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This article was downloaded by: [Laurentian University]On: 04 October 2014, At: 03:42Publisher: RoutledgeInforma Ltd Registered in England and Wales Registered Number: 1072954Registered office: Mortimer House, 37-41 Mortimer Street, London W1T 3JH,UK
Journal of Teaching in SocialWorkPublication details, including instructions forauthors and subscription information:http://www.tandfonline.com/loi/wtsw20
Preparing Students for Practicein a Managed Care EnvironmentNancy Claiborne PhD, ACSW a & Anne Fortune PhD aa School of Social Welfare , University at Albany,State University of New York , 135 Western Avenue,Albany, NY, 12222, USAPublished online: 07 Sep 2008.
To cite this article: Nancy Claiborne PhD, ACSW & Anne Fortune PhD (2005) PreparingStudents for Practice in a Managed Care Environment, Journal of Teaching in SocialWork, 25:3-4, 177-195, DOI: 10.1300/J067v25n03_11
To link to this article: http://dx.doi.org/10.1300/J067v25n03_11
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Preparing Students for Practicein a Managed Care Environment
Nancy ClaiborneAnne Fortune
ABSTRACT. Managed care has profound effects on health and mentalhealth service delivery in the United States. This article describes theknowledge that students need for effective social work practice within amanaged care environment and evaluates a course to deliver the content.[Article copies available for a fee from The Haworth Document Delivery Ser-vice: 1-800-HAWORTH. E-mail address: <[email protected]>Website: <http://www.HaworthPress.com> © 2005 by The Haworth Press, Inc.All rights reserved.]
KEYWORDS. Managed care course, course evaluation, social workeducation
INTRODUCTION
The Health Maintenance Organization (HMO) Act passed by Con-gress in 1973 ushered in the age of managed care; however social work
Nancy Claiborne, PhD, ACSW (E-mail: [email protected]), is Assistant Professor, andAnne Fortune, PhD (E-mail: [email protected]), is Associate Dean of Academic Pro-grams and Professor, School of Social Welfare, University at Albany, State University ofNew York, 135 Western Avenue, Albany, NY 12222.
The authors thank and appreciate the students who participated in the evaluation, aswell as their helpful comments that influenced subsequent presentations of this course.
For the evaluation of the course, the University at Albany Institutional ReviewBoard approved the procedures for the protection of human subjects.
Journal of Teaching in Social Work, Vol. 25(3/4) 2005Available online at http://www.haworthpress.com/web/JTSW
© 2005 by The Haworth Press, Inc. All rights reserved.doi:10.1300/J067v25n03_11 177
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education has been slow in developing a curriculum that responds to thechanges impacting health and mental health service delivery (Strom-Gottfried, 1997). Yet, managed care effects most social work practiceespecially key areas in many clients’ lives, such as health and mentalhealth. Students must understand how managed care affects their cli-ents, their delivery of service, and how to manage the system efficientlyon behalf of their clients. This article describes and evaluates a course inmanaged care that prepares students for practice, focusing on contentthat students need for understanding managed care.
Managed care penetration into the American health care marketplacehas been remarkable in the last decade. The enrollment in managed careplans (public and private) accounted for 41 percent of all Americanswith health insurance in 1992 and increased to 65 percent in 1995(HIAA, 1999). Ten percent of the individuals covered by Medicare and11 percent of those covered by Medicaid were enrolled in a managedcare plan in 1995. Medicaid managed care penetration nationally hadincreased to 45 percent by 1997 (HIAA, 1999).
Stakeholders’ ongoing concerns in the 1980s about increasing health-care costs created the environment for managed care growth. By 1988health care spending had grown to 11 percent of the GNP from the 1965figure of four percent (Relman, 1988). In response to employer demandfor lower premiums and price competition among insurance carriers foremployer commerce, managed care entities implemented severe costcontainment strategies. These included reducing entry to a single accesspoint (gatekeeping); implementing utilization review essentially limitingaccess and continuing care (prospective, concurrent, and retrospective re-view); implementing population-based care shifting risk to “carve outs”for mental health and drug and alcohol and rehabilitation; reducingcosts through reimbursement schemes (discounted fee-for-services,pre-determined fee schedule, capitation, and risk sharing contracts);and leveraging lower absolute spending levels by stimulating providerand pharmaceutical competition, performance-based contracting, andrebates (Emenhiser, Barker, & DeWoody, 1995).
The rise in hospital costs under Medicare was particularly dramatic.Between 1966 and 1981 the federal portion of hospital reimbursementrose from 13 to 41 percent (Karger & Stoesz, 1994). Federal and stategovernments began contracting with managed care organizations(MCOs) to curtail Medicare and Medicaid costs and improve access tocare in underserved communities. However, MCOs were not accus-tomed to serving populations that were high-risk, multi-problem,chronically ill, and intrinsically more expensive. Essential support
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services such as outreach and case management were not uniformlyreimbursed (Perloff, 1996). Medicare enrollees fared better in thatthey were offered attractive co-pay levels and greater services. Yet,studies showed large disparity in plan benefits per county. MedicareMCO plans were more likely to offer prescription coverage and pre-vention care benefits in counties where federal reimbursement washigher, usually urban areas (McBride, 1998).
These far-reaching managed care practices have ultimately redefinedthe ways in which care is delivered and created rapid and unprecedentedchanges in the delivery of care. The primary focus for intervention isnow the presenting problem and its accompanying symptoms, and carehas been shifted to the most “appropriate level of care,” which has de-creased inpatient admissions and lengths of stay as well as limited out-patient visits. Mental health and substance abuse coverage is oftenminimal and is sub-contracted to specialty systems in which financialrisk is shared with providers, preferably large group practices–changingthe structure of private practice.
Because of these trends, social work educators need to prepare stu-dents for assuming expanding roles within these changing environments.Demands placed on clinical social workers by MCOs include the need tooperate within delivery of care systems that have rapid assessment capa-bilities, provide brief interventions, maintain vigilant documentation, andsustain consistent communication with utilization review personnel. Ad-ministrators are required to maintain integrated financial and deliveryof care information systems so that financial, clinical, and market infor-mation can be analyzed concurrently. Operating these systems is noeasy task in that they can experience intra-organizational contradictionsrelated to regulatory requirements, risk management issues, ethicalstandards, cost-efficient care, quality of care, and multiple stakeholdersatisfaction.
This article examines student learning from the masters level course,Managed Care and Social Work, offered within the School of SocialWelfare at University at Albany, State University of New York. Thecourse’s primary goal is to help students enter the field of social workunderstanding how the advent of various forms of managed care haschanged health and mental health delivery of care. It is designed to pre-pare students to assume expanding roles in systems that are impacted bythe presence of managed care practices. A careful evaluation of thecourse content and students’ mastery of managed care principles canhelp social work education programs identify curriculum content andteaching methodologies that facilitate the knowledge and skill for social
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work practice in managed care environments. The article outlines andevaluates the course and, based on students’ reactions to the course, an-alyzes the knowledge that social work students need for practice inmanaged care.
MANAGED CARE AND SOCIAL WORK
The course, Managed Care and Social Work, was offered as anelective to all students in the mid-sized MSW program. It focused onmanaged care as a delivery of care system and took the approach of apractice course, emphasizing managed care organizational structuresand practices relevant to a social work generalist. The course was of-fered as an elective for students who were specializing in either man-agement or direct practice, as well as beginning students. Studentexperiences with managed care varied from none to moderate. Be-cause the range of student experiences were so varied, the lectures be-gan with simple information, building to more complex concepts.Students actively engaged in discussions involving their own experi-ences. They used critical thinking in grappling with the lecture andreading materials. The term “MCO” was used generically to includeHealth Maintenance Organizations (HMOs), Prepaid Health Plans(PHPs), Preferred Provider Organizations (PPOs), and similar organi-zational variations for managing healthcare.
The course format was an intensive meeting for a total of 34 hoursover two consecutive weekends during the summer. A two-weekendformat was chosen to offer an attractive alternative for working stu-dents. The course curriculum was developed using Strom-Gottfried’sprinciples that “ . . . students will need knowledge in three key areas:how managed care practices have emerged and evolved, how servicesare redefined within managed care processes, and how research andoutcome measures guide social work practice” (1997, p. 10).
These three key areas for student knowledge were incorporated intothe overall learning objectives for the course. First, the students wouldunderstand the history of managed care in health and mental health,and its philosophical concepts and financial practices related to deliv-ery of care. Second, the students would understand how MCOs poli-cies have changed the practice of medicine and mental health care.Here, students were expected to be able to evaluate managed care’simpact on consumers, the social work profession, human service orga-nizations and important stakeholders. Finally, students were expected
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to articulate the importance of determining and applying research-based interventions to meet consumer needs in a managed care envi-ronment.
Course materials focused on social workers delivering care within amanaged care environment. These materials included clinical assess-ment, intervention and utilization review; care issues related to at-riskgroups; ethical issues for social workers; structuring delivery of caresystems; the need for rigorous financial management of services; ex-pectations for outcomes studies reflecting efficient and effective deliv-ery of care system; communication and negotiation with managed careentity; and consumer education and advocacy for improved managedcare practices. Details of the lecture topics are shown in Table 1. Therelevance of the material to students will be discussed as part of theevaluation of the course.
The course was presented in lecture format, and also utilized classdiscussions, guest lecturers, group exercises, and videotape. Studentswere urged to ask questions and engage in discussion at any point dur-ing lectures. Guest lecturers were invited so that students could learnspecific aspects of dealing with MCOs from skilled practitioners. Forexample, a clinical administrator of a local managed care companytaught documentation nuances for clinical services, including criteriafor admission, continuing care, and discharge. Another guest was amedical social worker who demonstrated a successful utilization reviewstrategy by advocating use of clinical criteria and cost offset analysis toan MCO. Two additional guests were proficient in analyzing organiza-tional costs of providing services and negotiating contracts with MCOs.Group exercises were organized around reimbursement and pricinganalysis as it relates to managed care (e.g., bundled payments, cost ben-efits analyses, etc.).
A half-an-hour group presentation and a final paper evaluated stu-dents. The group project gave students the opportunity to investigate pol-icy, delivery of care models, financial bases for the delivery of care, andthe strengths, limitations, and ethical issues of managed care systems re-lated to at-risk populations, which included the severely mentally ill, mi-norities, alcohol and drug addicted persons, rural populations, and thechronically ill. Students were also evaluated on the presentation being co-hesive (flow, logic, etc.), being concise, integrating members, and show-ing evidence of critical thinking. Class time was reserved for students tomeet in their groups. The instructor met with each group at least once persession to assess group process and answer any questions the group mayhave.
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TABLE 1. Design and “Managed Care and Social Work” Course
Lecture Topics
History and evolution of managed care in the United States• Structure, values, and philosophy of managed care organizations• Types of managed care organizations• For-profit, market-based values• Contract-based services
Managed care practices and cost containment methods resulting in the reengineering of healthand mental health care• Single point access• Pre-authorization for extensive tests and higher levels of care• Shift delivery of care to ‘appropriate level of care’• Shift risk to population-based approaches and carve-outs• Utilization review• Cost reduction via discounting, capitation, at-risk contracting, predetermined fee schedule• Implement practice guidelines for providers• Consumer/family obligation for self-care adherence
Provider ethical issues in a managed care environment• Confidentiality• Conflict of interest• Informed consent• Abandonment and negligence• Quality of care provided
Provider systems related to delivering care in a managed care environment:• Administrative systems• Clinical systems and staff resources• Integrated financial and delivery of care systems• Integrated information systems for feedback• Accountability systems (reporting, marketing, continuous quality improvement, etc.)
Reimbursement and pricing strategies in a managed care environment
Negotiating and contracting with managed care organizations
Utilization review strategies and consumer empowerment in a managed care environment
Clinical assessment and interventions in a managed care environment
Medicaid and Medicare managed care issues
Managed care issues in specific settings• Mental health inpatient and outpatient• Health inpatient and outpatient• Underserved areas: rural and inner-cities
Managed care issues with specific populations• Severely and persistently mentally ill populations• Minority populations• Substance abuse populations• Chronically ill populations
Measuring effectiveness and conducting outcomes studies in a managed care environment
Regulatory entities and “watchdog” organizations scrutinizing managed care practices;Provider/consumer coalitions and advocacy strategies to improve managed care practicesLegislation and litigation related to managed care practices
Current trends and future practices of managed care entities
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The final paper, which was turned-in three weeks after the class met,gave students the opportunity to apply managed care concepts to a par-ticular issue, case, problem or theoretical issue of their choice. Topicsranged from treatment interventions, ethical and social justice issues(patient abandonment and negligence, dual agent conflict of interest,mental health parity, etc.), population-based concerns (elderly, chil-dren, minorities, etc.), to organizational systems that support adminis-trative functions, and management approaches that can be utilized in amanaged care environment. Each student’s evaluation was based uponhis or her presentation of the literature and its pertinence for furtherstudy (in terms of prevalence, costs, affected people/systems/organiza-tions, etc.); choosing an approach and explaining this choice; identify-ing appropriate strategies, resources, and systems that support thisapproach; discussing intentional and possible unintentional outcomes;effectively using critical thinking (purpose of action, problem-solving,concepts central to thinking process, assumptions made, data and factsused, interpretation, conclusions, and implications of those conclusions);and writing (using effective language, which is concise, well-organized,and incorporates logical flow, clarity, and grammar).
EVALUATION OF THE COURSE
Students who took the Managed Care and Social Work course duringsummer session 2000 were recruited to participate in the evaluation ofthe course. A 15-item pre-post questionnaire surveyed student knowl-edge of managed care, with 5 questions in each of three principle ar-eas. The areas were (1) the emergence and evolution of managed care;(2) the effect of managed care on services; and (3) the role of research.The emergence and evolution of managed care included questions aboutthe history, values, philosophy and operations of managed care organi-zations. The effect of managed care on services included questionsabout specific knowledge and skills needed for direct practice; ethicalissues for social workers; the impact on at-risk populations; and man-agement tasks needed for social work practice within a managed careenvironment. The roles of research included questions about knowledgeand skills necessary to determine the most effective and efficient ser-vice delivery, understanding the necessity for outcomes evaluation andcontinuous quality improvement, and the importance of applying exist-ing research to develop or support practice methods to meet consumerneeds. The items were true/false or multiple-choice in which correct an-
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swers were scored as one point. Each of the three areas was scored andanalyzed separately. The scores for each of the areas ranged from zero(no correct answer) to five (all items answered correctly).
Participants were also asked to complete a qualitative course evalua-tion consisting of seven open-ended questions asking what course con-tent and teaching methods were the most and least helpful, what aspect ofthe course was of greatest interest, if and how the student’s expectationswere met, and how could the course be improved. Additional commentswere also solicited. In addition, all students were asked to complete theuniversity’s standard instructor and course evaluation. The university’sstudent evaluation is scored from 1 (poor) to 5 (excellent) in four catego-ries: course mean, instructor mean, overall school course mean, and over-all school instructor mean.
RESULTS OF THE EVALUATION
Thirty-three of the 34 students who took the elective course agreed toparticipate in the study. All participants were matriculated students in theMSW program. They included full-time and part-time students rangingfrom their first semester to their final year. The class was composed of27 women (79%) and 7 men (21%). The pre-post surveys were exam-ined to discern if any changes in the scores from enrollment to coursecompletion were significant. Paired samples t-tests results showed asignificant increase in the students’ knowledge in two of the three prin-ciple areas. Table 2 depicts the results in each area.
There was a significant improvement in student knowledge of the ef-fects of managed care on services (.001 level) and the roles of researchin managed care (.05 level). However, there was no significant differ-ence in the students’ pre-post test scores on the history of managed care.Twenty-eight of the 33 participants completed the study’s qualitativecourse evaluation. Student responses to open ended questions pertain-ing to the course content and teaching methods were then categorized.Students were also offered the opportunity to comment and these werealso included in the analysis. A number of items were depicted by stu-dents as being effective as well as those considered not effective. Table 3depicts the details.
Students identified as most helpful course procedures such as hand-outs, guest speakers, the required group research project, the lectureand course materials, the course structure, assigned readings, and theinstructor’s encouragement of class discussion. Content they found
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especially helpful or interesting included instructor’s knowledge ofmanaged care systems, MCOs philosophy and operations, how to navi-gate MCO systems, specific social work practice issues, MCO systemsissues, MCO policy issues, MCO issues with specific populations, andat-risk groups and the history and evolution of managed care. Approxi-mately the same number of students who found the group project to behelpful also found it to be least helpful. Student dislikes included thetextbook (Humane Managed Care?), the fast-paced and condensed pre-sentation of the course, the formal lectures, and the amount of readingsand details related to financial reimbursement, hospitals and mentalhealth. When queried if the course met their expectations, a total of 21students responded affirmatively. Five responded that the course ex-ceeded their expectations. No student responded that his or her expecta-tions were not met.
An additional student evaluation was the university’s standard instruc-tor and course assessment. All students taking the course completed theevaluation and consistently rated the course and instructor as “very good.”The results were 4.27 (with 5.0 high) for the course overall, compared tothe overall school course mean of 4.38 for that semester, and 4.55 for theinstructor overall right at the school mean of 4.55.
IMPLICATIONS TO SOCIAL WORK
The student evaluations of the course and the instructor’s experiencesuggest that the Strom-Gottfried’s curriculum model is a useful approach
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TABLE 2. Paired Samples of T-Tests of Managed Care Course Pre/Post Test
Pre/Post Test Mean N SD t
Category 1 SummaryHistory of MCO
Pre TestPost Test
3.123.48
3333
1.24.91
�1.459
Category 2 SummaryEffects of MCO on Services
Pre TestPost Test
3.093.85
3333
1.07.91
�4.490***
Category 3 SummaryRoles of Research in MCO
Pre TestPost Test
3.183.73
3333
1.291.01
�2.213*
*Significant at the 0.05 level**Significant at the 0.01 level
***Significant at the 0.001 level
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TABLE 3. Student Qualitative Evaluation of Managed Care Course (N = 28)
# Responses Content of Responses
What course content was most helpful?
5 Understand managed care philosophy and operations
4 Understand how social work can navigate through MCO systems
2 Assigned article readings
1 Research process for paper and group project
1 Focus on at-risk populations
1 All aspects of the course
What course teaching methods were most helpful?
12 Course handouts
11 Guest speakers
7 Group projects
6 Lectures and course materials
6 Instructor encouraged discussions and answered questions, knew subject well
5 Course structure (logical, clear, progressive)
What course content was least helpful?
9 Nothing, all was helpful
5 Textbook
3 Details related to financial reimbursement, hospital managed care, mental health
What course teaching methods were least helpful?
6 Group Projects
5 Course too condensed, pace too fast
4 Formal lectures
3 Too much reading
What was of greatest interest?
9 SW Practice issues of managed care (preparing for utilization review, practiceguidelines of MCOs, navigating MCO systems, ethical conflicts, negotiating withMCOs, performing practice outcomes, business/economics related to providingservices)
8 Systems issues of managed care (how social workers are affected, costcontainment practices, pharmaceutical practices, barriers to prevention practices)
4 Policy issues related to managed care
3 Managed care in specific settings/populations (Medicaid managed care, healthcare, minority populations, chronically ill populations, severely mentally illpopulations, Medicare populations)
3 All aspects of the course was relevant and interesting
3 Doing the research for the group project and final paper
1 History and evolution of managed care
Were your expectations of the course met? How?
14 Yes. Course content and structure ( MCO driving influences, values, methods, andprocedures; better understanding of what SW needs to be aware; readings,lectures, and research)
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for social work students. The model approaches teaching managed carefrom three key areas of knowledge: how managed care practices haveemerged and evolved, how services are redefined within managed careprocesses, and how research and outcome measures guide social workpractice. Student learning in each area varied, based on their priorknowledge and perception of relevance.
History of Managed Care Practices
Students showed no change related to learning the evolution of man-aged care practices. Further examination of this knowledge area re-vealed that the majority of the students already knew the historicaldriving forces that helped to usher in managed care such as governmentand employer fiscal and accountability concerns. They were also famil-iar with the evolution of member-based services, cost-containmentstrategies, and carve-out services. However, only half the students un-derstood the history of at-risk-contracting practices at the beginning ofthe course. Although 84% of the students showed improved knowledgein this area, the importance of including this information in a managedcare course merits further discussion. A primary challenge for providersystems is positioning clinical services in a market-driven environment.Providing an adequate and stable consumer population is crucial for re-
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# Responses Content of Responses
5 Yes (no further explanation)
4 Exceeded expectations. “I became more interested than I expected.”
1 Yes. Learned public and private health care delivery policy issues
1 Yes. Reinforced and added to current knowledge of behavioral health
How to improve the course?
17 Include a free weekend in-between the two consecutive weekend meetings
5 Change teaching methods (more time for discussion in class, briefer lectures,eliminate final paper, more guest lecturers, include presenter with child welfareexpertise)
5 Nothing, the course is excellent
Additional comments
4 Excellent course
4 Appreciated instructor’s teaching style, availability, responsiveness, flexibility withstudent needs
1 Appreciated offering an intensive course for students who work full-time
1 Require prerequisites of 1st year policy, micro, and macro courses
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alizing effective clinical outcomes. However, this can be difficult toachieve in a competitive marketplace where managed care organiza-tions have the advantage. Volatile shifts of large consumer groups fromone provider organization to another may result from competitive bid-ding for capitated consumer populations. Also, negotiated contractsmay not provide sufficient reimbursement to adequately serve individu-als with greater medical or psychosocial needs. Investigating the evolu-tion of at-risk contracting reveals the pitfalls associated with theseissues as they impact providers and consumers. Social workers can stra-tegically position their organizations for operations, once they becomeaware of the details and unintentional outcomes of at-risk contracting.
Redefined Services within Managed Care Processes
Students showed deficiencies in understanding brief treatment ser-vice provision. Managed care espouses a health and mental health focuson prevention efforts, early diagnosis, and treatment. The students dem-onstrated a varying knowledge of the brief treatment models that man-aged care has embraced. Most students understood mental health inter-ventions as solution-focused treatment, cognitive therapy involvingfixed time limits, group as opposed to individual therapy, and actiontherapy including homework, etc. Integral to managed-care health andmental health treatment approach is a bio-psychosocial evaluation andintervention process concentrating on a presenting problem identifiedas medically necessary. Students did not associate the bio-psychosocialapproach, as promoted by MCOs, as directly influenced by disease de-fined standard diagnostic nomenclature such as ICD-10 or DSM-IV.
Educators need to make the connection that managed care treatmentis a medical approach, which expects patient improvement in terms ofthe condition or level of functioning. Practitioners utilize practice stan-dards that result in the most cost-effective services (Reid, 1998). Thisapproach shifts care to the most cost-effective service level perceivedappropriate by the MCO. Consumers usually have two mechanisms foraccessing care. The first is unlimited access to services when financialarrangements for specified services have been contractually establishedbetween the MCO and the provider, e.g., $10 co-payment for an annualgynecological exam. However, consumers requesting certain services(e.g., elective surgery, MRI procedure, psychiatrist visit or hospitaliza-tion for depression) are required to utilize a single point of entry where a‘gatekeeper’ assesses their appropriate level of care and grants ‘preau-thorization’ for reimbursement. Thus, providers and consumers are
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constrained to focus only on the presenting problem and utilize the mostbasic test(s) to establish a diagnosis. In this way hospital stays areavoided or reduced. In addition, inpatient services require individuals tomeet considerable criteria for admission. Outpatient providers are con-strained to employ brief intervention techniques to target a specifiedproblem, which has successfully limited the number of intervention vis-its. The criteria for continuing care also acts to constrain treatment focus.Providers must demonstrate improved patient status while establishingthat continued treatment would result in improvement of the conditionor of the level of functioning.
The students were aware that certain populations were at risk for re-ceiving undertreatment in managed care environments. Many popula-tions do not have the personal or community resources to access (and/orfollow through with) treatment approaches that do not include factorsrequiring greater medical and mental health utilization, i.e., psychoso-cial issues, mental health and health comorbidities, low-income andcultural issues. However, students were not aware that pressures to con-tain costs may promote practices that ration care (Broskowski, 1995).Concerns related to rationing care include patient being denied special-ist care, reduction in services, disproportionate services among differ-ent MCOs (e.g., one plan allows for bone marrow transplants, anotherdoes not), and denial of heroic interventions that may extend life.
Students consistently displayed insufficient knowledge of the fi-nancial influences operating in a managed care environment. A curric-ulum that reveals the relationship between treatment approaches andfinancial permutations is essential for social workers successfully ne-gotiating contracts that sufficiently reimburse for services provided.Reimbursement and pricing strategies are tools that will enhance deci-sion-making when engaging in contract negotiations with MCOs(Gibelman & Whiting, 1999). Reimbursement training should includebundled payments (reimbursement based on the entire therapeutic epi-sode) and problems associated with dual discounting in Medicare MCOstrategies (per-diem rates based on a discount from federal DRG rates).In order to understand reimbursement issues, students should first be in-troduced to means for identifying the percentage of revenue generatedfrom each MCO reimbursement source, detecting the number of con-sumers served (utilization) per service per MCO reimbursement source,and determining the direct costs (all expenses associated with staff pro-ductive time) and indirect costs (expenses associated with non-produc-tive time, administrative and support services, etc.) associated with the
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delivery of a service in relationship to the reimbursement amounts perMCO source (Welch, 1998; Schwartzben & Finkler, 1997).
Specific pricing training that would serve social workers is differen-tial cost analyses. Differential costs analyses are performed by comput-ing fixed and variables costs of operating a service. Fixed costs are thenon-varying costs of providing a set amount of services such as salaries,rent, insurance, etc. Variable costs are those that vary with the amountof service provided such as supplies, transportation, etc. One differen-tial cost analysis is the breakeven point for delivering a service. Thebreakeven point allows providers to identify the price of the service af-ter all costs are met, but no profit is realized. Once the breakeven pointis achieved, then a profit margin of two to five percent can be computed.This is important in setting the fee for services. Variable costs used incalculating the breakeven point can be underestimated, or the demandfor the service can be greater than expected. Thus inclusion of a profitmargin provides for the impact of uncontrollable variables (Martin,2001). Setting fees based on the profit margin amount enables socialworkers to determine if the MCO contract will fully cover the cost of theservice program. If the MCO contract reimburses at less than profitmargin amounts, and additional resources are not available, then thecontract will eventually create organizational instability as the providerbecomes incapable of meeting clinical and financial obligations.
Additional differential costs analyses that are important to managedcare contracting are maximum efficiency and surplus capacity. Maxi-mum efficiency determines the most efficient level for staff providing aservice (e.g., the number of consumers one social worker can service).Surplus capacity, which is closely related to maximum efficiency, is thedifference between the current service capability and the maximum ef-ficiency. For example, if one social worker is able to serve 50 consum-ers, but only 30 are being served, then 20 consumers that could beserved is the surplus capacity. These financial analyses provide valu-able tools to assess if the reimbursement contract with the MCO ade-quately covers the utilization level of contracted members. If the MCOis not willing to specify the utilization level of a population under con-tract consideration, then it will be difficult to determine if the providercan adequately cover consumer needs. If consumer demand for servicesis greater than the provider capacity, then the provider is forced to in-crease costs by hiring additional staff to meet the demand at no increasein reimbursement levels. If the provider does not increase service ca-pacity, it is more likely that access to consumers will become limitedand quality of care issues will surface.
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There are other cost containment mechanisms linked to clinical careof which students were minimally aware. One mechanism is MCO’s ex-panding primary practitioner roles and diminishing care by specialists,including mental health specialists. The most controversial cost con-tainment mechanism is provider incentive programs to limit care. MCObonus programs rewarded providers who efficiently managed con-sumer care by disbursing surplus consumer care monies. These surplusmonies are realized by providers limiting consumer hospital admissionsand stays, decreasing the number of extensive diagnostic tests, and lim-iting referrals to specialists. Risk sharing incentive mechanisms alsoaim to limit care. These programs act as disincentives to providers whodo not manage consumer care efficiently. Some ‘at-risk’ contracts limitthe amount of money the provider receives per member per month. Sub-sequently, if consumer care costs extend beyond the contracted amount,the provider must incur the cost. Another type of ‘at-risk’ contract re-quires the provider to pay the MCO a set amount for overrun costs. Theintroduction of these incentive programs, which are common businesspractices, create ethical dilemmas in the healthcare arena. Once stu-dents understand the mechanisms of such cost containment strategies,they are better prepared to confront the negative impact such practiceshave on consumer care issues.
The students had only a moderate understanding of the ethical dilem-mas providers may experience in managed care environments. Man-aged care is often seen by social workers as antithetical to acceptablepatient care. MCOs are frequently market-driven for-profit entities withno obligation to provide services beyond specified contractual arrange-ments. They sometimes have the discretion to select out populationsascertained to be at too high risk (Buchanan, 1998). Social work is com-mitted to guaranteeing equal access to quality health care for all, so so-cial workers may believe managed care approaches limit care to containcosts, and thereby perpetuating injustice. Students significantly im-proved their knowledge after approximately three hours of class lectureand discussion time dedicated to ethical conflicts when operating withina managed care environment. Conflicts addressed were compromisingpatient confidentiality, since multiple persons are involved in treatmentdecisions; conflicts of interest related to utilization review processes,which may curtail the best care; threats to informed consent where lim-its are placed on patient treatment options; and patient abandonmentand neglect, where reimbursement has been denied when a socialworker has determined that the patient needs to continue in treatment(Galambos, 1999; Strom-Gottfried, 1998).
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The course used lectures and class discussions to help develop skillsthat would help students respond to such value conflicts. These skills in-cluded: (1) knowing and implementing administrative systems to trackregulatory and legal requirements, risk incidents, and threats to ethicalstandards for care involving staff conduct; (2) actively helping patientsto learn their coverage, and to understand recommended procedures,potential risks, alternative procedures, and the utilization review pro-cess (limitations on services and grievance procedures) to guard in-formed consent and confidentiality; (3) knowing how to guard againstneglect and abandonment by developing organizational policies allow-ing practitioners to have some discretion over the allocation of re-sources and set up service guidelines denoting the minimum and maxi-mum amount of services allowed–established within evidenced-basedtreatment guidelines and professional norms; (4) knowing how to de-velop organizational peer review and quality improvement commit-tee(s), which monitor client services in terms of quality care, consumerchoice, and satisfaction in order to limit injustice; and (5) knowing howto create an administrative team that monitors costs to the organizationfor providing services, as well as assesses if services are meeting patientneeds (outcomes). Students also engaged in discussions around nego-tiating with reviewers for additional services when appropriate, and ad-vocating through community and organizational coalition building(which may consist of professional organizations, treatment organiza-tions, and advocacy groups, e.g., Alliance of the Mentally Ill).
Research and Outcome Measuresin a Managed Care Environment
Students demonstrated the greatest significant improvement in theknowledge area related to understanding the roles of research in a man-aged care environment. Issues that were initially troublesome for themwere differentiating internally developed treatment guidelines employedby MCOs from evidence-based guidelines. Guidelines developed byMCOs may or may not include rigorously derived guidelines for treat-ment. Evidence-based guidelines are derived from scientific researchand are based on efficacious interventions, often without regard for thefinancial impact for providing the intervention. MCO guidelines in-clude a mixture of evidence-based practices and practice wisdom basedon brief treatment models. As new research identifies the most effectivetreatment, policy analysts, and advocacy groups successfully pressureMCOs to adjust their criteria.
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Students also found practitioner treatment outcomes, especially mea-sures of treatment outcomes to be problematic. This was remedied oncethey understood that quality care is composed of the effectiveness of thecare, the efficiency of the care, and the satisfaction of the consumer forthe care received. Measures of treatment include interventions used,severity of the disease, risk for developing a disease or condition,presence of comorbidities, payer performance, and practitioner per-formance. It was also important to differentiate for students betweenpressures on providers and insurance plans to demonstrate effectivetreatment outcomes. Providers are pressured by MCOs to demonstratethat their treatment approach effectively alleviates consumer symptomsin a cost-efficient manner. Insurance plans, on the other hand, are pres-sured by government, advocacy groups, and accreditation entities topromote quality improvement efforts. These quality improvement ef-forts are measured by the insurance plan’s performance and consumeroutcomes. Performance outcomes revolve around the insurance plan’soperations that they have direct control over. However, consumer out-comes are dependent on how effectively contracted practitioners pro-vided services to the insurance plan’s members. Linking consumeroutcomes to insurance plan performance makes MCOs more dependenton providers. Such an accountability tactic may improve care in thatproviders and MCOs will collaborate around consumer care issues torealize improved outcomes.
CONCLUSION
In summary, social work students need a basic grounding in the prin-ciples of managed care if they are to practice successfully in today’s ser-vice environment. Given the results of the pre-post test, it is recom-mended that less class time be spent on background information on thehistorical driving forces that ushered in managed care. However,greater time should be spent covering material related to understandingorganizational operations of at-risk contracting. Particularly essential isimparting fiscal acumen that addresses the juxtaposition of delivery ofcare to at-risk reimbursement (Vourlekis, Ell, & Padgett, 2001; Pat-terson, McIntosh-Koontz, Baron, & Bischoff, 1997; Meyer & Stotsky,1995). Curricula should include the impact of financial reimbursementon the implementation of delivery of care models, on clinical decisionmaking, on ethical dilemmas, and on resources dedicated to conduct
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clinically related administrative functions–including utilization reviewtasks and outcome evalu- ations.
It is equally important to empower students with knowledge that en-hances their ability to advocate for consumer care and improved man-aged care operations. Social workers act to educate consumers who arenot aware of the limitations of their benefits, utilize advocacy strategiesthat will successfully support consumer care, and mobilize stakeholdergroups to monitor practices and pressure MCOs to operate more equa-bly and maintain a commitment to quality care.
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Buchanan, A. (1998). Managed care: Rationing without justice, but not unjustly. Jour-nal of Health Politics, Policy & Law, 23(4), 617-634.
Emenhiser, D., Barker, R., & DeWoody, M. (1995). Managed care: An agency guideto surviving and thriving. Washington, DC: CWLA Press.
Galambos, C. (1999). Resolving ethical conflicts in a managed health care environment.Health & Social Work, 24(3), 191-197.
Gibelman, M., & Whiting, L. (1999). Negotiating and contracting in a managed care en-vironment: Considerations for practitioners. Health & Social Work, 24(3), 180-190.
Health Insurance Association of American (HIAA), (1999). Source book of health in-surance data: 1999-2000. HIAA: Washington, DC.
Karger, H.J., & Stoesz, D. (1994). American social welfare policy: A pluralist approach(2nd ed.). White Plains, NY: Longman Publishing Group.
McBride, T.D. (1998). Disparities in access to Medicare managed care plans and theirbenefits. Health Affairs, 71(6), 170-180.
Meyer, R. E., & Sotsky, S. M. (1995). Managed care and the role and training of psy-chiatrists. Health Affairs, 14(3) 65-77.
Patterson, J.E., McIntosh-Koontz, L., Baron, M., & Bischoff, R. (1997). Curriculumchanges to meet challenges: Preparing MFT students for managed care settings.Journal of Marital & Family Therapy, 23(4), 445-459.
Perloff, J. (1996). Medicaid Managed Care and urban poor people: Implications for So-cial Work. Health & Social Work, 21, 189-195.
Reid, W.J. (1998).The paradigms and long-term trends in clinical social work. In R.Dorfman (Ed), Paradigms of clinical social work. (Vol. 2). New York: Brunner-Maze.
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Strom-Gottfried, K. (1998). Applying a conflict resolution framework to disputes inmanaged care. Social Work, 43(5), 393-401.
Strom-Gottfried, K. (1997). The implications of managed care for social work educa-tion. Journal of Social Work Education, 33(1), 7-18.
U.S. Department of Health and Human Services. (2000). Healthy people 2010. Wash-ington, DC: Office of Public Health and Science.
Vourlekis, B.S., Ell, K., & Padgett, D. (2001). Educating social workers for healthcare’s brave new world. Journal of Social Work Education, 37(1), 17-191.
Welch, W.P. (1998). Bundled Medicare payment for acute and postacute care. HealthAffairs, 17(6), 69-81.
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