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Despite Backlash, Most Physicians Continue to Contract with Managed Care Plans
Plans' Use of Fixed, Per Patient Monthly Payments Declines Sharply
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ASHINGTON, D.C.—Despite the backlash against managed care, nine out of 10 U.S. physicians continued to contract with at least one managed care plan between 1997 and 2001, according to a national tracking study released today by the Center for Studying Health System Change (HSC).
Among physicians with managed care contracts, total average practice revenue from managed care actually increased from 43 percent in 1997 to 46 percent in 2001. At the same time, physicians average number of managed care contracts grew from 12.4 in 1997 to 13.1 in 2001, probably reflecting health plans efforts to broaden networks and give consumers more choice of providers.
"The findings are a bit surprising given the intense backlash against managed care and stories about physicians dropping out of managed care plans," said Paul B. Ginsburg, Ph.D., president of HSC, a nonpartisan policy research organization funded exclusively by The Robert Wood Johnson Foundation. "Managed care remains an integral part of the practice of medicine, but the nature of the relationship between physicians and managed care plans is shifting to a kinder, gentler approach."
While managed care plans continued to play a prominent role in most physicians practices, the financial relationship between many doctors and plans changed between 1997 and 2001, with a significant decrease in plans use of fixed per-member, per-month payments, or capitation. Of physicians with managed care contracts, the proportion of practices receiving some revenue from capitation, or risk contracting, dropped from 57.4 percent in 1997 to 48.6 percent in 2001—an almost nine percentage point decline.
"Many doctors and health plans have renegotiated the way they do business, and many physicians are no longer as much at risk for high-cost patients as they once were," said Bradley C. Strunk, an HSC health research analyst who co-authored the study with HSC Senior Researcher James D. Reschovsky, Ph.D.
The studys findings are detailed in a new HSC Tracking Report—Kinder and Gentler: Physicians and Managed Care, 1997-2001—available here. Based on results from HSCs Community Tracking Study Physician Survey, a nationally representative survey involving about 12,000 physicians, other key findings include:
While relatively few physicians are subject to financial incentives, tools such as profiling, satisfaction surveys and treatment guidelines have broader applications for care management. Over time, the influence of these care management tools has grown—regardless of a link to physician compensation. For example, the proportion of physicians reporting that feedback from patient satisfaction surveys had a "very large," "large" or "moderate" effect on their practice of medicine increased from 58 percent in 1997 to 61.6 percent in 2001.
Likewise, the proportion of physicians reporting that treatment guidelines affected their practice of medicine increased from 45.9 percent in 1997 to 56.2 percent in 2001. The effect of profiling was unchanged among all physicians between 1997 and 2001, with 34.3 percent being affected in 2001.
The Center for Studying Health System Change is a nonpartisan policy research organization committed to providing objective and timely insights on the nations changing health system to help inform policy makers and contribute to better health care policy. HSC, based in Washington, D.C., is funded exclusively by The Robert Wood Johnson Foundation and is affiliated with Mathematica Policy Research, Inc.