Managed care for people with disabilities.

The managed care model, in its simplest form, is the application of business principles to the delivery of medical services which are both effective and efficient. This "savior" of rising health care costs, however, brings to the table multiple daemons of paradox when people with disabilities are affected. Any model of healthcare delivery applied to people with disabilities should ideally address issues of independence and inclusion. A paradigm which usurps the decision making power of people with disabilities is fundamentally an oppressive and non-inclusive model.

Keigher (1995) recently wrote that, "The majority of citizens have been gradually and voluntarily relinquishing their right to choose their doctors in return for a promise of lower premiums" (p.146). With managed care, especially Medicaid, people with disabilities should "not go gently into that good night" (Thomas, 1952). The original intent of the HMO Act (1973) was to stimulate the interests of consumers and providers in the HMO concept, and to allow people to select, for themselves, either a prepaid system for obtaining health services or the more traditional fee-for-service model of healthcare delivery. Notwithstanding, with the current paradigm of managed care, there are unfortunately few options and little informed consumer input. The purpose of this paper is to address the concerns of individuals with disabilities when the principles of managed care are applied to the delivery of healthcare services.

What is Managed Care?

Managed care is the financing and delivery of medical care that is manifested through contracts with selected physicians and hospitals who provide comprehensive services to enrolled members. Managed care, according to Cornelius (1994), is a "strategy developed by the health care industry as a means to control profitability in the dispersement of health care resources. Control of utilization, cost, and information are the essential elements of this strategy" (p.47). Wilensky (1991) wrote, "The role of coordinated care now and in the future is not only to provide potential for cost control, but also to expand financial access to care and improve quality through coordinated care" (p.63). Contracting providers agree to accept utilization and quality controls as well as some financial risks.

It is the potential risk and the use of capitation components of managed care which provides the first glimpse of the paradoxes which may exist between managed care and people with disabilities. Managed care may fundamentally alter the provider's role from serving as facilitator for the patient's welfare to balancing people's needs against the organization's need for cost control. This is especially cogent when applied to people with disabilities who need specialized care which often creates greater costs for the system.

Basically, managed care is a general term for networking physicians, hospitals, and other providers into organized groups to facilitate cost-effectiveness of health care services. Managed care is a way of providing pre-paid care through a network that usually includes a specific group of providers and services. The managed care organization coordinates and refers patients to its health providers and hospitals, and monitors the amount, pattern, costs, and quality of care. This is generally referred to as the "gatekeeper" function.

The Managed Care Revolution and Medicaid

Managed Care, a concept that barely existed a few years ago, has been enjoying phenomenal growth, especially in the area of state Medicaid offices. According to Exline (1996), over 31% of all Medicaid patients nationally are now enrolled in capitated managed care plans. The Medicaid program is the primary federal program providing health care to low-income families, the elderly, and people with disabilities. Max (1996) reported the following statistics: Of the 36 million people covered by Medicaid, 4.9 million are children or adults who are blind or have other significant disabilities. In fact, the 15% of Medicaid beneficiaries who are disabled accounted for over 39% of the expenditures in 1993.

The largest expense in Medicaid for people with disabilities in 1993 was for hospitalization, which amounted to a substantial figure of $128 billion, or 45% of total expenditures (Max, 1996). Physician's services were the second highest cost at $70 billion. Finally, with regard to disability expenditures, people with disabilities represent approximately 115 of those using prescription drugs; however, they represent approximately 50% of the Medicaid prescription expenditures. The Medicaid spending for people with disabilities is four times as great as for people without disabilities and, therefore, a very prominent concern for those who have disabilities and for those who wish to change or alter this program in any way.

The 49 million people with disabilities in this country include individuals with physical and mental impairments, conditions, or disorders, and people with acute or chronic illnesses which impair their ability to function. People receiving Medicaid benefits, according to the Social Security Administration (1994), as the result of disability can be separated into three broad categories: physical disability (43%), mental illness (29%), and mental retardation (28%).

According to the Health Care Financing Administration (HCFA, 1994), people with disabilities under the age of 65 who receive Medicaid benefits comprise 2 percent of the U.S. population, which equals 5.5 million people. Although this group may appear relatively small, their healthcare costs are not. Overall, according to HCFA and confirming Max (1996), people with disabilities are the most expensive to serve of all Medicaid categories even though they comprise only 14% of Medicaid recipients: Per capita costs, excluding institutional care, averages per person with a disability nationally at $6,095, compared to $1,478 for AFDC beneficiaries, or 6 times the cost. With institutional care, the averaged cost is $8,368 per person with a disability. HCFA (1994) also reported that the number of Medicaid recipients in managed care plans jumped 63% from 1993 to 1994, from 4.8 million to 7.8 million. It is yet to be seen who will ultimately be responsible for the deep pocket cost for the marriage between Medicaid and managed care; however, with inclusive planning, people with disabilities will be a viable partner rather than illegitimate offspring of the venture.

It is important to note that there are potential opportunities for people with disabilities in the managed care environment, such as: coordinated care, reduction of inefficient procedures, quality assurance, a prevention mind-set which may lead to the reduction of secondary disabilities, lower cost premiums, and system innovation. In addition, the one-stop shopping concept will greatly reduce and minimize physical barriers which can impede access to appropriate services. However, these potential opportunities are undermined by the problems associated with managed care health services for people with disabilities.

Problems with Managed Care

According to Penelope Lemov (1996), anti-managed care sentiment is not isolated to the few: "This year, at least 400 anti-managed care bills have been introduced in legislatures around the Country" (p. 22). These bills cover everything from insurance portability to drive-through births. The American people may not want to relinquish their freedom to choose their health care provider. Even though people with disabilities often need expensive and special health care services and do not necessarily "fit" within a fiscal scheme of cost efficient services, they should be given equal access and quality healthcare.

It is an undisputed fact that the needs of people with severe disabilities are expensive and will continue to become more expensive. Segedy (1996) provides significant insight into the actual costs of health care services for people with severe disabilities. This study suggests that the 1992 costs associated with a spinal cord injury for a quadriplegic injured at the age of 25 were approximately $2 million; and the direct cost for a paraplegic is approximately $700,000. These large expenditures are at variance with the concept of cost control.

The debate on government spending for people with disabilities is not a new one. Gallagher (1995) wrote that Germany, during the Third Reich period, dealt with and debated the question of allocating medical care to severe health care cases. Gallagher believed that with the rise of Nazism came a new medicine ethic, which was an emphasis on prevention for well people rather than serving the chronically ill. He wrote that this type of thinking was so ingrained and pervasive in the collective conscious of the Third Reich that even school books were facilitating the thought. He provides the following example from a math textbook:

"Problem 95:

The construction of an insane asylum requires 6 million

RM. How many housing units for newly married

couples @ 15,000 RM could be built for the amount spent

on the insane asylum?"

In Germany, physicians would simply fill out a questionnaire detailing the extent of the disability, the length of treatment, and the prognosis. The questionnaire was then given to a committee to determine if the patient was worthy of continued treatment. These decisions were based on guidelines prepared by public health doctors and administrators.

Gallagher (1995) wrote, "The specialist sees the disease, not the patient; the HMO sees the expense and often enough, no one has the interest, time or money it takes to tend the emotional and medical needs of the patient" (p. 18). If America is not careful, managed care may lead to a system of healthcare that devalues people and emphasizes cost-saving measures only.

Although some may scoff at Gallagher's comments as extreme, there are lessons to be learned. Historically, people with disabilities have not been viewed as viable decision-makers, but rather as individuals in need of the paternalistic protection of the government. There is little doubt that people within the field of rehabilitation have not forgotten the days of forced institutionalization and therefore, the postulations of Gallagher may not be historically exclusive.

The ascendance of managed care has introduced a third party into the patient-physician relationship. Dial (1996) wrote that health care is moving from a "guild" activity to an "industrial" activity. Managed care has the potential of facilitating Wall Street mentalities incorporating mean-street tactics, if fiscal managers are making medical judgments without medical training. The bottom line may be that these organizations are not in the business of managed care for the health of America's poorest and neediest population.

The most salient issues related to people with disabilities in the marriage of managed care and Medicaid are the role of gatekeepers, access to specialty services, inadequate benefits, and financial incentives to not serve or to under-serve individuals.

Gatekeepers

Most managed care organizations in Medicaid use a "gatekeeper" to manage healthcare of individuals. Although the concept of a gatekeeper can be viewed as a catalyst for coordinated care, a gatekeeper in reality may also create many problems for people requiring frequent or specialized health care services. For example, gatekeepers may postpone access to critical services which people may need immediately, and may also be unwilling to refer patients to specialists because of utilization limits imposed by the managed care organization. Gatekeepers, regardless of how well trained, cannot be familiar with all the complex health care needs of people with specific conditions or disabilities, and may be held culpable in the absence of consumer involvement to explain and participate in their treatment plan. In addition, the managed care plan may not contract or outsource with appropriate referral providers, and therefore may not provide the full range or type of services that are needed to fulfill their responsibilities to the patient.

Gatekeepers also represent a fundamental problem in that it is at odds with the independent living movement, which emphasizes choice and personal responsibility. A person with a disability, as well as anyone without a disability, should not relinquish the opportunity to be involved with their own medical treatment. A lesson from the Rehabilitation Act of 1973 may be a good analogy. After the advent of the Individualized Written Rehab Plan in 1973, clients in rehabilitation now participate more in the development and execution of their treatment plan. Likewise, a gatekeeper who is unaware of a particular disability could benefit greatly both professionally and financially from exploring options with the patient. However, many managed care plans assign consumers to physicians and do not allow consumers to choose their own physicians who may be familiar with their medical history and health care needs. People with disabilities are not only cognizant of rising health care costs, but they also understand their own medical needs and preferences, and should be permitted to exercise their independence. One must exercise independence in order to experience it.

In addition, managed care organizations due to cost are unlikely to nurture and develop relationships. With providers of ancillary services, such as manufacturers of assistive technology, orthotics and prosthetics, and personal care assistance. But it is because of technological advances that people with disabilities now have more opportunity to live, work, and play independently given adequate healthcare. Sometimes saving money and needed technology, which may be expensive, are at odds with each other.

Inadequate Benefits

Another major problem with managed care is insufficient benefits. Managed care operates best within a predictable framework where treatment protocols are standardized and patient needs are straightforward and uncomplicated. This is in direct contrast to serving people with disabilities who experience multiple medical complications, secondary conditions, and frequent allied services.

A comprehensive benefit package is necessary for people with disabilities; however, managed care benefit packages are mostly based on an acute care model. Segedy (1996) cites Yarony, Vice President for Clinical Program Development at Schwab Rehabilitation Hospital in Chicago, who has seen a major trend toward earlier discharge of persons with disabilities. Discharge for paraplegics, which usually occurred after approximately three months, are now after 30 days, and for quadriplegics six months has been reduced to two months. Segedy (1996) also reported the following trends:

1. Managed care plans typically cover only 60 days of rehabilitation and sometimes provide no rehabilitation services at all.

2. Managed care plans rarely cover home and community-based healthcare services, such as nursing and personal assistance services, which often prevent multiple re-admissions to acute settings.

3. Managed care plans often have annual or lifetime caps for certain conditions or treatments, such as mental health and substance abuse.

4. Consumers are often denied benefits based on narrow definitions of "medical necessity," because these definitions are based on the health care needs of the "average" person. For example, managed care plans often refuse to authorize physical therapy for people with chronic conditions because such therapy would only maintain rather than improve functions.

5. Many plans refuse coverage of durable medical equipment, orthotics and prosthetics. Definitions of durable medical equipment, if accepted, are often restricted. This a particular concern for individuals requiring customized medical equipment, such as specialized wheelchairs and seating systems.

6. For some people with disabilities and chronic conditions, particularly people with rare disorders, effective drug therapies may not be available in many managed care plans.

Access to Specialized Treatment

Individuals with disabilities may require frequently specialized providers who may not participate in a particular managed care network. Furthermore, continuity of providers is critical to people with special health care needs that require specialized care over time. Some people with chronic conditions, including individuals with mental illness, sustain great harm when forced to disrupt existing relationships with providers.

Many people with disabilities with severe or rare conditions can often only receive appropriate care at highly specialized centers, which may be affiliated with schools of medicine or teaching hospitals, or may be free standing centers with specialized treatment expertise. Many plans will not cover these centers and these centers may not wish to participate in a particular managed care network. Patients with cystic fibrosis, according to McWilliams (1996), who are members of managed care plans are being denied access to specialists in centers accredited by the Cystic Fibrosis Foundation.

McWilliams reported to the Congressional members of the health and environmental subcommittee that "these gatekeepers simply do not have the adequate advanced training to make effective, educated decisions concerning the needs of cystic fibrosis patients. Two isolated examples throughout a physician's career does not make a specialist" (p. 103).

In a report from Rowland (1995), which consisted of research from a synthesis of 139 articles, she found that most studies show a decline in the use of specialist services with the advent of managed care. Rowland also reported that in every HCFA Medicaid Competition Demonstration site, except Missouri, the probability of seeing a specialist at least once a year declined by more than 30%. Twenty percent of pediatricians who were interviewed experienced a denial in referral requests and one-third of the physicians thought that such denials negatively affected their patients' health. Lastly, with regard to Rowlands report, she found that within Wisconsin's Medicaid managed care program, 50% of beneficiaries with a special needs family member did not think that the HMO could fulfill their needs because of obstacles in receiving specialist care.

Incentives to Under-serve

The final major issue to be raised relates to incentives to not treat or to under-serve people with disabilities. Many managed care plans, specifically capitated plans, have incorporated financial incentives to under-serve expensive consumers, which places people with disabilities at significant risk. Grunwald (1996) reported on a new plan in Boston, Massachusetts, first in the nation, which will adopt a capitation system and pay providers for services to abused, neglected, and mentally-ill children at a fixed rate. For every child supported, the provider will receive a fixed payment no matter how much care is delivered. Providers in this plan also receive financial bonuses for removing and keeping children out of costly 24 hour residential care facilities (however, the Department of Social Services retains veto power over clinical decisions).

At first glance, the concept of keeping children away from institutions while saving money appears to be consistent with good medical treatment and the trend towards independent living. However, unless the managed care organization has access to comprehensive, community-based, client-centered programs, there will not be either improved treatment or cost savings. But rather, there will be less beneficial care and more cost over time.

Critics of such capitated systems say the program offers strong incentives to under-treat and there is an economic and moral investment which takes a big risk on some incredibly traumatized children (Grunwald, 1996). The most poignant rationale against a capitation managed care plan may be that every dollar not spent on services which may be profit for the HMO is at the expense of adequate care.

Lastly, managed care organizations tend to pay non-salaried physicians based on the number of patients served which provides incentive for limited individualized attention to each patient. With Medicaid managed care organizations now increasingly serving people with disabilities these previous problems become central to adequate health care.

Recommendations

First, it is the authors' opinion that, contrary to HMO theory, managed care plans would significantly decrease, not increase, their costs if appropriate services were delivered to people with disabilities in a timely, appropriate, specialized manner with consumer input throughout the process. The expenditure of appropriate rehabilitative therapies, services, and assistive technology devices today can substantially reduce secondary, expensive conditions tomorrow while maintaining the integrity of the medical community. In addition, a comprehensive, wrap-around, community-based orientation, including personal care assistance, can be an excellent investment and a viable alternative to costly institutional care.

Secondly, managed care plans should at least not only be held responsible to meet certain standards and relevant quality assurance, but also held liable to maintain access and accountability to consumers with disabilities. The following are specific recommendations regarding managed care and people with disabilities, which may facilitate appropriate decision-making, access, and referrals:

1. Medicaid managed care should provide legal relief and due process protection so that consumers have options when grievances occur. Although the Americans With Disabilities Act mainly addresses physical accommodations, there needs to be additional protection with regard to managed care for people with disabilities. This additional protection should be implemented at the state level, especially in the case of Medicaid managed care.

2. Needs of consumers must be routinely and systematically considered, therefore, they should be an integral part of the development and implementation phases of managed care. The role of the consumer is directly applicable to the quality and appropriateness of healthcare services.

3. Professionals who work within the disability field should be required to take continuing education courses in managed care for licensure and certification.

4. Managed care organizations should establish procedures for involving academic and research facilities and assistive technology manufacturers to participate in managed care organizations.

5. Specialists as gatekeepers are extremely important and appropriate, but only when serving the needs and wishes of people with disabilities.

6. Quality assurance, such as peer and utilization review, should be performed by people with specific medical knowledge for the areas being considered.

7. Managed care must offer a full line of assistive technology devices as well as being able to provide the technical support and training of the equipment to the consumer.

8. Assistive technology and full services should be available to people with disabilities regardless of their geographic location. Thus, traditionally under-served rural areas must have equal access to the same services.

9. Managed care organizations should provide point-of-service options which enable people with disabilities to chose an out-of-network provider for highly specialized services when necessary.

10. Lastly, the profit margins of managed care organizations, even governmental entities like Medicaid, should be monitored for compliance with set standards of operation.

The transition to managed care, especially within Medicaid, may prove beneficial, but in its present form appears more likely to be harmful for people with disabilities. There is a great deal still to be learned about the most effective ways to ensure that managed care entities furnish high quality healthcare services within desired monetary restrictions. The road to discovery is now underway and operating at high speeds of implementation; however, there is still time for people with disabilities and advocates to join the race.

Unfortunately, managed care in its purest form may involve an inherent logical contradiction when serving people with disabilities. The application of business principles, such as cost effectiveness and organizational efficiencies, may not remain viable when forced to coexist with the fundamental human need and requirement of healthcare for people with disabilities.

In addition, this contradiction is incongruent with recent trends in public policy, which have attempted to facilitate independent living for people with disabilities rather than micro-managing their everyday existence. Neither altruism nor cost-effectiveness should be an excuse for usurping the fundamental right of independent choice and living for every American. Only the future will tell whether managed care is a boon or bust for individuals with special needs.

References

Cornelius, D. (1994). Managed care and social work. Social Work in Health Care, 20 (1), 47-63.

Dial, W. (1996, July). A sense of duty: MCO's and the question of ethics. Managed Healthcare News, 12 (7), 1-21.

Exline, Marty. (1996). Pioneering Medicaid toward the 21st century. Handout RESNA Tech Act Projects. Independence, MO: Missouri Assistive Technology Project.

Gallagher, G. (7 September 1995). Can we afford disabled people? Paper presented at 14th annual James C. Hemphill Lecture.

Grunwald, M. (1996, February 3). DSS plan raises fears for children. The Boston Globe, p. 1.

Health Care Financing Administration. (1994). The Medicare & Medicaid Statistical Supplement of the Health Care Financing Review. HCFA Publication #03374.

Keigher, S. (1995). Managed care's silent seduction of America and the new politics of choice. Health and Social Work, 20 (2), 146-51.

Lemov, P. (1996, June). The strange bedfellows of managed care. Governing, 9 (9), 21-24.

Max, W., Rice, D., & Trupin, L. (1996). Medical expenditures for people with disabilities. Disability Abstract, 12. U.S. Department of Education.

McWilliams, L. (ed.) (20 June 1996). Managed care gatekeepers deny access to foundation centers. Report on Disability Programs 19 (13), 105.

Rowland, D., & and Rosenbaum, S. (1995). Medicaid and managed care: Lessons from literature. Kaiser Commission on the Future of Medicaid. Washington, D.C. Segedy, A. (1995). Managed care: Keying into the challenges. Team Rehab Report, 6 (11), 24-30.

Thomas, D. (1951). Do not go gentle into that good night. In M.L. Rosenthal (ed.) (1987), Poetry in English; An Anthology. New York: Oxford University Press.

Wilensky, G. (1991). Coordinated care and public programs. Health Affairs, 10 (4), 62-77.