[Poverty at Issue]

A Newsletter for Individuals Concerned About Poverty in Missouri

Summer 1996

In this issue:

Understanding Our Changing Health Care System

Single-Payer Health Care

Change Afoot for Missouri Medicaid Recipients

How to Deal with Managed Care

Health Care Issues for Rural Missouri

Drug Companies Offer Free Prescription Assistance

I recently sent some of you a brief survey about this newsletter. When I asked about topics you wanted to have covered, health care emerged as the topic of choice. Health care is changing so rapidly that consumers face a challenge just to keep up with the jargon. Making health care decisions in an environment of rapid change is a challenge for all Missourians, but particularly for those who struggle just to meet basic needs.

This Poverty At Issue examines health care in Missouri. It provides information on some basics of managed care. Growing numbers of Missouri Medicaid recipients are being moved to managed care. This Poverty At Issue discusses the process. There is also discussion of how change in health care affects rural Missouri. Ed Metzen, who chairs the UMC Consumer and Family Economics Department, expresses his views about a single payer health care strategy. Tips for consumers of managed care are offered as well. A health care plan comparison worksheet is enclosed. Gail Carlson, Health Education Specialist for University Extension, deserves a special thank you for all the information she provided for this issue.

I hope you find the information helpful.

Brenda Procter
Consumer and Family Economics Specialist

Managed Care

Understanding Our Changing Health Care System

Rising health care costs over the last 30 years resulted in a call for health care reform. While legislative reform has been slow, "market-driven" reform is occurring. As a response to growing concerns expressed by businesses and by the Federal and state governments, the health care industry is reorganizing itself to control costs. Managed care is the result.

What is Managed Care?

Managed care is a system of health care that controls cost of services, manages the use of services, and measures the performance of health care providers. There are different types of managed care plans. Two of the most common types are Health Maintenance Organizations (HMOs) and Preferred Provider Organizations (PPOs). Most others are hybrids of the two. Since plans are different, knowing the details of your specific plan is important.

Managed care is both a health care financing and a health care delivery system. A plan typically guarantees 24-hour, seven-day-a-week access to health care for its members. The plan member selects a primary care physician from a list provided by the plan. Members who use providers not on this list will usually pay more for health care. Usually, a primary care physician coordinates all care for a patient. It is estimated that 90% of a patient's medical care can be handled at the primary care physician's office. The primary provider helps the patient identify and schedule appointments with any needed specialists.

How Does Managed Care Reduce Costs?

Managed care plans contract with health care professionals and agencies, and insurance companies. Those under contract become linked into a network that provides services to plan members. Each member receives care for a fixed amount (say, $12 a month). This is called "capitation." The plan is paid per person rather than for each visit or each type of service. Whether the member never sees the doctor or makes 20 visits, an employer contracts with a plan to pay this fixed per member charge for its employees. Medicaid and Medicare programs also sign contracts with these plans. Some plans charge members a small $5 to $10 co-payment for each visit.

Managed care plans also control costs by setting criteria for selecting providers and by establishing formal programs to monitor the amount and quality of care being given. Utilization review is one common monitoring strategy. Except for emergencies, doctors are often required to get approval from the plan before hospitalizing a patient or before providing expensive tests and procedures.

What Are Some Concerns About Managed Care?

Much less is known about other managed care models, but research shows that HMOs are achieving cost savings. They do this by controlling and managing both the use and the provision of services. While this is one advantage to managed health care, critics point to disadvantages.

Critics argue that managed care may result in too few services being provided. Others counter that as networks mature and gain experience, they realize that providing too few services may, in fact, result in increasing costs eventually. Patients who are not treated early and effectively, frequently require more costly and extensive follow-up care.

Another concern is that managed care restricts patients' "free choice" of providers. Choice is sometimes restricted because employers offer only one plan to employees. If a patient's current doctor is not enrolled in an employer's plan, then the patient must select a new primary care provider who is linked to the plan's network. Under some plans, choice is further restricted because the primary care physician must approve visits to specialists.

Critics also point out that a reliance on managed care does not address the issue of access to health care services for all citizens. Nationwide, 16% of the non-elderly have no health insurance, public or private. Most uninsured Americans live in families with at least one working adult. Not surprisingly, the uninsured have a higher incidence of late stage diagnosis of life-threatening disease. They have higher death rates as well.

In many rural areas, population is not dense enough to support a full range of health care services. Rural communities are already having difficulty recruiting and keeping doctors. Managed care just increases the competition. A few HMOs serve rural areas, but in recent years there has been little development of new managed care plans in rural America.

Adapted from Managed Care, Understanding Our Changing Health Care System, by Gail R. Carlson, MPH, Ph.D., Health Education Specialist, University Extension, University of Missouri-Columbia.

A Brief Explanation

Single-Payer Health Care

by Edward J. Metzen, Chair, UMC Consumer and Family Economics Department

Single-payer health care is simply a system in which the government is the avenue for financing all health care. It is not socialized medicine; providers of health care services need not be government employees. Health facilities need not be owned by the government. Single-payer is merely a system for financing the care provided. Rather than sustaining the inefficiencies of the hodgepodge non-system that prevails in the U.S., the single-payer system creates efficiencies in the financing aspect of health care. This leaves more funds available to fund the care itself.

Under a single-payer system, individuals can have at least as much choice in selecting physicians and medical facilities for their care as we have under the current "managed care" system that is rapidly taking over today. Patients in "managed care" systems are restricted by those plans with regard to the doctors and medical facilities from whom they may obtain their care. A single-payer, not-for-profit system could provide greater freedom of choice in this matter than many individuals have under their current health care plans.

A single-payer system would provide universal coverage. If adequate health care is regarded as a right of every citizen, a universal single-payer system is the simplest means to meet that societal objective. Health care protection under a single-payer system is totally portable and not dependent upon one's employment. Under such a system, an individual need not worry about health care coverage when he or she changes jobs, is laid off or terminated from a job, or retires. There is no longer worry about being denied health care because one is poor or has a health problem. There is no longer fear of one's employer eliminating or reducing health care coverage on employees.

Single-payer health care is financed through taxes or a combination of taxes and individual premiums. But the problems of individuals and families being without health care coverage, and the inefficiencies involved in financing the current non-system, would be eliminated under a single-payer arrangement. Thus a single-payer system makes it possible to apply more resources to health care services, providing more and improved quality health care for all citizens.

Managed Care Plus

Change Afoot for Missouri Medicaid Recipients

By January 1997, some 231,000 Missouri Medicaid recipients will be clients of Managed Care Plus (MC+). MC+ is Missouri's new managed care system designed specifically for Medicaid patients. Eligible recipients are given the opportunity to choose among private plans under contract with MC+. If they do not choose a plan, Missouri Division of Medical Services assigns them to one. According to Gary Stangler, director of Missouri's Department of Social Services, MC+ will save approximately $25.5 million in Medicaid costs next year statewide.

To be enrolled, a person must meet income guidelines, be receiving AFDC, be pregnant, or be a child in the legal custody of the State. Elderly people, those eligible for both Medicare and Medicaid, and those in nursing homes or institutional care, are excluded from the MC+ program. Children receiving Supplemental Security Income disability benefits are not required to be in MC+. Children on SSI disability can be disenrolled from MC+ by calling the plan provider. They can then be covered under the fee-for-service program once used by all Medicaid recipients.

The statewide MC+ process began in September 1995 in the St. Louis area when the State enrolled more than 150,000 people and began receiving services from seven competing MC+ providers. The second phase began in October 1995 when they awarded three plan contracts in central Missouri. In January, approximately 30,000 Medicaid clients in an 18-county central Missouri area began enrolling. Central Missouri counties include Chariton, Randolph, Monroe, Saline, Howard, Boone, Audrain, Pettis, Cooper, Moniteau, Cole, Callaway, Montgomery, Morgan, Camden, Miller, Osage and Gasconade.

By January 1997, four managed care plans will serve about 87,000 Medicaid clients in a seven-county area of western Missouri. Enrollment begins for them in October. Western Missouri counties covered include Platte, Clay, Ray, Jackson, Lafayette, Cass and Johnson. Also by January, two plans will serve 19,000 clients in northwestern Missouri. The northwest Missouri plans cover 16 counties_Andrew, Atchison, Buchanan, Caldwell, Carroll, Clinton, Daviess, DeKalb, Gentry, Grundy, Harrison, Holt, Livingston, Mercer, Nodaway and Worth.

When implementation in all four areas is complete, approximately 48% of Missouri's Medicaid recipients will be receiving services through MC+. MC+ Enrollment Counselors are no longer available at local DFS offices. You can call the MC+ Helpline at 800-348-6627 (TDD 800-563-6386 for the hearing impaired) for enrollment information.

Be an Informed Consumer

How to Deal with Managed Care

Read and fully understand all the written information given to you by your HMO, PPO, or other managed care plan. It is very important to check for differences among plans if you have a choice of plan providers. Depending upon your particular situation, one may have an advantage over another. For example, your current doctor may be under contract with one plan, but not with another. Even if you don't have a choice of managed care plans, knowing all your rights and responsibilities matters. It gives you confidence to be assertive if you need to negotiate.

Before making any decisions, find out the amount of the plan premium (amount you pay for coverage) and yearly deductible (amount you must pay before insurance coverage applies). There is usually no deductible in an HMO. A co-payment is the part of a claim or expense that you must pay_usually a fixed amount, say $5-$15, per expense or visit. Ask about co-payment amounts for hospital or doctor visits, prescription drugs, ambulance service, medical supplies or any other services requiring a co-payment.

Think through your family's pattern of health care use. If someone in the family has a chronic health problem requiring frequent office visits or recurring expenses, take a look at payment structures. A low co-payment on a recurring expense might give one plan an advantage over another, given your unique situation. It might be a good idea to look over last year's medical records to help you understand how a plan might affect you.

Procedures, policies and services may vary among MC+ providers. MC+ Enrollment Counselors are no longer available through local DFS offices to help Medicaid recipients comparing competing MC+ plans. Always ask plan providers for an explanation of anything you don't understand. MC+ plans have internal grievance procedures, explained in their handbooks. Grievances can be appealed to the Missouri Division of Medical Services by calling 800-392-2161, or by writing P.O. Box 6500, Jefferson City, MO 65102-2161.

While nearly half of Missouri Medicaid recipients will have no choice about accepting MC+, they will have a choice of plans in their geographic areas. Call the MC+ Helpline at 800-348-6627 (TDD 800-563-6386 for the hearing impaired) to find out which plans are available in your area.

Enclosed with this newsletter is a single-page handout that includes a worksheet to use when comparing managed care plans. It also contains a condensed version of Managed Care: Understanding Our Changing Health Care System. For more detailed information about managed care, contact Gail R. Carlson, MPH, Ph.D., Health Education Specialist, Continuing Medical Education, 117 Old Alumni Center, University of Missouri, Columbia, MO 65212; 573-882-4107; carlsong@ext.missouri.edu.

To voice your views on managed care, contact the Joint Interim Committee on Managed Care, Rep. Tim Harlan & Sen. Joe Maxwell, Co-chairs, State Capitol, Rm. 324, Jefferson City, MO 65101; 800-582-2196.

Health Care Issues for Rural Missouri

A recent report by the Rural Policy Research Institute (RUPRI) Expert Panel on Rural Health Delivery, documents market-based changes in health care. The report, Changes in the Health Care Marketplace: What is the Future for Rural Health Care Delivery?, was prepared to inform public policy discussions. It identifies implications of change for the future of rural health care delivery.

The report identifies several implications of changes in health care for both Federal and State policy makers to consider. Federal policy makers need to address the following issues:

State policy makers, according to the report, should consider the following:

For a free copy of the full report, contact the RUPRI Office, University of Missouri, 200 Mumford Hall, Columbia, MO 65211; 573-882-0316, 573-884-5310 (FAX);rupri@muccmail.missouri.edu.

Drug Companies Offer Free Prescription Assistance

Many pharmaceutical companies have programs that provide prescription medicines free of charge to physicians whose patients might not otherwise have access to the medicines they need. For a free company-by-company directory of such programs, contact the Pharmaceutical Research and Manufacturers of America, 1100 Fifteenth Street, NW, Washington, DC 20005; 800-762-4636. Ask for the Directory of Prescription Drug Assistance Programs

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Jeanne Bintzer, HES Extension Site Administrator

Brenda Procter, Consumer and Family Economics Specialist, Content Provider