt review, retrosptive review and second surgica opinon (SSQ). In the last dead, the use of UR cost contanment strtegies has incr signcantly.

The Health Insurance Association of America estiates that about half of all U.S. businesses are using some fonn of UR. These businesses and health servce brokers believe that contrllng the use and intensity of servces provide to patients is crtical to contrllng rising health car expenditus. Of the 37 health car brker we intervewed 32 offere utization review or utiization maagement servCes. Ony one broker did strctly retrosptive review and severa did strctly prosptive reviews. The vast majority employed a combination of strategies.

The scope and focus of UR vares by employer and by broker. Some approaches review servces rendere The more common approach tagets speifc prurs, diagnoses, providers or high doll servces for review.

The infonnation resulting frm UR is use by brokers for may purses:

to identify potential members for inclusion in networks;

to monitor networ provide compliance with agr-upon prtice gudelies;

to make coverage determnations or paymnt deisions;

to identify medicaly unnecessar or excessive servces;

to preclude cert the kinds of servces which have ben demonstrte by medcal evidence to be ineffective; and,

to identify patients for individual case maagement (lCM).

Many brokers and employers use UR services to educate patients about probable outcomes from using certn services and tr-offs associate with using alternate servces. Utition review can result not only in less expensive car, but also in improved qualty of car.

Prospective review can reduce the nwner of costly invasive procedures.

Prspective review is used to ensur a course of treatment which is appropriate, cost effective and of high qualty. Prospective review is not applied to episodes of emergency treatment. The people with whom we spoke generaly agreed that prospective review has the greatest impact on contrllng health costs, because it can result in the use of a less costly tratment or procedur, the use of a less costly settng or the postponement of a proedure unti alternative medical tratments have ben tred.

Table 1 lits 21 of the. 57 specifc items which brokers mentioned as suitable for prospective review. Table 1 contans only those items with Medcar expenditurs exceeng $15 mion annually. While the servces identified in Table 1 ar based on broker experience with prospective review, many have a considerable body of medical research questioning the abilty of the servce(s) to improve a patient s quality of life. For example, in research conducte by the Rand Corporation on physician behavior for the National Institutes of Health Consensus Development Progr, coronar arery bypass surgery was found to be unjustied for 14 percent of their sample, and "equivocal" for another 30 percent

Conqurrent review can identif potential cases for ICM.

Concurnt review occurs during the coure of a patient s tratment and reuirs that approved admssions be recertfied at specific intervals. Virally al the brokers involved in prospective review also conduct conCUITent reviews which are priary used to monitor hospital admssions and other institutional car. Most brokers conduct concurent reviews over the telephone; some conduct on-site reviews. . Many brokers conductig conCUITent care reviews use software progrs to minimze reviewer subjectivity and to ensure consistency in the decision process.

The goal of concurnt review is to prvent the use of unnecssar or inappropriate services; thereby reucing costs. Continued stay review determes whether fuer hospitaization is necessar, identifies other trtment options and evaluates potential discharge planing nee. Concurnt review also plays an imt pan in identiyig cass that might be suitable for ICM.

Retrospective review can idntif providrs with abe"ant utlization an procedures vulnerable to manipulaton.

Retrospetive review is a multi-facte approh to UR which ocur after the patient tratment has ben prvide It is used by heath sece brokers to idnti: 1) potential providers for network; 2) provide who exce agr upon tratment norm; 3) servce intensive providers; and 4) patients for ICM

Retrospetive review is also use to document for the employer or insurr that the goos and services they paid for were actually reived by the patient. It assesses the abilty of systems alady in place, such as prospetive review, to ensur the medcal appropriateness of servces. It is also use to identiy speifc servces which have a high lielihoo of havig ben upcod frgmnte or otherse mapulate to incr reimburment. Data frm retrosptive reviews is alo use by brokers to renegotite ras and contrts with prviders in their networks.

Brokers feel all UR program benefit from use of standdized softare program which provide more consistent criteria for evaluation.

A number of brokers have purhased softwar progr designed to provide mor consistent means for detennning whether cert medcal procurs ar warte These softare progrs employ clinically documente stada of car which enable their users to detennne whether a propose medcal prour is necssar and approprte. The softwar not only promotes mor consistency in the deision procss, but alo douments the crteria for deni or approval of a medcal prour. If the computer assiste review indicates that a propose prour is of questionable value, a seond opinon may be scheduled and/or a medcal consultat may discuss the propose prur with the attndig physician befor deiding whether to approve the procur.

Second surgical opinon (SSO) is a UR mechansm that some brokers feel benefits from the use of stadaze softwar. While most brokers felt that SSO was not a very cost effective UR tehnque, others disagr and claied signcant SSO savings. Those broker who claime success with SSO, use SSO only in selecte cass. Some brokers selecte procedurs which researh has shown to be most liely to be inappropritely used Others selecte candidates suitable for SSO by using their stada prior authorization softar. Those brokers who felt that SSO was not a very cost effective UR tehnique cite extrmely high SSO confmnation rates as the ma reason for SSO program faiur. Ths may be due to the blanet approach often use rather than the more focused approach use by those who have had more success. Brokers claiming SSO success also speified who would conduct the

SSO consultation. They felt that ditig patents to select providers mize any conflct of interest and resulte in a more objective SSO.

Obstacles to effective UR are resistane by providers and amivalence by employers/payers regarding enforcement ofUR decisions.

Durg the cour of our intervews, we as what the major obstales to cost/utization management were at this time. Ten brokers told us that ther was prvide resistace to the system, a lak of physician coopetion, and a nee for employers and insur to enforc their DR deisions. When questioned about what changes wer nee to overcome these obstales, twelve brokers observed that ther is a nee to wor mo closely with providers and establish workig relationships that de advers situations.

One way to adss these obstales may be though use of clical pratice protools or guidelines. The development of pratice guidelines is viewed by some brokers and expert as the key to improvig the qualty of car provide to patients as well as contrllg use. Brokers that have develope their own stada of pratice cla that most physicis respond well to them and that changes in physician behavior do occur. Physicias who repeatey fail to abide by cliical prce gudelies ar removed from the network.

The HCFA lI Reviwer of Healh Serves

In comparson to the private setor, Medca s apprach to UR priy has ben lite retrosptive reviews. In reent year, HCFA has undenaen severa projects designed to broadn their approach to UR.

The HCF A' s fiscal agents hae developed alternative review program for their private business, but hae no incentve to use themfor Medicare.

May of HCFA's contractors have purchas or develope alternative UR progrs simar those offere by brokers for use in their prvate business. Several have purha URdeision softar for use in their private business. These contrto raly extend to their Medcar business the UR progr they have develope or purhas for their private business, beause there ar no incentives for them to do so. Softar which has ben purchas or develope by HCFA's fiscal agents is not use for Medcar clai 1iause the authority for mag deisions concerning the appropriateness of medcal car and procurslies prily with Peer Review Organizations (PROs).

HCF A' s PROs prospectively review a few surgical procedues, but muh is left to each PRO' s dicretion.

The HCFA curntly reuirs PROs to prospetively review a select number of proedursincludig coronar arry bypass and catat surgeries. The PROs have the option of selecting which procedurs they will prospetively review. Each PRO has ben left to develop its own crteria for use in assessing the mecal necessity of the procedurs it has selecte for prospective review.

The HCFA would lie to move towar computerization of the prior authorization process. However, their plans do not call for the establishment of a national system using a uniform decision tree for all PROs. The system HCFA envisions would allow each PRO to establish its own system. Accordig to HCFA, the statute which pennts prior authorization of cena Medicare services does not contemplate national stadads for PRO decisions. But the statute does not preclude the use of national stada either. Failur to adopt a national uniform approach with documented stadads for allowing or disalowing a parcular proedure may leave Medicare s prospective review program vulnerable to inconsistent decisions.

The Medicare program conducts concurent review on certain Part A services, but without computer assisted guidelines.

Medicare conducts "concUIent" reviews on some skilled nuring home stays, rehabiltation services, home health visits and other Par A servces as par of their claims processing. Informtion, in the form of treatment plans and, in some cases, physician certfication as to the need for continued care, is provided on the claims submitted by providers. Decisions on whether to continue coverage of a benefit, and for how long, is detennned by examning me infonnation submitted along. with the clais. The Medcar proess can be descnbed as less aggressive compared to some private sector approaches which ar conducte on site or over the telephone, and less "objective" compar to the use of computer assisted guidelies used by brokers to reuce the subjectivity of UR deisions.

The HCF A is exerimenting with alternative approaches to retrospective review.

The HCFA is cUIently sponsoring some demonstration projects involvig retrspective review. In one project, a health servce broker has been subcontracted to conduct utilization reviews. The purpose of this project is to detennne if the use of private sector contrctors would improve Medicar DR effons. This project has generated some complaits from the provider community but appears not to have had an effect on patient satisfaction with the Medicare Program. The savings from the use of an independent UR firm appear to be significant. In another demonstrtion project, a Medcar caner has ben developing screens which will enable them to match diagnosis with tratment. Early res lts indicate the scrns have been successful in identifyig aberrant practices where the car and servces given to a patient ar not indicated given the diagnosis.

These experiments indicate a recognition on the par of HCFA that its curnt UR activities are not yielding the expected results in terms of cost avoidace and savings. Some people with whom we spoke felt that HCFA has permtted their contractors too much latitude in their ap­proaches to UR and that many of HCFA' s contractors did not effectively use their UR data: to corrct problems in the Medicar system. One broker we spoke to felt that there may be a con­flct of interest on the par of caners, and a reluctance by PROs to challenge peers, when it comes to dealing with utiization issues.

Issues/or fuher stud

Studies should be conducte to detee the effecveness of UR activities alady in plac government progr. New apprhes to UR should be explore Would nationalstadadi softwar f tate a more consistent apprh to desion-mag? Should independent subcontrto be use for UR activities? Should Meca s fIScal contrtors, many of whom own pror authortion softar, scn cass so that only unrsolved cass ar forwarde to the PRO? Should SSO be perfor by a designate group of independent subcontrto, rather than left to a physician of the patient s choice?

Whatever tehniques, or combination of tehniques, ar use an effective UR prgr should:

provide a review tr so that the proess can be duplicated by an independent thir par;

provide some method for doumentig the procss and assurng consistent, unifonn decisions; and

prouce reliable, unifonn data to assess individual contrctor performce, and to accurtely trk cost savigs and effectiveness.

... ....... ",-.......'" ... '" . .... ..... ...... ... ...."' ......... .......,...... ...,..............,- .-.... " "',,.."... .... .......". " """"--"" """"'" .....,........ .......,-,..... ......,,-,... ...::::::::.::::::::: :..:::::::. ....... ... ... . ......... ......... ........... .. ...... ...... ....... ...... ... .... .............. ... ........ .... ........................................ .... .... ....... ........ ......... .... ... ......... . . ............... ... ................ ........... ........... ................................................... . ........... .............................. . ...................... .... ...... .. ........... ................ .............. ....................... ............................ .......... ...... ....................... ............. ..... ......... ......................... .. ....... ....................... ..:::: ~~~~~~ ~~~~~.... .... .......... ....... ........... ... .......... ...... .......... ........... ............................ ..... . .............. """'"'''''''''''''''' '''' . ... ........ ...... .. ............................ ........... ................. """"""""'...... ,.... ........... ... ............... .... ........................ ............... .........;;: :;; :;;; ::. )::::::::::: ::: ::: ::::::... . .......... ...... ..........:::. ~~~ :::.:::::. !!:~~~:::..::...... :;:::.::::::: ;:. ::: :. . .. .. .,!.~~~ :?: ..::............ ......... .. ...... ... .... ............... "".., ..:::/::..........,.. ......, ..... ::)) ...... :::(:.::/

CHAPTR 3: eted Purchasin

Targeted purchasing in the private sector has developed beyond the purchase of prescription medicines and durable medical equipment.

Employers as Purchasers of Tareted Medical Servces and Supplies

Volume discounts, "bulk" purchasing and competitive biddg for supplies and servces varations of the purhasing principle used by health service brokers to establish networks. As with networks, volume discounts ar negotiate for specifc medcal goos and services in retu for diting patients to contract providers.

Targeted purchaing now includes a wide variety of costly medical services, such as coronary artery bypass grafts (CABG), intraocular lens implants, home intravenous therapy and diagnostic imaging.

While the concept of securng certain medcal items and goos at discount is not new, many of the medical supplies and services being purued by brokers are innovative. These tageteddiscounts ar frequently negotiate for very specifc servces or episodes of treatment. Thus they differ frm, and independent of, the discounts derived from a comprehensive network of providers. The brokers we spoke with believe this ara has developed beyond the purchase of medcal supplies, equipment and drgs to include a wide varety of costly medcal and surgical services.

Eighteen of the health service brokers n..."... ........ ""0 .we spoke with are involved in tageted :tt :J::purchasing. Table 2 lists some of the items they believe can be tageted for :$(m.)tQflj' erilfl :$ijij purchase at a discount. The services :OC

listed in Table 2 are high cost servces mentioned by more than one broker.

:::t ::::::i: ::::::i:::::::li!iili i:;;;ii. il::........... ""..0...... .....................Cert surgical proedurs, such

::i:: :i. :gHr i::M 1:. 9yjpm nli:. ii: :i.i:::i. iii. i::.coronar arery bypass and catact surgery, also were mentioned as items

!!I:I:il!iiii1jlll!!!llillil:il!!;

illjll!llil!llilllsuitable for tageted purchase. These and j!I Milllilllli!111 other surgical proedurs were not shown in Table 2 because HCFA has

lilll!ii(lil!ii!i:llllllijill:j!i;ilt611 illl r,!i!! li:::i!jil!iill!ijj

::U::.recogniz that alternative procurment ;tt::::.8rtff ?Br9 jhi!iB. Y19!:

and reimburement methods are suitable ll::: ijp Bm. iY!.

::ff:for some high cost surgical proedures. ff. 19ry.

Equally as imaginative as the items and ,II JQg

procedures being targeted by brokers for discount purchase ar the unconventional applications of the methods being used to

seur them. Negotiate package rates with "cente of excellence" (hospitas, ambulatory surgical centers and certn physician offces for spc surcal procurs) can, acording to brokers and others we inteewed imrove the qualty of patient car and prouce savigs.

Discounts negotiate with maufactu and wholesalers raer than reta providers another promising ar One broker negotiats rebates frm phanutical maufactus and does not attempt to secur dicounts frm dispnser. Patients purhas their prescptions wherever they choose. Billng for reimburment also remas unchanged The patient s insurr reord the quantity and amunt pai for eah drg and periodcaly noties the drg maufactur of eah drg quatity reimbur The maufactur repays the broker a pre-negotiate amounL Ths approah appe to be the leat intrsive and leat disrptive method for seurg drgs at discount. Whe used priy for prescption drgs, it appears that this method may alo have possible application to other ar such as durble medcal equipment and parntera and entera feengs.

One employer, with plants in four communities acoss the countr, uses a ma-oder phany for prescptions, contrts for discounte durble medcal equipment, has a

single-sour contrt for mammogr and is explorig the comptitive bid approach for denta car, viion car, chiopratic servces, poatr and home health ca.

Ths employer, and in fact al of the employers and broker negotiatig discounts for tagete servces, felt that a detaed analysis of servce nee and maket conditions was essential before entering negotiations or lettng out a reuest for comptitive bids. They also felt that while a lage-scale, national approach may be appropriate for some seces and some markets, the same approach may not be suitable for other.

The HCFA as Purchaser of Tareted Medical Serves and Supplis

Although Medicare law does not permt HCFA to engage in targeted purchaing of medical equipment an supplies, HCF A ha begun exloring Itcenters of excellence" in

a demonstraton project involving CABG.

There is curntly no provision in the Medcar law which would pet HCFA to engage in competitive biddng or in negotiation for spifc medcal servces and supplies. Medcar would nee a legislative change to implement selective purhasing of servces and supplies. Repercussions from exclude providers and suppliers is liely.

Despite no speific legislative authority to implement taete purhasing, HCFA does have the authority to conduct demonstrtion projects to study the feasibilty of seurg some ser­

vices in ways which were not contemplate when Medcar legislation was enacte One such demonstrtion project, curntly being underten by HCFA, involves the use of "centers of excellence" to provide some surgical proedurs. The project is just gettng underway with selection of providers stil in proess.

Issues for further stud

There appe to be a nee to explore what tys of legislative changes would be reuir enable governent progr to engage in tagete purhasing. Studies should alo explore the following questions: Wht tys of servces would be suitable for tagete purhasing? Where in the distrbution chai is it most advantageous to taget purchass, e.g., at the manufactur, distrbutor or retal level?

Regardless of which seces ar tagete or how savigs ar achieved a tagete purhasing approach should:

incorprate utization controls to detet and avoid increas use that might negate discount savings; and,

produce reliable data which can be used to assess cost effectiveness and to negotiate futu discounts.

....."...... ... ... .....,..."."....... ...... ",.... ... .. ............. ..............,-,...""-"""""""""'''''''-''''''''' '''''''''''''''"" "'"''''''''''''''''''' '''''-'''''''''"""'"'''''''''''''''' ''-''-'--''''''''''''''''''''''''''' """"""'--"'"''' ''' ''' '''''''''''-,..-,.......... ..,...................."""""". ",....... '....".".."""".. ,.. ,................................................................ ..................... ................... ....."""""'."................. .......,............. .......... ..............................................:::::::::::::::::::::;:::::::::::::::::::::::::::::::::::::: :::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::;:::::::::::::::::::::::::::::::::::::::::;:::::::::::::::::::::::::::;:::::;:::::;:::::::::::::::::::::j:::: ::::j:::::::j;::::j:::::;:j:::j::::::::::::: :::::;::::::::::::::.::::::::::::::::::::::::::::::::!:::::: :::::::::::::::::::::::.::::::':::::::::::::::j:::::::::::: :::::::: ::. ::: ::::::::,::::::::::::::::' :':':::::::..:::::::::. ::::':::::::::: :::::.:::::,:::::::::::: :::'"."."""""",. .......,............... """-"'-"""""""""'-"""'."..,.""". ".,..,.""".

CHAPTR 4: Individual Case ManatJement

Brokers believe ICM improves qualit of care, increase efficiency and makes better use of benefits for patients with catastophic or terminal diagnoses orwith chronic conditions.

Privat Sector Case Management

Individual case management is a prss of diting patients, identied thugh other form of UR, into more cost-effective mods of trtment. It is tyicaly use for catatrophic, long tenn or high doll medca cas. It may be an integrte component of a UR progr or a stad-alone component. Lie other UR progr, its goal is to ensur approprite, qualty car and prmote cost control.

Table 3 identifies some of the aras brokers find suitable for ICM. The list was limte to costly conditions _11111811mentioned by more than one employer or broker. The conditions liste ar also III;;IIII;I;IIII.1111IIIIIIIji

those in which a coordnate approach ::I:llllliil:III;I;II;; II; :::::::::::::j:j::::::I, j:j:I::::::j::;::;:::::j:::::::::::::::::Ij::i::j:::::::::::::::::::;:::i:::j:::would provide signifcantly better car to

the patient than the piecmeal approach ::::::::::i:::::::II:::::;:;::8

9:: jM::::::::::::::::::::: ::::::;::::::::I:::::::::::::::

which sometimes results under ::::::::i:lq

!P!!::m'!mI::::::: ::::::::::::j:::I::I:::I:IjI:::i:I:I::i::::::j::::i::::::::::::::j::,:::::::I:::::::

trtional coverage. illllllllllllllll:llllllllil:illli.

IIII'IIIII'1I:IIIIIIIIIIIIIIIIIII,I:IIIII:IIII!IIIIIII:I:IIII!:IIIIljlllllIndividual case management is often 111 mt9M: ::::::::::::i:':::::i:::::::::::::::::::j:j::::i:::

::::::::::::::::::::::i1: :::::I: ::::::I::::::::::::j::::,:::referr to as "car maagement ::::J;!!t:' er. 9m:'9 :emRI!beause it coordnate$ the mi and level

of patient car ghout the entie

course of tratment. Coordation of titservices may include home health car services, outpatient treatment or rehabiltation and the procurment of durable medcal equipment or supplies. These servces and supplies may be delivere by networks or by suppliers under spial contrt.. The ICM servces may include some health benefits not usualy covered under the health plan (such as cert fonns of home-bas car), but demed more cost effective in these speial cass.

Twenty-seven of the brokers and al of the employers we intervewed have some involvement in ICM. They felt ICM was valuable beause in toy s envionment catastrophic cass constitute a disproportonate share of health care expenditus. Brokers believe that the earlier the intruction of a patient to ICM, the grater the control over the use of effcient and cost effective services.

In its best for, ICM is a collabotive prss to conate a plan of car. Typicaly, the case maager or health car consultat assigned to a patient develops, in conjunction with the patient, famly, and health car providers, a trtmnt plan and alternatives which cover both the hospitaization and any post-hospita car that may be reui. The case maager assists the patient in mang infoned deisions about trtment alternatives and then functions as a liaison between the patient, dotor, and insurr. Ths faciltates the development of a ttatment plan that not only is appropriate and cost effective, but also one that meets with the approval of the patient

Canes for ICM are idntifed through utlizaton review technques or through a patient advocate.

Two strtegies ar used by brkers and employers to identi suitable candidates for ICM. The proactive approach is broker intiate the retive is patient intite The proactive strategy flags suitable candidates for ICM durg prospetive or concurnt utiization review. Cadidates for ICM may be identied by diagnosis, proure, cost or intensity of car. One broker told us that the proactive strategy enables them to identify 20-30 potential cases a week for their clients.

The retive strtegy relies on the patient to voluntaly contat a "patient advocate" or adviser, employed by the broker or the employer, for assistace on coordating the heath plan benefits for a high-cost episo of car. The patent advocate or patient "hotle" alo functions as an integr par of some brokers ' UR progr by providig patients with infonnation on alternative medcal ttatments. In some progr, ths system is also used to assist tennnaly il patients in mang deisions and argig for the mecal car they nee at the end of their lie.

Obstacles to ICM include insuffcient patient and provider eduation, and honest disagreement over treatment alternative.s.

Most ICM progrs being conducte by brokers ar volunta, in that P3tients ar not

reui to use the identied alteatives. We oftn hea that patient parcipation rates of such volunta progr ar exttmely low, and that educatig patients and physicis concerning avaiabilty of ICM and its benefits is a key obstale which nee to be overcome for a successful ICM progr. Many brokers, employers and exprt believe patients want and appreate help in assurg that they get the best mecal car possible, and that goo car wi not ru them or their famy fiancialy. Neverteless, some of the employers we spoke with offere these maagement servces strctly on a volunta, patient-intiate basis, lest they appear too intrsive.

Another ICM obstale is honest disagrment over ttatment alternatives. National pratice guidelines, outcome assessment research and changes in reimburement incentives were

mentioned by many of the peple we interviewed as elements that would playa key role in the futue of ICM. Prtice guidelines and outcome assessment were considere to be key developments that would enable ICM to resolve disagrments over ttatment alternatives in

the best interest of the patient.

The HCFA as Individual Case Manager

The HCFA is capable of identifing service intensive patients, using the resources currently available, but lacks the authority to direct such patients into ICM.

The HCFA does not routiely conduct any ICM for Medcare beneficiaes because curnt Medicare law prohibits steering patients to select providers. The nearst fonn of "individual case management" in the Medcare progr is a provision which enables patients diagnosed as tenninaly il, or their representatives, to elect hospice car in lieu of more costly care under the regular Pan A benefit.

The HCFA sta, with whom we spoke, felt that ICM in the Medcare progr might not be as effective as in the private sector, beause of the dierences in the diagnoses associated with Medicare patients compar to those covere by private insurce. The HCFA also felt that the curnt provisions of the statute clearly define what is covered and not covere by Medicare and that the statute may not be flexible enough to allow Medicar to use the most cost effective means for securg ICM servces. Some of the brokers with whom we spoke also indicated that the Medcar population is unique, and that some of the techniques and methods used by the private sector might not be as effective for the Medcar progr

We leared in our discussions with HCFA that one PRO (Nebraska) is conductig a ICM pilot study. Accordig to HCFA, this project is focusing on high cost diagnoses. The obstales encountere thus far in this demonstration project ar:

inabilty to taget beneficiares suitable for ICM,

inabilty to target patients before hospita adssions,

difficulty in approaching patients to encourage use of ICM,

inabilty to document savings.

Identification of suitable patients for managed care, as early as possible, appears to be the key to successful ICM. We examed HCFA BMAD files to determne if Medcar carers had

identiy patients who might be suitable for ICM based on intensity of medcalthe abilty tq

services. In analyzig the BMAD sample, we found that about one percent of Medicar patients receive more than 51 medical servces annually. We believe that the data being maintaned by the carers can be used to identify patients receivig a high volume of medical services. Two questions must be asked with regar to these patients: 1) Are they suitable candidates for ICM? And 2) Is the car they are receiving appropriate?

The RCF A believes that patient advocate services would be best provided by outside organizations.

In our discussions with HCFA, we outlined the "patient advocate" or "patient hotlne approach used by some employers and brokers. May companies use patient hotlines to detennine patient interest in ICM, and to dit patients into specialize networks or to targete purhasing arangements. The peple we spoke to in HCFA agr that long tenn effons are neeed in this area. However, they felt that a patient advocate approach to DR might be viewed as "too soft of a service" for Medcar to provide if it were volunta, or big brother" interferig in the practice of medcine if it were mandated. The HCFA feels that

advocate services might be better provide by outside organiztions representig the elderly and disabled.

Issuesfor further stud There appear to be suffcient potential for researhing the feasibilty of ICM for Medcar and other federa health car program, in light of the special populations these Federal progrs serve. What kinds of crteria wil best identiy potential candidates? Who should perfonn the review for potential candidates, and how can ths be done most effciently? Who should be responsible for maaging the tratment of identified patients? How can appropriate patients be encourged to choose the ICM approach? How could a patient advocate function within a government program?

Any ICM progr should:

emphasize a collaborative approach among patients, physicians and payers;

use common, wrtten guidelines or protocols;

include a proedur for resolving honest disagrment over treatment alternatives; and,

gather reliable data for tracking parcipation rates and cost effectiveness of the progr.

CONCLUSION

The intent of this report was to stimulate discussion as to whether any of the approaches used in the private setor for controllng mecal costs might be relevant to the public setor. The

purse was not to endors anyone method or prtice. Befor any such undertg, adtional studies ar nee which will provide mor indepth informtion on eah method

Some of the method use by broker may be mo rey adpte to public seto progr than others. The DHHS wi nee to give cafu consideration to the legilative obstales and adnistrtive imaints which curntly prvent the trsfer of these private setor cost contrl mehanisms to the public sector. The DHH' succss in integrtig these kinds of progrs depends on whether the necessar legislative changes can be ma.

Overal, may private sector mechanisms for contrllng health car costs appear to have

potenti for Medcar, Medcaid and other DHHS progr includig those adstere the Public Health Servce. Eah component should study the mechansms use by the private setor to determe whether any ca or shoul be adpte to their prgr.

, " , " pp.

BIBLIOGRAPHY

Medicine and Health,Alter Medcar PRO Review, Says GAO, December 25, 1989, Vol. 43, No. 50, p. 3.

Aging Panel Holds Hearng on Drg Prces, This Week in Washington, July 21, 1989.

Aquilna, David, "Data Demands: a Dauntig Hurdle, Managed Healthcare, Februar 12, 1990, Vol. 2.

Bachman, Sar S., et al., "Preferr Prvider Organizations: Options for Medcar," Inquiry, Spring 1989, pp. 24-34.

Bacon, Kenneth H., "Fins Haven t Cut Health Costs by Using Pror-Review Progrs, Report Finds,

The Wall Street Journal, October 19, 1989, p. B4.

Bacon, Kenneth H. White House Loks at Ways to Control Qualty, Costs of Health Car The Wall Street Journal,for Elderly, November 24, 1989, p. A3.

Bigger May Not be Bettr for Purhasing Groups that Overwhelm Customers, Modern Healthcare, May 5, 1989, pp. 36-1.

Blue Cross Keeps Lid on High Drg Costs," Employee Benefit News, Apri 1989,

14- 15.

Blues Fonn C earI!ghouse to Monitor Quality of Cae, Modern Healthcare, September , 1989, p. 82.

Boland, Peter, "The Ilusion of Discounts in the Health Car Maket, Health Affairs, Summer 1985, pp. 93-97.

Bolinger, Roxanne, "Doing Business with Managed Care Plans: Mag the Best of 11, Health Policy Week, July 17, 1989, pp. 1­

Brook, Robert et al., "Diagnosis and Treatment of Coronar Disease Comparson of Doctors ' Attitudes in the USA and the UK," The Lancet, Apri 2, 1988, pp. 750-753.

Brook, Robert, et al., "A Method for the Detaed Assessment of the Appropriateness of Medical Technologies," International Journal of Technology Assessment in Health Care pp. 53-63.

Chassin, Mark A Randomized Trial of Medical Quality Assurance, The Journal of the American Medical Association August 22(29, 1986, Vol. 256, pp. 1012- 1016.

pp. , " , "

Inquiry,Chassin, Mark R., "Stadads of Car in Medcine, Winter 1988, pp. 437-453.

Chassin, Mark R., et al., "Varations in the Use of Medcal and Surgical Services by the Medcare Population, Januar 30, 1986, Vol. 314New England Journal of Medicine,

pp. 285-290.

Coming: Competition in the Medcal Supermarket, Januar 1984 , p. 76.Changing Times,

Part B News,Discounts for Prvate Payers put Docs in ' Gry ' Legal Ara, Volume 4 Number 9, Apri 23, 1990, pp. 4-9.

Doctors Ar Entering a Brave New World of Competition, Business Week July 16, 1984 pp. 56-60.

Dubois, Roben W., M.D., et al., "Adjusted Health Death Rates: A Potential Scrn for Quality of Medcal Care," September 1987, Vol.American Journal of Public Health,

77, No. 9, pp. 1162- 1166.

Dubois, Roben W., M.D., and Roben Brook, "Assessing Clinical Decision Makng: Is the Ideal System Feasible?" Inquiry, Sprig 1988, pp. 59-64.

Dubois, Roben W., M.D., et aI., "Hospita Inpatient Monaty, New England Journal Medicine, December 1987, pp. 1674-1680.

Dubois, Roben W., M. , and Roben Brook Preventable Deaths: Who, How Often, and Why?" Annals of Internal Medicine, October 1988, pp. 582-588.

Elden, Douglas L., "Employers and Managed Mealthcar," unpublished mauscript, pp. 1- 13.

Ellwoo Explains His Theory, Termnology on Outcome Method of Managig Care, Modern Healthcare Januar 13, 1989, pp. 30, 32.

Fortne,Faltennayer, Edmund, "Medical Ca' s Next Revolution," October 10, 1988, 126-127.

Feldman, Amy, "Leading UR Fir Seeks New Chalenge with Major PPO Acquisition Contract Care, July 1988, pp. 6­

Field, Marlyn 1., and Bradford Gry, "Should We Regulate Utilization Management?" Winter 1989, pp. 103- 112.Health Affairs,

Fink, Arlene, et aI. Consensus Methods: Characteristics and Guidelines for Use, American Journal of Public Health September 1984, Vol. 74, pp. 979-983.

Fink, Arlene, et al., "Suffciency of Clinical Literatur on the Appropriate Uses of Six Medcal and Surcal Procedures, The Western Journal Medicine, 1987, pp. 609-614.

Fox, Leslie Ann, and Sandr Meyers, "Ambulatory Surgery Records: Is Infonnation Sprig/Summer, pp. 14- 15.Solicited from Patients Adequate?" Echo,

Gabel, Jon, et al., "Employer-Sponsore Health Insurce in America, Health Affairs, Summer 1989, pp. 116-128.

Medicine and Health,Georgia Physicians Criticize Medcar, November 20, 1989, Vol. 43, No. 46, p. 3.

Employee Benefit News,GHAA Study Tracks Patterns of Change in HMOs Apri1989, 44.

Glenn, Karn J., "Medcal Effectiveness Initiatives, Medicine and Health Perspectives, May 22, 1989.

Greene, Jay, and Mar Wagner, "A Volume of Options in Grup Puchasing, Modern Healthcare, October 13, 1989, pp. 26-38.

Part B News,HCFA Hangs Tight to Georgia s Medcal Review Pilot, Volume 4 Number 7, March 26, 1990, p. 1.

HMO Enrollees Have 50% Fewer Hospita Days-Study, Modern Healthcare, May 19, 1989, p. 59.

Hillman, Alan L., M.D., M. A., "Special Report - Financial Incentives fur Physicians in The New England Journal of Medicine,HMOs. Is There a Conflct ofInterest?"

December 31, 1987, pp. 1743- 1748.

Johnson, Richard E., "Establishing a Successful Approach to Health Plan Cost Management, Apri1989, pp. 27-28, 34.Employee Benefit News,

Kahn, Katherine L., et al., "The Effect of Comorbidity on Appropriateness Ratigs for Two Journal of Clinical Epidemiology,Gastrointestinal Predures, Vol. 41, No.

June 25, 1987, pp. 115- 122.

Kahn, Katherine, et al., "Measuring the Clinical Appropriateness of the Use of a Procedure, April 1988, Vol. 26, No. 4, pp. 415-422.Medical Care,

Kenkel, Paul, "Cost Management Aims at Workers Compensation Modern Healthcare, July 7, 1989, pp. 80-81.

, "

Kenkel, Paul J., "Health Prferr of Mid-America, Chicago, Modern Healthcare, June 23, 1989, p. 40.

Kenkel, Paul J., "Managed-Car Doctors Fees Var-Study, Modern Healthcare, September 22, 1989, p. 5.

Kenkel, Paul J., "Plans Avoid Managed-Ca Middemen, Modern Healthcare, May 26, 1989, pp. 92-93.

Kosecoff, Jacqueline, et al., "The Appropriateness of Using a Medcal Procedure, Medical Care, March 1987, Vol. 25, No. 3, pp. 196-200.

Kosecoff, Jacqueline, et al., "Effects of the National Institutes of Health Consensus Development Prgr on Physician Practice, The Journal of the American Medical Association, November 20, 1987, Vol. 258, pp. 2708-2713.

Kosecoff, Jacqueline, et al., "Obtaning Clinical Data on the Appropriateness of Medical Care in Community Prtice, The Journal of the American Medical Association, November 13, 1987, Vol. 258, pp. 2538-2542.

National Journal,Kosterlitz, Julie, "Bottom-Line Pain September 9, 1989, pp. 2201-2205.

Kramon, Glenn, "Four Health Ca Vigilantes, September 24, 1989,The New York Times,

Section ill, p. 1.

Kramon, Glenn, "Takng a Scalpel to Health Costs, Januar 8, 1989,The New York Times,

Section ill p. 1.

Kramon, Glenn, "When Companies Hi Own Doctors, July 11, 1989,New York Times,

Section N, p. 2.

Lam, Richard D., "Saving a Few, Sacrficing Many-at Grat Cost, The New York Times, August 2, 1989, Section I, p. 23.

Levit, Katharne R., et al., "Heal Spending and Abilty to Pay: Business, Individuals, and Government, Health Care Financing Review, Sprig 1989, pp. 1-11.

McClure, Walter When You Offer People a Fre Lunch, They Don t Eat at McDonald' Across the Board,They Go to the Ritz. September 1983, pp. 46-49.

McGraw Hill Review Resources Sourcebook of Private Independent UR Companies, undated.

Medicare-Approved CABO Centers Narwed to 10, Volume 4, Number 2Part B News,

Januar 15, 1990, pp. 4­

Merrck, Nancy L., et al., "Derivation of Clinical Indications for Caotid Endaerectomy by American Journal of Public Health,an Expen Panel Vol. 77, No. 2, Februar 1987,

pp. 187- 190.

Merrck, Nancy, et al., "Use of Caotid Endaretomy in Five California Veteras Admnistrtion Medcal Centers, The Journal of the American Medical Association, November 14, 1986, Vol. 256, No. 18, pp. 2513-2535.

Morford, Thomas G., "Fedral Effons to Improve Peer Review Organiztions, Health Affairs, Summer 1989, pp. 175-178.

National Center for Health Services Research and Health Ca Technology Assessment, DHHS Secta Sullvan Announces NCHSR Grants Totang $4 Millon for Patient

Research Activities,Outcome Research Assessment Teams, September 11, 1989

(special release).

National Center for Health Services Research and Health Ca Technology Assessment, DNR Order Differences Found for Patients with Comparble Prgnoses, Diferent Diseases, Deember 1989, No. 124, pp. 4­Research Activities,

National Center for Health Servces and Health Ca Technology Assessment, "Utization Review Reduces Hospita Inpatient Use and Expenditues, Research Activities, September 1989, No. 121 , p. 3.

Offce of Technology Assessment, "Physician Payment Under the Medcare Prgram: Problems and Changing Context, Paymentfor Physician Services: Strategiesfor

1986, Chapter 2, pp. 39-77.Medicare,

Park, Rolla Edwar, et al., "Physician Ratings of Appropriate Indications for Six Medcal American Journal of Public Health,and Surgical Predures, Vol.76, No. 7, July

1986, pp. 766-772.

PPOs: Insurers, Employers Get More Involved, Medicine and Health Perspectives, December 5, 1988.

Part B News,PROs Ease Pradmssion Review for Eveninglight Surgeries," Volume 4

Number 9, Apri 23, 1990, pp. 3-4.

Review Resources: Directory of a Newly Matue Industr," Utilzation Review.

Rice, Thomas, et al., "The State of PPOs: Results from A National Surey," Health Affairs, Winter 1985, pp. 25-39.

Robichaux, Mark, "Soarng Health-Car Costs Spur Entrpreneural Fever," The Wall Street

September 6, 1989, p. B2.Journal,

Roper, Willam L., M.D., "Perspetives on Physician Payment Refonn," New England September 29, 1988, pp. 865-867.Journal of Medicine,

Rosko, Michael D., "A Comparson of Hospita Perfonnance under the Panal-Payer Inquiry,Medcare PPS and State All-Payer Rate-Settng Systems," Sprig 1989, pp.

48-61.

Ruffenach, Glenn, "Denials of Medcal Claims Prvoke a Legal Backlash, The Wall Street Februar 13, 1990, pp. Bl, B4.Journal,

Rundle, Rhonda, "Hospitas Groups Try to Pull Off Cost Watchdogs," The Wall Street August 16, 1989, pp. Bl, B6.Journal,

Scanlon, Jack, and Neil Austin, "Bringig HMOs in Line with Cost Management Goals," December 1987, pp. 12- 17.Business and Health,

Schiffman, James R., "PPO Addess Overuse of Varous Procedurs, The Wall Stree Journal, May 30, 1989, p. BI.

Schiffman, James R., "Testing a Plan, Medicare Pains Georga Doctors, The Wall Street December 29, 1990, pp. Bl, B3.Journal,

Severity-of - llness," Part B News, p. 6.

Shalowitz, Debora, "Companies Adjusting Health Benefits: GAO," Business Insurance,

Februar 20, 1989, p. 82.

Shellenbarger, Sue, "As HMO Prmiums Soar, Employers Sour On the Plans and Check Out Alternatives, Februar 27, 1990. pp. Bl , B9.The Wall Street Journal,

Sisk, Faye Ph.D., "Lab Work for HMOs: Negotiating for Prfit, Avoiding Traps,"A.,

Medical Laboratory Observer November 1987, pp. 27-30.

Swobo, Fra, "Managing to Rein In the Expense of Health Cae," The Washington Post, Februar 11, 1990, p. HI.

Tokarski, Cathy, "Utilization Review Not Turing Up Much Long-Tenn Gain," Modern December 29, 1989, p. 30.Healthcare,

Traska, Mara R., "Medicaid HMOs: Endangered Species," Medicine and Health Perspectives, May 8, 1989.

S. Deparment of Health and Human Services, Offce of Inspector Genera, Offce of Beneficiary Satisfaction with Georgia s Medicare Carrier,Evaluation and Inspections,

OEI-04-90-01050, Februar 1990.

, "

Vibbert, Spencer, "Is Utilization Review Paying Off" Business and Health, Februar 1989, pp. 3-8.

Wendling, Wayne, and Jack Scanlon, "Seeking Cost Controls with Health Car Data, Business and Health, May 1988, pp. 34-37.

Whitmore, Julie, "Despite Minor Downtur, Moo Reviewer s Signs Goo, Crain Chicago Business, Vol. 12, No. 10, Week of March 6-12 1989.

Wiener, Janet Ochs, "Effectiveness: Another Name for Cost Control?" Medicine and Health Perspectives, October 9, 1989.

Winslow, Constace Monr, et al., "The Appropriateness of Perfonnng Coronar Anery Bypass Surgery," The Journal of the American Medical Association July 22/29, 1988, Vol. 260, No. , pp. 505-509.

Winslow, Ron Hospitals Rush to Transplant Organs - Bid for Prestige Triggers Debate on Perfonnance," The Wall Street Journal, August 29, 1989, p. B1.

Winslow, Ron, "Pentagon Sets Up a Pilot To Conquer High Costs, The Wall Street Journal, Februar 28, 1990, p. B1.

The Wall Street Journal,Winslow, Ron, "Rationing Cae, November 13, 19 9, p. R24.

Artur Young & Co., "CAPP Cae in Medcar Demonstration Project, PPO Postscript, April 1989, Vol. 7, No.