Do private medical insurers who challenge medical opinion before paying a claim affect a patient's treatment? John Howard finds out
Managed care has been a feature of private medicine for almost 20 years and its appeal is not difficult to understand. 'Managed' implies hard-nosed efficiency and the application of controls, while 'care' conveys a friendly sense of selfless concern for others. As a result, most insurers class all the measures they put in place for controlling cost and quality as falling within this magical definition.
It is possible to see a difference between those organisations that do not think it worthwhile to challenge medical opinion before paying for treatment and those, most prominently CIGNA, that do. Among the questions asked are: Is the procedure necessary? Is it happening in the right place? Or, in the case of hospital admissions, is the patient in hospital too long?
Do it the hard way
The interesting issue about this type of 'hard' managed care is knowing whether or not the actions of the insurer made a clear difference to the patient's experience. Would the outcome have been the same if the insurer had not bothered to ask its various questions? How do we know these procedures are not just an ineffective paperchase? We should also remember the ultimate decision remains with the patient. The main insurer will still pay against its better judgement if this is the patient's wish.
So what hard data is there to measure the performance of managed care systems? The answer is very little. Insurers seem happy to stress the effectiveness of their processes and give anecdotal evidence of successfully-handled cases. But they rarely publicise any statistics that might help to objectively evaluate what they are doing.
BUPA is an exception. It only operates 'hard' managed care on two procedures: wisdom teeth extraction and hysterectomy. But in the first year of its wisdom teeth programme, it claims the number of episodes reduced by 22% and saved BUPA £654,000. The hysterectomy statistics showed a 10% reduction since the start of the programme, producing a saving of £631,000.
On the face of it, this is impressive, but it is not the full story. Medical insurers, even large ones such as BUPA, are a relatively small influence on the lives of many doctors. Far more influential are their peers, their professional bodies, the General Medical Council and the various levels of the NHS, where they spend most of their working lives.
Consultants are expected to keep up-to-date with current practices and also submit to audits of their work by colleagues.
In April 1999, the National Institute for Clinical Excellence was set up to assist consultants in particularly difficult or controversial areas. In addition, the Commission for Health Improvement, set up by the Government in April 2000, has a remit to ensure an effective system of clinical governance, as the process is called, takes place in every NHS Trust and Authority.
None of these bodies would describe what they do as 'managed care,' but their combined efforts seem to have led to fewer teeth and wombs being removed even before BUPA's initiative started.
Number crunching
According to Department of Health statistics, the number of wisdom teeth extracted by the NHS from April 1999 to April 2000 was 40,368 and, for the following year 30,763; a reduction of 23.8% compared with BUPA's 22%. The statistic for hysterectomy is more favourable to BUPA's claims: 36,734 women having undergone the operation with the NHS in 1999/2000 compared with 33,674 in 2000/01, a reduction of 8.3% compared with BUPA's overall 10%.
These figures can never be entirely comparable, but they do suggest other influences - rather than BUPA specifically - have contributed to its reductions. This is certainly the claim of its main rival, AXA PPP healthcare, which does not operate a 'hard' managed care system. While unable to quote exact numbers, it states its records for these two procedures show a similar pattern to BUPA's.
One means of establishing whether or not insurers can make a difference is to focus closely on those occasions where they have refused to approve a procedure when asked to do so. If the patient does not have the procedure, it can be assumed this was due to the insurer's intervention.
BUPA claims that since the start of its initiative, around 2.5% of all requests for wisdom teeth extraction and hysterectomy did not go ahead. CIGNA claims greater success. The provider has stated it prevents 5% of all procedures - not just the frequently-performed ones - from taking place. This is impressive, but one would feel happier if CIGNA's statistic was part of a comprehensive report regularly made public showing detailed figures for every procedure.
Overall, it is difficult not to think insurers operating a 'hard' brand of managed care are, for the most part, simply bearing witness to a process that would have happened without them. Furthermore, the process itself is not without its own costs.
BUPA, for example, employs a team of 34 nurses, who are supported by 21 advisers, to provide a 24-hour managed care service.
CIGNA, with less than a quarter of BUPA's market share, employs 44 staff in its managed care section. It also makes a specific charge for managed care, normally £20 per registration for corporate clients.
On cost grounds alone, an insurer that chooses not to invest heavily in managed care is not missing out. It saves on administration costs, while still enjoying most of the advantages of changes in medical practice initiated by others, including to some small degree, other insurers.
Good medicine
But cost is not the only consideration in managed care. Most insurers say its importance is a long way behind trying to achieve the best quality
of medicine for the member. But this opens up the issue of what constitutes good medicine. Not all insurers think alike on this, as can be seen in the different approaches BUPA and CIGNA take in treating cancer patients.
BUPA, in common with most insurers, extends benefits to cancer patients throughout the course of their illness. It has established a network of specialist centres to deal with many of the most common cancers. The hospitals concerned are selected following extensive reviews and are seen by BUPA as having the best outcomes and conformity to best practice. The networks span both NHS and private hospitals with most being in the independent sector.
CIGNA's approach is different. All cancers that have spread from the initial site are classed as chronic and therefore ineligible for further benefit. Although this has the effect of lessening its cost liability to a huge degree, CIGNA claims that through its managed care programme, it can direct the patient into NHS care with minimal disruption to treatment. Central to this policy is CIGNA's belief that the quality of NHS cancer care is likely to be as good as, if not better than, a private hospital.
Many would disagree with this view. BUPA's approach suggests it is too simplistic and a patient could be transferred from a good quality private hospital to a badly-performing NHS unit. The point is not to make judgements on medical issues. It is to show that while managed care systems may stop unnecessary treatment or ensure it takes place in the right environment, this is only one insurer's view.
So what conclusions can be drawn about managed care in UK private medicine? First, it is a fact of life among all insurers, and a necessary one, which as medical activity becomes increasingly complex, no credible insurer can avoid having trained staff on hand to help members, and providers find the best way through their rules and benefits. The effect of any insurer may be more rubber-stamp than real, and, in so far as it has taken place, there is no certainty that the member is better off. Purchasers of private medicine should take an interest in managed care, but a sceptical one.
John Howard is a senior benefit consultant at Mellon, human resource and investors solutions division
COVER notes
• Although insurers may note a reduction in the number of operations they fund when medical opinion is challenged, the number of procedures over time tallies with trends seen in NHS-funded operations.
• There is no concrete evidence that a hard approach to managed care by insurers reduces claims or saves on cost.
