Magellan, Magellan, Wherefore Art Thou Magellan

The Maryland Psychologist, November/December, 1999
Opinion
Magellan, Magellan, Wherefore Art Thou Magellan?
(A Wry Commentary)
by Steven Shearer, Ph.D.
(Recovering Ex-network Provider)

In the antediluvian times before managed care, we clinicians helped create the Magellan phenomenon by our unwillingness to police our own and to be attentive to cost. As Magellan lumbers toward becoming a monopoly, as yet unchallenged by the government's anti-trust lawyers, the time has come for psychologists to speak out publicly rather than restricting ourselves to the embittered, private comments we all indulge in.

Sure, I've thought about finding a horse head in my bed. A colleague asked me if I somehow missed the movie, Silkwood. I've even envisioned the armament that could be mounted on a Gulfstream corporate jet. More to the point, I've heard the chilling stories about Magellan's lawyers.

In the beginning...

In the beginning, there was GreenSpring and it was, in retrospect, good. No matter how one felt philosophically about corporate managed care, most of us grudgingly admitted that GreenSpring was efficient and responsible relative to the fact that 95% of managed care companies gave the other 5% a bad name.

As GreenSpring network providers, our first hint of what was to come arrived in the very first corporate letter on Magellan stationery. It was Pulitzer-caliber doublespeak that established the language of Magellanese. Using meaningless buzzwords like "quality-driven," the corporate author expressed his eagerness to "share" with us his excitement that Magellan had established market dominance by buying all but one competitor. A few lines later, he announced a major cut in fees, essentially back to 1981 levels.

Oddly, psychologists did not share his excitement. The not-too-subtle translation was: "We're so big we can pay you as little as we want because, hey, you're just another non-union line worker."

The new stationery dropped the Green Spring slogan, "Caring With Care." In its place is the much more candid, "Transforming Knowledge Into Results," (i.e., turning information management into profits for investors.)

What were we to make of the 67-million-lives-controlled juggernaut called Magellan? While GreenSpring was banally named after an exit on the Baltimore beltway, Magellan was named to suggest world domination. The presciently chosen corporate name begged mentioning that the natives killed Ferdinand Magellan in 1521 before he completed his circumnavigation of the globe.

The Evolution of a Monster

While Magellan's grandiose binge of acquisitions threatened the livelihood of any self-respecting clinician, it focused our attention. As it became clear that Magellan's definition of its customers focused on payors, rather than patients and clinicians, grudging cooperation gave way to disgust.

Magellan touted itself as an expert in quality and accountability in much the same manner that a 6th term congressman touts himself to voters as an expert in campaign finance reform. Apparently, Magellan stands for anything payors will fall for.

After seducing eager payors, Magellan aggressively sought to "partner" with clinicians. This euphemistic, contrived verb's unvarnished meaning is roughly akin to being "partnered" by one's 285 lb. sociopathic cellmate. Now, after savaging clinicians' incomes and creating wholly unnecessary aggravation, all the while painting clinicians as greedy scofflaws forced onto the path of righteousness only by the selfless diligence of Magellan employees, Magellan's upper managers express puzzlement at the backlash. They wonder why we can't just be friends.

GreenSpring-now-Magellan saved grateful employers and insurers tons of money that had been spent, sometimes unwisely, on inpatient psychiatric care. The gratitude of individuals whose inpatient treatment ended prematurely was harder to ascertain, of course.

Flush with success and with the green light from the business-insurance complex, Magellan applied the same concept to outpatient care. This was entirely contrary both to the literature on outpatient utilization and to time-tested business wisdom that only the 2% of significant outliers should be actively managed, not every worker.

Like the sacred cows of diagnosis and treatment some clinicians were loath to relinquish, Universal Utilization Review (UUR) became Magellan's sacred cow. Magellan had correctly pointed out to clinicians that more psychotherapy is not necessarily better psychotherapy. Yet, its upper managers now dogmatically and irrationally cling to the belief that more UR is better UR. From behind their shield of ERISA immunity, they bragged to the Wall Street Journal about how they have brought "accountability" to mental health.

Never mind that utilization research reports that 90% of mental health patients leave treatment prior to the 25th contact without any external management and that the remaining 10% are usually very much in need of continuing treatment. Utilization review for every outpatient visit has turned Magellan into an anachronistic treatment plan mill, devoid of either innovation or rationality. The resulting deluge of irrelevant treatment plans leaves Magellan hopelessly UR-schlerotic, often making a mockery of state-mandated turnaround time on treatment plan submissions.

Yet, Magellan never denies outpatient care, as some more procrustean competitors do. This, of course, makes as much business sense as Magellan's now-abandoned decision to control managed behavioral care while simultaneously controlling the Charter Hospital System.

Magellan's managers present the successful conditioning of clinicians' use of key words and avoidance of taboo words on treatment plans as if it were actually the instillation of quality and accountability. Some may even believe it. Universal UR is, however, mostly about justifying the need for Magellan's existence to the payors. Rather than a direct attack on the need for treatment, which could arouse the interest of the Attorney General's office, Universal UR is a more indirect form of harassment. Magellan attacks the edges via repetitive demands for the same information and nibbling away at the number of sessions authorized.

Who Are These Guys?

In the GreenSpring days, "care managers" were at least nominally accountable because their name was on every treatment authorization they processed. We could tell at a glance who was a reasonable reviewer and who wasn't. As GreenSpring-now-Magellan evolved from most respected to most suspected, all employee identifiers were dropped and reviewers became like anonymous bombardiers, high above soft targets, ostensibly bearing no personal responsibility in their anonymity. Privy to the most private material about our patients, they remain less identifiable than the person behind the "Inspected by No. 57" slip we find in the pocket of a new pair of pants. One can almost imagine them wearing black hoods, sitting in shadowed cubicles, while they carefully consider perhaps 350 treatment plans per day apiece.

Once it is finally clear to Magellan that universal UR is not merely irrational, but eminently self-destructive, they will certainly reconfigure. Rather than admit how ill conceived their approach was, or that they must protect their profit margin at all costs, Magellan will likely imply that they have so changed the very character of clinicians that external UR of every outpatient visit is no longer necessary. Perhaps, like United Health Care's recent announcement (utilization review cost more than the "unnecessary" procedures it denied), excision of a bone-headed strategy will be transformed into a cynical marketing opportunity.

At that point, the immense administrative structure must go. Laid-off reviewers will have to consider going back to modest paying, sometimes messy or tiresome clinical work instead of the more lucrative, days-only-with-great-benefits job of controlling others. (Pity the Magellan reviewer who, with genuine empathy, confided to an outside psychologist that she used to do clinical work, but stopped "because there's no money in it.”)

A Zero Sum Game

Magellan is driven by billionaire financiers Darla Moore and Richard Rainwater (who are not used to losing money) and impatient investors who watched MGL stock plummet from nearly $40 to under $4 per share. There is a billion dollars in debt that must be serviced and repaid on the backs of poorly paid clinicians. The future of Magellan will be Nordstrom-talk, to match their plush new offices, but Value City-reality. Cut current fees in half!! Investors will cheer the daring of Magellan's robber-baron-market-dominance. For a time, upper managers' stock options will likely skyrocket.

Meanwhile, clinicians will see both their incomes and the depth of mental health treatment fall to Hair Cuttery scale. After all, since employers and insurers are the customers rather than prospective patients in need of help, who can tell a seasoned clinician from a newly-minted therapist willing to work for any hourly wage? Magellan can even set up its own training program for clinicians modeled after McDonald's Hamburger University. McGellan University could turn out managed-care-friendly paraprofessionals with two weeks of crisis intervention training. Then, professionalism need no longer get in the way of profits.

Perhaps then, the real market of patients in need of care will finally drive the carpetbaggers out of the mental health market and into new markets like cardiology, ophthalmology and foreign countries (cf. cigarette makers), as Magellan's managers are already beginning to propose.

What could have been a win-win-win situation for patients, Magellan and clinicians has been morphed into a zero sum game. Unless Magellan can dramatically reconfigure, it is all down hill from here, either for mental health treatment or Magellan.

Magellan may have already had its 15 minutes of infamy and market dominance. If Magellan dies, state economic development officials and investors would grieve. But who else would mourn its passing? History does not record whether its namesake, Ferdinand, was missed by any of the natives.

Steven Shearer, Ph.D., is in private practice in Towson and is a faculty member in a residency-training program for family physicians. He is no longer "managed care friendly."