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Credentialing, the most important function for success.

Credentialing, the Most Important Function for Success

Recently, I was asked by a managed care physician executive about my choice for the most important component for the containment of medical care costs. I quickly responded with credentialing. Identifying and supporting high-quality, efficient providers and eliminating the other providers in the managed care network is the only solution to the future of health care. Managed care programs have attempted to provide cost-effective, high-quality health care through the selection of providers in networks and through the imposition of payment mechanism, capitations, withholds, fee schedules, and discounts. Prior authorization, medical policy, and treatment protocols have been developed to limit utilization of all providers. Expensive systems of computers, nurses, and physician executives have been installed.

Unfortunately, interventions have been applied too evenly. Payers' assumption is that all practice patterns must be changed. The bell-shaped curve of distribution is in effect in health care. Medical policy and managed care interventions placed upon providers on the up-slope of the curve only add cost to the process. Regulations, policies, and control mechanisms focusing on fraud and abuse do little to change the ethical and moral values of this provider group.

The emphasis should be on changing the practice of the "average" physician by 1-3 percent, thereby shifting the most dollars with the least intervention. Medical reports should focus on the delivery of nonthreatening information to average providers so that they will have the information to make decisions about health care choices on their own. Physicians cannot be markedly cost effective in all settings. Physicians' choices have to be appropriate to conditions or settings to be most "cost effective." Even the most efficient providers continue to spend enormous sums for premature infants, intensive care units, and bone marrow transplants.

Cost effective claims payment is available to few third-party payers. Prior authorization and cost and quality control mechanisms have not taken advantage of modern computer techniques to contain overhead. We must go to the marketplace and find the means to mechanize these requirements in retail sales, the airline industry, and credit cards. These industries can authorize and record charges and payments and confirm eligibility and credit limits for individual items in a much more complex environment than medicine. If the care of patients can be studied "en masse" by these automated techniques, utilization controls could be used selectively. Interventions could be changed to study disease processes, procedures, or practice patterns at the time or when the need arises.

"Swipe cards" are being implemented by some managed care firms - Prudential Insurance, Travelers, Av-Med HMO, and others - for referrals to specialists and for billing. The ing. The use of computer systems for individual offices is not far away. The use of hospital-based computer systems already allows the practicing physician and the review organization to review orders and results without expensive phone calls and without "personal" intervention.

Efficient providers must be excluded from intervention and prospective utilization controls. Capitation payments, withholds, and prior notification for the efficient providers only increase costs, and the discounts obtained from the inefficient do little to reduce cost and may increase risks as the providers, and ultimately society, feel that patients are getting "discount" care.

Physician managers must look at the obvious and push their efforts toward identification of the providers we all would like to see as patients and eliminate the poor-quality or inefficient ones. If managed care products do not act quickly, the cost of administration will force employers and other payers to find alternatives.

It will be very tough to implement these simple alternatives. Overhead costs represent people and jobs. The insurance bureaucracy will continue to justify its existence by pointing out incidents of inefficiency. Cutting the budgets for control mechanisms without looking at the basic work will only lead to poor service and further alienation. The winners in the managed care arena will have strong physician leadership and will utilize credentialing to control costs and continually improve quality.


John J. Saalwaechter, MD, MBA, has been named Executive Director, American College of Medical Quality Foundation, Venice, Fla. He was formerly Medical Director, Prudential Plus of Indiana, Indianapolis. Dr. Saalwaechter is Chair of the College's Society on Insurance and an Associate Member of its Society on Managed Health Care Organizations and Forums on Computers and Information Technology and on Quality Health Care.
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Title Annotation:certifying efficient medical care providers and eliminating inefficient providers will help contain medical costs
Author:Saalwaechter, John J.
Publication:Physician Executive
Date:Jan 1, 1991
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