The term "managed care organization" carries ominous overtones for health-care providers.
But in the new era of health insurance coverage — as money becomes tighter and bureaucracy more complex — it is a term we'd all better start getting used to, like it or not.
That was the message at a panel discussion at the three-day Associated Auxiliaries of Jewish Homes for the Aging symposium at San Francisco's Golden Gateway Holiday Inn.
During the conference, medical administrators helped representatives from Jewish homes from all over North America address future trends in managed care.
Managed care organizations are more cost-effective than old insurance carriers, since they set an automatic cap on expenses.
But as MCOs force medical-care providers to watch the bottom line, "something has to suffer" in health-care services, said panelist Dr. Bernard Blumberg, chief of medical services at San Francisco's Jewish Home for the Aged.
"The care will not be as superior as it was in the 1980s and early 1990s," Blumberg said.
The term "managed care" covers a number of different health-insurance coverage systems, including health maintenance organizations, independent physician-practice associations, foundations for medical care and preferred provider organizations.
These all monitor patterns in the health-care system with an eye toward cost-effectiveness, accessibility and quality. They then provide a set amount of money per patient to health-care providers — hospitals, nursing homes and independent doctors.
After that funding runs out, health-care providers will have to parcel out resources. Doctors and other caregivers must do the best they can within reduced circumstances, Blumberg said.
According to the old system, pervasive from the 1960s to the 1980s, insurance companies paid whatever fees doctors charged for specific services.
We can expect managed Medicare in the near future, said panelist Jerry Levine, executive director of San Francisco's Jewish Home for the Aged.
But managed care systems may cause ethical conflicts between patients, doctors and institutions, Levine added.
For one thing, if a general practitioner wants to send a patient to a specialist, the general practitioner may have to get approval from the health-care company he works for before he can even discuss his concern with the patient, Blumberg said.
If the company does not approve the referral, the doctor might not even be able to tell this to the patient, since it would reflect badly upon the doctor's employer.
Nursing home officials also worry that if doctors receive a certain amount of money for each nursing-home patient assigned to them, then doctors make more money by spending as little time with each patient as possible.
Panelists emphasized, however, against running away in a panic from managed care, and advised them rather to engage it, study it and, if possible, shape it.
"Managed care organizations are to be learned from, not feared," Levine said.
Panelist Kenneth Levitt, administrator and CEO of the Jewish Home for the Aged of British Columbia in Vancouver, explained how Canadian health providers have been addressing the evolution of health care in a tight economy.
Although Canada does not yet have a managed care system, Levitt's experience of dealing with Canada's health-care bureaucracy facilitated his advice to American counterparts as the U.S. government reshapes the current system.
Complaining about inequities doesn't help, Levitt said. But collective action and proactive lobbying for legislative remedies does help.
Already, a union of 35 denominational Canadian nursing homes — including Jewish, Catholic and Lutheran homes — has ensured that Canadian law allows room for religious medical facilities.
Levine took a more commercial approach with his advice, however, envisioning a coming era in which health-care providers will have to operate more like businesses.
"Don't have a knee-jerk reaction and follow the trends," he said.
Neither mimic the competition nor pattern plans around past practices, Levine suggested, telling his audience instead to base decisions on what is now apparently a doctor's newest medical instrument: market research.