Just a year ago, Washington policy-makers looked to managed care as one of the best solutions to the rising costs of Medicare.
Even as it reduced Medicare spending by $115 billion over the next five years, the Balanced Budget Act of 1997 envisioned that the number of beneficiaries enrolled in managed care would nearly double during the same period, to around 27 percent of all seniors.
Today, there are signs that the government's goal of quickly increasing the number of health plans available to seniors was overly ambitious.
In fact, the managed care industry appears to be having serious doubts about its capacity to care for Medicare beneficiaries without going broke, and more and more companies are withdrawing from the program. In Maryland, Aetna, Prudential and Rockville-based Mid Atlantic Medical Services (MAMSI) plan to close their Medicare health plans by the end of the year.
Nationally, Medicare managed care plans offered by PacifiCare, Oxford Health, Kaiser Permanente, Anthem and other large companies have pulled out of 371 counties across 29 states and the District of Columbia, affecting more than 400,000 beneficiaries.
Why are we seeing such turmoil in a program that successfully cares for the vast majority of Medicare's 39 million beneficiaries?
The answer, in part, lies in the care needs of the small number of very aged or very ill Medicare patients who generate extraordinary costs. In fact, about 10 percent of beneficiaries cost Medicare an average of $37,000 per person per year, and they account for nearly 70 percent of the program's total expenditures.
In the past, many managed care plans avoided these high-cost patients like the plague, carefully tailoring their marketing and "extra" benefit incentives to attract younger and healthier Medicare subscribers. And, realistically, who could blame them? With the government planning to pay from about $6,000 to just about $8,000 next year for all the health needs of an aged or disabled beneficiary in a Medicare managed care plan in Baltimore City or County, it is apparent that caring for even a relatively small number of enrollees with chronic or multiple or terminal illnesses could quickly explode a health plan's budget.
Addressing the problem
So, how can this problem be addressed? When a Medicare beneficiary has cancer and diabetes, or congestive heart failure and Alzheimer's, or a broken hip and a chronic lung disorder, how can we ensure that all of the patient's care needs are met, and do so without bankrupting Medicare?
The solution is not in the traditional cost management strategies of managed care. All too often the use of "gatekeepers" and pre-certification and telephonic utilization review and limited provider panels succeeds only in making the patient with complicated and serious health problems feel driven from pillar to post, and left not only ill-served but confused, frustrated and angry.
Part of the answer is to focus on what Medicare patients with serious (and expensive) illneses really want. To put the patient - not the health plan - at the center of the care system. And then, as the United States Senate Special Committee on Aging recently heard from former first lady Rosalyn Carter and others, to help these elderly patients and their families to make thoughtful, well-informed decisions about which treatment options and which available services and supports are best for them.
Research is beginning to suggest that when provided good information by a care coordinator or consultant who has no incentive to deny care, patients facing serious and complicated illnesses may make quite different decisions than the managed care reviewer who sees the situation as forcing the health plan to decide between, or ration, various high-tech, high-cost interventions.
For instance, a study from Dartmouth reports that men who were given assistance to review for themselves the scientific evidence concerning various treatments for prostate cancer were more likely to choose "watchful waiting" than surgery. Similarly, advanced cancer patients given individualized education and face-to-face support by a nurse case manager in a voluntary program were more likely to choose radiation therapy to relieve pain instead of a course of chemotherapy intended to "cure" the disease, when compared with managed care plan patients who did not receive such additional assistance, according to a study from Franklin Health, a care management company that works with insurers and health plans nationwide.
When enlisted as responsible partners in medical decision making, Medicare patients with serious illnesses are likely to choose care that appropriately matches their concerns: that focuses on managing pain and other symptoms, that maintains independence and quality of life, that aims to prevent dying alone and in a hospital.