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Ed Weisbart: Managed care is a model that’s had its day.

July 26, 2019

Topics: Quote of the Day

By Ed Weisbart, M.D., C.P.E., F.A.A.F.P.
American Association for Physician Leadership, July 25, 2019

In the nearly ten years since I retired as chief medical officer for a large pharmacy benefit manager, it seems my perspective has shifted.

Before I left, I remember a discussion bemoaning the public’s increasingly critical view of managed care. We valiantly searched for a narrative to bolster our industry’s image.

The best example we found was about an insurer that helped a patient switch from the non-formulary drug her physician prescribed over to that insurer’s preference. We were all proud that the insurer had done extensive patient outreach and care coordination rather than just deny the pharmacy claim. While patting ourselves on our backs, we failed to recognize that the very existence of our fragmented insurance industry was the reason the patient needed to take something other than her physician’s first choice.

I was reminded of all of this when I read Erik Sherman’s “Sudden Medical Bills Surprising, But No Fun” in the May/June 2019 Physician Leadership Journal. Sherman has documented many of the symptoms of our fragmented system, and then recommended multiple solutions whose “effort, costs, and time commitment would be significant.” The entire strategy is based on making it easier for patients to understand their out-of-pocket costs, so that it would be “easier to collect,” in the words of financial advisor quoted in the article. This advice flies in the face of the fact that millions of Americans already declare bankruptcy from overwhelming medical bills despite having insurance when they get sick.

There’s nothing in Sherman’s article addressing our nation’s unsustainable cost trends, the fact that financial barriers keep so many Americans from healthcare, or the professional burnout created by needless administrative complexities. Instead, his proposal would add even more administrative complexity and waste. As any student of Deming and Juran can tell you, complexity is the enemy of quality.

Enough, I say, and most Americans agree.

Managed care is a model that’s had its day, if there ever really was one.

“Surprise medical bills” and “balance billing” are consequences of this fragmentation. They point to the need for us to build a single national health program, insuring every American with comprehensive first-dollar coverage. With this being the insurer for every American, virtually every physician and hospital would be “in network” and the surprises and unaddressed balances would fade into the dust heap of history.

The simplicity and success of this approach has been demonstrated around the world and resonates with patients and physicians alike. Indeed, ever since 2001 there has been a net migration of American physicians into Canada. Every year since 2004 there has been a net repatriation of expat Canadian physicians. Dr. Trina Larsen Soles, president of Doctors of British Columbia, describes practice in Canada as “It’s not a big hassle. I can focus on patient issues, not administrative issues.” Compare that to Dr. John Cullen, at the time president-elect of the American Academy of Family Physicians, who described American medical practice as “An incredible bureaucratic mess to get anything done for patients.”

It is time to move away from the convolutions and contortions that define this uniquely American industry, get rid of these intermediaries, and switch to the American system with the lowest overhead, consistently high levels of popularity, and extends our life expectancy.

Let us build our solution upon traditional Medicare (Parts A and B): eliminate the copays and deductibles; add in coverage for pharmacy, optometry, dentistry, and a few other critical elements; and fully fund our national health insurance through an equitable public funding mechanism rather compound overwhelming illnesses with overwhelming financial burdens.

With these improvements, there would be no market for supplements or Advantage plans. According to dozens of economic analyses, the savings from reduced administrative overhead and more consistent pricing would mean that the vast majority of Americans would spend less on healthcare. And be put back in control of their own healthcare decisions.



By Don McCanne, M.D.

My father, my two brothers and I joined together in a traditional general practice (in the days before “family practice” was a discipline). In 1966, the implementation of Medicare and Medicaid (Medi-Cal) was a godsend. We were able to obtain more essential services, especially specialty care, for our patients, though the instability of individual insurance coverage and employer-sponsored plans remained a problem (60 million people leave their jobs each year!). Referrals of the uninsured and undocumented were often very difficult, though a few specialists did share our views on health care justice.

But then managed care entered the picture. Awful! The plans were very successful in erecting barriers to care. It was so bad that we eventually welcomed EMTALA which enabled an enforced referral by sending our patients to the emergency department of the hospital. Talk about a terrible way to practice medicine, not to mention the damage it did to the previously collegial relationships between physicians. In Orange County, even Medi-Cal was split up into multiple managed care organizations. (An example of how that worked out: There was only one authorized psychiatrist on my list who happened to be an octogenarian who had practiced in the opposite end of the county far away from my patients, but who had his license suspended because of a morals offense committed in a city park restroom. So I didn’t have any psychiatrist to whom I could refer my patients. Yet Blue Cross had the gall to send an agent to my office to admonish me for sending patients out of network, when virtually none of the specialists in my region would accept my Medi-Cal [CalOptima] patients within the network. It was managed exclusion of care.)

And Medicare? There is now a march toward private Medicare Advantage plans. It may not be obvious to those who are enrolling in these plans, but they are designed to create barriers to care – the most important being limitation of care to contracted provider networks. Most patients do not know when preferred care is being bypassed or that it is not even offered at all because of these restrictions, or maybe because physicians are simply avoiding the hassle of obtaining prior authorizations.

And those who insist on the right to enroll in private plans as a condition for enacting a Medicare for All program? They truly do not seem to know what they are wishing for. They are making a plea for the perpetuation of the evils of managed care, though the insurers have been effective in making those evils less transparent.

Ed Weisbart has it right again: Managed care is a model that’s had its day. If only the public could understand that. We would then have the political support to move forward with single payer Medicare for All – affordable health care for everyone forever.

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About the Commentator, Don McCanne

Don McCanne is a retired family practitioner who dedicated the 2nd phase of his career to speaking and writing extensively on single payer and related issues. He served as Physicians for a National Health Program president in 2002 and 2003, then as Senior Health Policy Fellow. For two decades, Don wrote "Quote of the Day", a daily health policy update which inspired HJM.

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