EFFECTIVE INTERACTION WITH U.S. MANAGED CARE ORGANIZATIONS
FOR PAIN MEDICINE SPECIALISTS
Richard L. Stieg, MD, MHS
Introduction
There appears to be little question that pain represents a significant American public
health problem. A recent Gallup poll reported that an estimated 26 million Americans
suffer with severe pain, with half of those reporting daily occurrence. Six in ten
Americans with severe or moderate pain have lived with the condition for at least seven
months. More than half report poor pain control despite having consulted with
physicians. Interestingly, four in five Americans believe that aches and pains are a
natural part of getting older, and 64% will see a doctor only when they cannot stand the
pain any longer. Fifty-five percent are uncomfortable with the idea of taking medications
for pain.1 Why then, in the face of such an obvious need for care, do pain specialists find
themselves in such a struggle for survival? While there are numerous reasons, some of
which will be detailed elsewhere in this symposium, this paper will focus on managed
care and the role it plays in denying access to pain patients.
What is managed care?
The social and economic forces that have combined to create the present chaos in
American health care are complex. Among those forces was the societal determination
that medicine delivered in the old fee-for-service model was becoming too costly,
whether it was underwritten by employers, self-paid patients, government, or any other
payer source. In this setting, a whole variety of cost-cutting mechanisms began to
develop under the rubric of “managed care.” According to E. F. X. Hughes, MD,
Professor of Business at Northwestern University, managed care is nothing more than the
application of standard business practices to the delivery of health care in the tradition of
the free enterprise system.2 Managed care organizations that deliver such care (e.g.
HMO’s and PPO’s) are nothing more than expressions of that process. Because there are
so many permutations in a constantly changing environment, “managed care” really
defies precise definition. It generally refers to any situation where health care is
organized and delivered to individuals who are enrolled in health plans (whether that be
traditional health insurance, Medicare, Medicaid, Worker’s Compensation, etc.), so that
more cost-effective and (ideally) high quality care can be accessed and achieved. That is
supposed to be accomplished by how the plan influences the selection, utilization of and
access to products and services from contracted providers.
Types of managed care
It is useful to broadly define two kinds of managed care that exist today: risk-based and
non-risk-based.3 In the latter, managed care organizations attempt to coordinate and
channel the use of health providers and services to achieve desired success and outcomes
while controlling costs. Such techniques as pre-authorization, copayment, utilization
management, and the use of select network physicians are common. Providers may be
paid under this system in a contractually determined fee-for-service or discounted feefor-service model, and access to specialists is controlled by the utilization management
structures of the plan. In the risk sharing type of managed care, the technique of shifting
the burden of controlling costs is operationalized by asking providers to take a capitation
fee and/or other incentive arrangements. Within the plan, various providers may be paid
in a variety of ways; commonly, the primary care physicians accepting capitation
payments while specialists work under a fee-for-service type of arrangement. These two
general models of managed care are seen with increasing penetration in all areas of the
country and in all payment venues.
Stages of managed care
The managed care market place is traditionally discussed in the literature as existing in
five stages.3 Each stage represents a developmental process with specific markers for
each stage. They are as follows:
Stage 1: Unstructured
In this stage, there is almost no managed care. Hospitals and physicians function
independently with few if any affiliations or consolidations. Utilization is high,
and overuse of inpatient care and over-supply of beds is common. Payment in
this system is usually fee-for-service. Managed care organizations account for less
than 25% of the insurance market.
Stage 2: Loose alliances
In this stage, consolidations and affiliations of hospitals and providers begin.
Some forms of discounted fee-for-service and capitation may appear. Purchasers
have more options and power. Managed care organizations account for 25-50%
of the market.
Stage 3: Consolidation
Recognized consolidated structures such as HMO’s and PPO’s appear. More risk
sharing arrangements, including capitation, occur. Integrated hospital systems
and physician-hospital organizations begin. Doctors begin to form multi-specialty
and single specialty groups.
Stage 4: Competing systems
Managed care accounts for more than 50% of the market. There is little fee-forservice. A few large coalitions dominate the market. Providers and insurers
align. They use the development of networks, often leaving behind solo practice
physicians. Specialists’ fees drop, and pressure is put on primary care physicians
to manage utilization. Pressure is also put on hospitals to lower inpatient
utilization and increase outpatient utilization.
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Stage 5: Integrated delivery partnerships
Various managed care networks begin to form partnerships with purchasers.
Emphasis now focuses on population management. Physicians are asked to
assume even more risk.
Developmental stages of managed care vary geographically. Some areas are
experiencing a regression from more to less developed managed care systems as health
care organizations fail. Resistance on the part of physicians to managed care generally
falls with increased maturation.
Why pain specialists need to be involved in managed care
Many long for the old ways of practice, but Millenson,4 among many others, points out
that this “golden age” was not really so golden. While it was true that physicians were
free to use their best clinical judgment, and to use unusual or investigational treatments if
they thought it was in their patients’ best interests, and while patients were free (if they
had the requisite financial resources) to choose their own physicians, there were some
significant missing ingredients. For example, there were few incentives (the public
health sector excepted) for population-based diagnostic testing, preventive care, quality
control, or development of outcomes-based medical treatment guidelines. There is ample
evidence today that such measures are needed because, left to their own devices,
physicians apply their skills with little uniformity. In the field of Pain Medicine, for
example, it has been pointed out that there is great ambiguity in highly variable
definitions, assessment methods, practice pattern and treatment preferences with respect
to musculoskeletal back pain.. There is equally distressing evidence for tremendous
variability in utilization of surgery for the treatment of chronic back pain based only on
geography.6
Given those kinds of information, there is little reason to believe that this same variability
and between-physician reliability in making clinical judgments does not exist for all types
of clinical pain practice. Therefore, I believe that it behooves pain specialists to become
involved with those medical organizations that are interested in developing the kinds of
information that is necessary to bring about less variability in practice patterns and better
quality outcomes. The question then arises: Who has the best resources and the most
interest in doing so? I would argue that all payer sources, including the federal
government, have some degree of interest but are limited not only by available financial
and human resources but also by lack of claims information that can help them to even
begin to understand the prevalence and cost of the pain problem within their own system.
I will discuss that further under the section entitled “Talking with managed care entities.”
For now, suffice it to say that there is merit and value in dealing with managed care
organizations that may also represent the source of payment in order to educate them
about your patient’s needs.
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I believe that only pain specialists, acting through their local and national professional
organizations, have the interest and can develop the resources necessary to tackle the
problem of pain treatment within our American health care system. Before discussing
how, let’s first turn to some economic realities.
Economic forces and clinical restraints to pain care
“Managed care” has evolved as previously discussed because of a perceived need to
control costs and quality of health care delivery. That need has been driven by a variety
of factors, including an aging population, the development and proliferation of new
technologies (both in communication and in health care products), absence of treatment
guidelines to ensure more uniformity and delivery of care, and insufficient data on
treatment effectiveness. The general feeling about scarcity in available financial
resources is coupled with the kinds of attitudes that were previously discussed in the
Gallup study, which equally apply to Americans working in the managed care industry as
they do to patients. Among these attitudes is that pain is a part of life, will be poorly
controlled and will require medical attention only when out of control. It is going to take
education of the public and the health care industry at large to realize that this does not
have to be. There is a growing cadre of pain specialists that can help to relieve suffering
earlier, more effectively, and with more judicious use of resources. The American
Academy of Pain Medicine, which has the most vested interest in creating a new public
perception about pain, is becoming better organized and may be able to play this
important societal role.7
It is foolish to believe that the economic forces shaping the American health care scene
operate independently of the global economy. Most of American health care is now
underwritten by the federal government or by employers. As the health of the economy
goes, so goes the interest and resources to deal with societal issues such as health care.
Government officials and business executives will never have the interest that pain
specialists do in tackling the public health problem of pain, especially in times of
economic stress. It is therefore incumbent upon us, the specialists, to evolve new and
creative ways to deal with the problem. For now, that means necessarily interacting with
the managed care industry on both an individual level and through our professional
organizations.
Talking with the managed care industry: options for pain medicine specialists
Largely because of their training and practice patterns, physicians have been generally
unsuccessful in organizing themselves for positive action when they are threatened.8
Their efforts to do so have largely been reactionary to the forces of change. Curling up
into a fetal position and thinking about the evils of “managed care” serves no useful
purpose and alienates medical professionals, even driving them away from their calling.
Taking a more proactive stance, on the other hand, requires courage, fortitude, acquisition
of knowledge and, above all, a willingness to develop trust and cooperation within the
profession.9 It is going to be easier to withstand the buffeting winds of an ever changing
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managed care world if you are armed with knowledge and united for action.7 Here are
some of your options:
(1) Physicians in increasing numbers have been acquiring business and leadership
skills not learned in medical school. For example, the American College of
Physician Executives, numbering in the thousands and holding a seat in the
American Medical Association’s house of delegates, represents this new class
of professionals, most of whom maintain their interest in clinical medicine by
spending at least part of their time in practice.10 PAIN SPECIALISTS
SHOULD ALIGN THEMSELVES WITH BUSINESS-ORIENTED
DOCTORS AND LEADERS. Some work in the managed care industry and
are usually much more accessible than is generally perceived. They often
represent your contact point as you attempt to deal with organizations on an
individual level. Others have assumed positions of leadership in the medical
community or function as consultants to their colleagues. If you do not have
time to develop the requisite business skills yourself, use them and learn to
trust that the majority of them share your concerns about health care and your
ability to survive the current environment.
(2) TAKE THE TIME TO EDUCATE YOUR MANAGED CARE
CONTACTS about their exposure to pain. This requires non-billable time on
your part. Use information like the Gallup poll that was discussed earlier in
pointing out to managed care contacts the unseen problem they likely have
within their population, and the needs of your patients and indicate your desire
(and it had better be genuine) to work with managed care professionals
cooperatively to try to find solutions to helping the needy to access your
services without having to sacrifice much of your own income in the process.
This is tricky business that is usually best accomplished by aligning yourself
with knowledgeable business consultants. Few doctors in private practice
have the time or financial resources to do this successfully on their own. The
solution? To consider creating/joining networks of either multi-disciplinary
or same-specialty physicians who can pool their resources and hire the
prerequisite consultants to get the job done.
(3) Along with the need to educate the managed care industry and the
practitioner’s own medical and lay community come corollary issues: the
need to learn how to negotiate managed care contracts, the need to learn how
to create value in the mind of the payer for the services that you render, the
need to help create outcomes information that is meaningful to both lay and
business communities and the need to structure one’s own practice, whether it
remains solo or in a group, in such a way as to maximize your services and
break down the barriers of access to your care for people in pain.7 YOU
MUST HIRE BUSINESS CONSULTANTS IF YOU CANNOT
ACQUIRE THE SKILLS YOURSELF if you are going to effectively
survive the current environment.
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(4) Your world has changed right before your eyes. The old fee-for-service
model, unencumbered by any kind of oversight, is dead forever. The health
care scene will continue to change unless the government steps in (very
unlikely in the U.S.) to impose a single payer system. If you are going to be
successful, then MAKE A COGNITIVE SWITCH. Realize that populationbased disease management (an old public health concept now being
revitalized), use of medical treatment guidelines, risk sharing, utilization
management, creation of meaningful outcomes measures based on emerging
informatics technology and other “managed care” techniques are here in some
form for your lifetime. DEAL WITH IT. If you believe, as I do, that change
is an opportunity rather than an insurmountable challenge, then rededicate
yourself to your profession and to your patients and decide to find ways to
continue caring for them in the current environment.
(5) If you have not already done so, JOIN THE AMERICAN ACADEMY OF
PAIN MEDICINE. The organization is working very hard to represent Pain
Medicine specialists effectively, to develop the necessary human and financial
resources to educate the public about the needs of people in pain and to help
shape the future of American health care in ways that will allow better ways to
access pain specialists. They need your help in becoming part of this
worthwhile effort.
What is the future of managed care?
Most futurists believe that the current marketplace cannot solve the health care delivery
system.11, 8 It is very likely that the system will “re-size” and reconfigure itself in
response to true consumer market pressures,12 and we are already seeing that in the form
of a vociferous “managed care backlash” in the media and in the halls of Congress. The
best that can be said about the future of health care in America is that it is uncertain and
that several scenarios are possible.13, 7 This future in part can be successfully changed by
the individual and collective efforts of pain specialists who should have the interest of
people in pain close to their hearts. It is time to stop complaining and to start acting in
keeping with your calling as part of a very special, talented, and dedicated group of
physicians.
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References
1. “Pain in America.” A research report prepared for Merck. April 2000.
2. Hughes, E. F. X. “Managed care.” Address to the Colorado Medical Society;
February 18, 1999; Denver, Colo.
3. Tindall, W. N., et al. “Paving the pathway to managed care medicine.” An online
CME unit from the American College of Managed Care Medicine and the National
Association of Managed Care Physicians:
http://www.hcmcm.org/CME/Pathway_Course_1.htm. January 2000.
4. Millenson, M. L. Demanding Medical Excellence. Chicago, Ill.: University of
Chicago Press; 1997.
5. Chidnall, G. T., Dabney, A., and Tait, R. C. “Internist judgments of chronic low back
pain.” Pain Medicine 1 (3) 2000. (In print)
6. Wenneberg, J. E. “Practice variations and challenge to leadership.” Spine 21: 14721478, 1996.
7. Stieg, R. L. “Financing the treatment of chronic pain: Models for risk sharing among
pain medicine physicians, health care payers, and consumers.” Pain Medicine 1 (1)
78-88, 2000.
8. Van Amerongen, D. Networks and the future of medical practice. Chicago, Ill.:
Health Administration Press; 1998.
9. Gosfield, A. G. Quality and clinical culture: The clinical role of physicians in
accountable health care organizations. Chicago, Ill.: American Medical Association;
1998.
10. Moff, T. “The New Breed.” Physician Exec 23 (8) 31-36, 1997
11. Relman, A. S. “The future of medical practice.” Physician Exec 22 (1): 23-25, 1996.
12. Herzlinger, R. Market Driven Health Care. Redding, Pa.: Perseus Books; 1997.
13. Coddington, D. C., Moore, G. P., Fischer, E. A., and Clarke, R. L. Four health care
scenarios. Beyond managed care: Financing and marketplace scenarios for the new
millennium. Philadelphia, Pa.: McGraw-Hill; 2000.
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