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ARCHIVED  April 1, 1997

Managed health care faces backlash

Over the last 10 years, managed health-care programs have grown dramatically, and now managed care is the biggest type of coverage in the state.

Managed care became popular because it seemed to be the answer to cutting health-care costs that were spiraling out of control. But when health care became more and more managed, people became frustrated and wanted to take back more control and make more decisions for their health care. They looked to the state Legislature for solutions, but government moves with a cumbersome gait, and it is not a panacea for solutions.

“About 60 to 70 percent of the people in the state are covered by a managed (health) care plan,´ said Jim Hertel, publisher of the newsletter “Colorado Managed Care.”

Problems began to surface, Hertel says, when “people discovered that someone other than their primary-care doctor was involved in their health-care service. So people are upset, and they want the Legislature to correct things. The legislative process does not lend itself to the health-care process.”

When people realized that with many managed-care policies, neither they nor their doctor could make decisions regarding referrals to specialists such as obstetricians, gynecologists, therapists or others, and that some preventive-care procedures were not covered by policies, many wanted changes.

“These are the most common areas the state has become involved with,” Hertel said.

Issues involving health care can be sensitive, and there are no easy solutions. Before managed care gained prominence, the health-care industry was on the brink of disaster.

“The specialists brought the health-care system to the edge of bankruptcy,” Hertel said. So now managed care has a network of doctors that they have contracted with to perform functions for a set fee. If the insured parties stay within the network, they can purchase health care for a reasonable price. If they go outside that network, it becomes more costly.

Health-maintenance organizations are the most tightly managed of all the health-care programs. They are managed through a gatekeeper or primary-care doctor, who must make referrals if the patient wishes to go to a specialist. The gatekeeper is there to stop unnecessary medical treatments and duplication of services.

But most importantly, the gatekeeper keeps costs down. Although there has been some backlash against the gatekeeper system, many believe it necessary to keep costs down.

“They won’t get rid of the gate keeper because it is so cost effective,” Hertel said.

This means that the ball is back in the legislature’s court, and like it or not, the state is another gatekeeper over the health-care process. No less than 551 health-care measures were introduced in the General Assembly during the first 40 meeting days of the 1997 session, including 515 bills and 33 resolutions. Some of these are only health-care related, while others will have a direct impact on the health care system.

None of the bills this year are designed to change or to regulate the gatekeeper system, and no changes are expected with using the primary-care doctor as the gatekeeper.

“I do know of people who want to go to any doctor they choose, but the purpose of managed care is to keep the cost down and quality and accessibility up,´ said Sandra Potter, issues manager for the Northern Colorado Legislative Alliance, a lobbying arm for the Fort Collins, Loveland and Greeley chambers of commerce. “Accessibility for small businesses has increased, so now more small businesses and self-employed people have access to health insurance.”

Although some problems exist with managed care, the state seems to have enough confidence in the system to propose placing Colorado’s Medicaid system into a managed-care program. Senate Bill 97-005 proposes to implement a statewide managed-care system with 75 percent of Medicaid recipients in managed care by the year 2000.

House Bill 1161 addresses the issue of denial of health benefits. The bill is a response to consumers wanting more information.

“Some people feel that companies have not been upfront with them,´ said Edie Dulacki, with the Johnston Wells Group. Dulacki is a spokesperson for FHP of Colorado Inc.

This bill basically says that a health plan shall not deny reimbursement, medical treatment or other benefits pursuant to utilization review, on grounds that such treatment or benefit is not medically necessary, appropriate or efficient, unless a Colorado licensed physician makes the final determination. The plan must provide written notice to a policyholder of denials within 10 days of denial.

“There has been a concern on the part of consumers that health-care plans that do not have a local review process had doctors or boards in other states making the final determination about paying for services, so they wanted a Colorado physician to make that decision and to send notification in writing in 10 days so there is documentation for an appeal,” Hertel said.

This bill was amended, and several insurance providers said they approve of the bill in its current form.

“We have no problem with this bill at all,´ said Jerry McElroy, a lobbyist with Kaiser Permanente in Denver. “We allow our doctors to make a wide range of decisions, and we believe that a doctor should make the final determination.”

Carl Miller, vice president of government relations and lobbyist for HMO Colorado, Blue Cross/Blue Shield of Colorado said, “We support this bill since it was amended.”

Miller also said that HMO Colorado and Blue Cross do not support House Bill 1122. This bill is potentially the most problematic bill for the health-care industry, and many in the industry see it as a can of worms.

The bill is designed to establish standards to assure network adequacy, provider accessibility and quality of health-care services under managed-care plans. Loosely translated, the bill wants to require health-care plans to provide specialists in the network, so those patients do not have to go out of network to find and pay for a specialist.

“This issue should be handled at the regulatory level at the division, but because there is political hay to be made, it is being handled in the state Legislature,” Hertel said.

“There are some serious problems with this bill,” Miller said. “There are some disincentives in this bill for small community doctors to sign with HMOs, and employers should be very wary of this bill because HMOs are an incentive to keep costs down.”

Miller said the groups he represents are opposed to this bill as well as to House Bill 97-1192, which would require small businesses to offer the same coverage for biologically based mental illness as they do for any other illness.

“This is a very legitimate goal, but this bill is a Pandora’s box and opens businesses up to everything,” Miller said. “We are opposed to this because it is an employer mandate, and we oppose all employer mandates. This could cost businesses over $39 million a year in increased health care.”

HMOs came under the scrutiny of the press about two years ago, partly because of the big salaries made by HMO officials and because of stock deals. Some of the problems with the health-care agencies took a long time to surface because, “Only about 5 percent of the plans’ members use about 65 percent of the services in any given year,” Hertel said, adding that these are only approximate numbers.

But Hertel points out that before managed care, health-care premiums were higher than employers could afford. So, to cut costs, health-care companies began to say doctors could not order any test they wanted or duplicate services.

The issues surrounding health care are complex, and people are leery of simplification when it comes to their health care. So at least in the foreseeable future, the state Legislature will continue to exercise a firm hand in the industry’s evolution.

Over the last 10 years, managed health-care programs have grown dramatically, and now managed care is the biggest type of coverage in the state.

Managed care became popular because it seemed to be the answer to cutting health-care costs that were spiraling out of control. But when health care became more and more managed, people became frustrated and wanted to take back more control and make more decisions for their health care. They looked to the state Legislature for solutions, but government moves with a cumbersome gait, and it is not a panacea for solutions.

“About 60 to 70 percent of the…

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