Managed Cooperation - An Innovative Idea for Medical/Mental Health Insurance

An Innovative Idea for Medical/Mental Health Insurance
by Karen Shore, Ph.D.
(Revised 10/2/99)

The success of a health plan will depend upon
the values upon which it is based.

We support the following values:

All Americans should have access to quality health care.
Consumer freedom with responsibility.
Americans value the "Three Fundamental Freedoms" of choice, privacy, and control over health care decisions for themselves and their loved ones. Consumer freedom can be protected by a measure of responsibility through cost-containment mechanisms that make consumers cost- and utilization-conscious, yet ensure that treatment is affordable to all. If consumers do not take some affordable responsibility for cost-containment, external controls (e.g., gatekeepers, case managers, utilization review, restricted choice, and capitation) will likely be used to control costs.
Provide the most health care possible for each dollar.
The greatest value is when the greatest amount of high quality care is provided with a minimum of administrative costs and without corporate profit or large executive compensation. The Responsible Freedom Plan has the potential to minimize administrative costs through incentives for patients to be cost-conscious, while maximizing patient care.
Cooperation, which respects and seeks solutions that enhance all parties involved.
An ethic of care, in which we make decisions and design systems affecting others according to the care and concern we would want for ourselves and our own loved ones.
Professional ethics, which requires clinicians and systems to struggle to put their patients first if there is a conflict between their own needs and those of their patient.
Professional independence
Private practice must be a fully viable option, or there would be no competition for "managed plans" or the structure of integrated health systems. Clinicians, like any other worker, can be vulnerable to pressure placed on them by those who control their income, and professional ethics and clinical judgment can be compromised. Working for an organization must truly be a choice, or a clinician cannot freely leave an organization that does not meet their professional standards.

The Managed Cooperation Plan's Benefit Design:

      For clinicians' fees, the current system of insurer reimbursement and co-payments would change to a system in which insurers would decide how much they are willing to pay for each procedure (a fixed-dollar amount), clinicians would set their fees, and the co-payment would be the difference between the clinician's fee and the insurer's reimbursement, rather than having the co-payment be a percentage of the fee.
         Clinicians are encouraged to set and make known their "full fee" and to reduce or waive that fee for patients who cannot afford the "full fee." Waiving the co-payment would be legal in all such insurance plans. Clinicians could provide current and prospective patients with their fee schedule upon request. The intention is to provide true discounts for those with limited incomes, but to allow clinicians to charge a fair "full fee" to patients who can afford to pay it. It is believed that a measure of financial responsibility for fees at the time of service encourages patients to be smart comparison shoppers when possible, and encourages them to negotiate with clinicians after an emergency service that prevented comparison shopping is delivered. This activity by consumers and the competition between individual clinicians can help keep fees at reasonable levels. Clinicians would be encouraged, though not required, to utilize a sliding scale structure. It is believed that in order to preserve their freedom, a majority of clinicians would be willing to do so. To encourage clinicians to work with, rather than avoid, consumers receiving government assistance, government funds could be added to the insurer reimbursement so that negotiated co-pays might total only a few dollars or might even be waived by the clinician, patients are still asked to be aware of and responsible for some cost, yet treatment is affordable and the clinician's fee is enough to prevent an avoidance of the poor. This would help the poor to secure a primary care physician rather than rely on emergency rooms and would increase their access to highly skilled clinicians.
          Under a system of fixed-dollar insurer reimbursements to clinicians and a sliding-scale co-pay: a) the insurer's liability is limited, b) patients can afford all necessary care, yet become sensitized to the cost-impact of their decisions, c) patients could "comparison shop" and have freedom of choice, and d) practitioners would be encouraged to work on a sliding scale, yet have the independence to compete in a truly free market based upon their education, training, talent, reputation in the community, and fees.

For Mental Health and Substance Abuse:

Outpatient psychotherapy would cover individual, group, and couple/family therapy, for allowing children, adults, or families to remain in distress is harmful and costly to our citizens, our communities, our schools and workplaces, and our society. Liberal mental health coverage, with cost-sharing as described above, is important because the costs to society of inadequately treated mental health needs is tremendous. Studies consistently show that:
1. 85% of patients use less than 26 sessions, even with liberal benefits and no utilization review
2. the 15% of those who use more than 26 sessions are people who have more complex problems before beginning treatment, and
3. liberal outpatient benefits reduce inpatient costs, medical and surgical costs, employee absenteeism, on-the-job accidents, substance abuse, and family problems that affect the next generation.
Utilization review may be needed to provide for high-cost services (hospitalization, partial hospitalization, group homes, halfway houses, or intensive outpatient care) to those who demonstrate strong psychological and/or medical need as well as financial need.
Utilization review would not intrude on session content or personal information.
Inpatient care for the seriously mentally ill or those who are a danger to self or others would not have arbitrary limits.
Medication management would have the same status as any medical visit.
Improved patient education can educate consumers about mental health problems, the various forms of treatment, educational requirements of the various mental health clinicians, and how to evaluate the effectiveness of treatment.

The Managed Cooperation Plan encourages responsible clinician pricing and disclosure of pricing information to the consumer.

          It is important that consumers not be overcharged and that professionals not be either overpaid nor underpaid. Professional organizations would be encouraged to inform consumers about appropriate fee ranges in their locality for various procedures, based upon a clinician's costs, education, training, talent, and experience. Consumer organizations would likely want to contribute information on their own or in coordination with the professional communities. Pricing information provided by professional or consumer organizations would not be regulatory; it is meant to educate and encourage consumers to question clinicians who charge fees above the typical range in their region, to boost the "bargaining power" of consumers, to make it likely that clinicians who charge fees above the typical range would be able to explain their special qualities satisfactorily to the consumer, and to encourage clinicians to use a sliding scale when needed by a patient.

The Managed Cooperation benefit design could be used in private insurance plans, government plans, or health care consumer cooperatives; in Single Payer designs or multiple payer designs.

          America has yet to have a public debate on who should finance our insurance system. We encourage both those who support single payer and other governmental insurance as well as those who support private insurance systems to consider the Responsible Freedom Plan's benefit design and value system.

Sliding scales might also be used for premiums, deductibles, and catastrophic limits.

          Sliding scales in various aspects of an insurance plan balances responsibility for maintenance of the plan and protection of consumer freedom according to income.
          Sliding scales might also be used for hospital expenses, either based on a system of a fixed-dollar reimbursement and sliding-scale co-payment, or, since hospital fees can be very high and the poor would not likely be able to afford much of a co-payment, the percentage share for costs could be graduated according to income (e.g., citizens earning $30,000 might only pay 5% of hospital bills up to a catastrophic limit appropriate for their income, while those earning $300,000 might pay 50% of all bills up to an affordable catastrophic limit). The idea is to devise a payment design by which consumers take some responsibility for cost-containment and cost-consciousness, yet treatment is affordable to all.
          Phase out employer involvement in health insurance so that consumers can take back control over their health care. Currently, health care policy and insurance benefits are heavily influenced by employers. Further, coverage often changes as one's employment or employment status changes. It is time to separate health insurance from employment.
          Hospitals can participate in taking responsibility for containing costs by building Primary Care Centers near their emergency rooms. This could reduce and perhaps eliminate the use of emergency rooms for minor problems. Further, if physician salaries were reasonable enough, some physicians might continue their employment there, as specialists have often remained a part of hospital staff. This would be especially useful in areas with populations that are used to using the emergency room for primary care, and would offer these patients some possibility of continuity of care over the years.