Beyond the Water's Edge: Charting the Course of Managed Care for People with Disabilities - Conference Resource Book. A Vision for the Future: Interview with Gerben DeJong, Ph.D.


Jane Mattson Prince, Ph.D., and Janet Haas, M.D.
Journal of Head Trauma Rehabilitation (forthcoming)

Q: You obviously have a very strong interest in disability and health policy issues. Could you summarize your many research projects in disability and health policy by telling us about the major themes they encompass?

A: Our health services research portfolio falls into two main categories of research issues. The first category of issues pertains to medical rehabilitation as a distinct provider group in the American health care system with its own financing, service delivery, and outcome issues. The second category of issues pertains to people with disabilities as a distinct consumer group within the larger health care system with its own health care needs, access issues, and outcome concerns. In the second category, we are concerned with the full spectrum of health care services, not only medical rehabilitation services, that people with disabilities may need.

Our research addresses the full spectrum of health service issues--health care need, capacity, access, service delivery, utilization, costs, outcomes, consumer satisfaction, and health care financing. In addition to our investigator-initiated and contract research projects, we are also home to the Research and Training Center (RTC) on Medical Rehabilitation Services and Health Policy funded by NIDRR [National Institute on Disability Research and Rehabilitation]. We also conduct, with Georgetown University, a health policy research fellowship program for people with disabilities.


Q: In your description of your research, you touched on an area that is of enormous interest to brain injury professionals. Brain injury programs have proliferated in the past 16 years but recently, many have recently closed and while others have consolidated or merged. This change in the industry may have reflected the tremendous changes in reimbursement precipitated by managed care. Managed care has had a significant impact on who has care and for how long they have it. Do you think that, by the Year 2000, managed care will be the dominate way in which we deliver and pay for health care?

A: Yes, very definitely. Approximately, 70% of all people who participate in employer-sponsored health plans are now enrolled managed-care plans. Even Medicare and Medicaid, the first and third largest payers of brain injury rehabilitation services, respectively, are converting rapidly to managed care. I predict that, by 2000, over 50% of the Medicare and 85% of Medicaid will be managed care. Other payers of brain injury rehabilitation such as commercial insurers, workers' compensation, and CHAMPUS have also introduced managed care options that will become more prevalent in the years to come.

Those who look to Medicare as the remaining bastion of fee-for-service medicine should think again. Medicare and Medicaid remain the fastest growing portions of the federal budget. Politicians are perfectly content to let the "market forces" of managed care bring down the costs of these two programs and make the hard decisions for them. The politics of the federal deficit and the economics of health care converge on managed care. In other words, managed care is the harmonic convergence of deficit politics and health economics. It is unstoppable. We have to figure out how we can make managed care work for the people we serve.


Q: How is managed care being implemented in the public sector especially in Medicare and Medicaid? Do individual state Medicaid programs contract with private managed health care plans such as health maintenance organizations (HMOs)? Will each state offer more than one managed care plan to its Medicaid participants?

A: In many markets, Medicare beneficiaries can choose whether they want to enroll in a managed care plan. In a highly managed care market such as the Los Angeles, about 40% of all seniors already participate in a managed care plan. In the parlance of the Medicare program, these plans are commonly referred to as "at-risk Medicare contracts." The Medicare program sets the premium at 95% of what Medicare theoretically would have spent for the same population adjusting for age and county of residence.

Until recently, Medicare was introducing managed care more quickly than state Medicaid programs. Currently, state Medicaid programs are converting to managed care more rapidly than the Medicare program. Medicare beneficiaries can usually choose between a managed care and a fee-for-service plan. In most states that have converted, Medicaid recipients can only choose between two or more managed-care plans.

State Medicaid programs typically invite proposals from managed health care plans in response to RFPs [requests for proposals]. States typically like to see two, three or more HMO's in each market in order to spur competition. The managed-care industry is already bidding vigorously on Medicaid contracts. One has only to read the reports of Wall Street analysts to appreciate how managed care plans are poised to move aggressively into the Medicaid market.


Q: Some of the larger HMO's have significant experience working with catastrophic injuries. Companies such as Kaiser Permanente, US Healthcare, and others may have had good results in managing these cases. Do you think that this track record will help them compete successfully for Medicaid contracts?

A: I cannot attest to the track records of Kaiser and US Healthcare with respect to catastrophic injuries. Yes, having a good track record is important in helping secure contracts. I doubt, however, that a health plan's track record with catastrophic injuries is being examined all that closely at this time. Managed-care plans scrambling to get into the emerging Medicaid markets are ill-equipped to address large populations of people who have disabling health conditions. Up until recently, managed care's largest market consisted of people who participated in employer-sponsored plans. Moreover, the first Medicaid participants to be enrolled managed care have been AFDC [Aid to Families with Dependent Children] recipients, not SSI [Supplemental Security Income] recipients [who are also Medicaid eligible]. Employer-sponsored enrollees and AFDC recipients are, on average, much healthier and less impaired than the disabled populations served under the SSI program or the SSDI [Social Security Disability Insurance] program [who are Medicare eligible]. Many managed care plans are at the bottom of a learning curve as they move into those portions of the Medicare and Medicaid markets comprised of people with disabilities. I believe that, at least in the short term, many people with disabilities such as those with significant brain injuries will not be well served.

In many states, the transition of managed care has been chaotic. In the District of Columbia, for example, there have been problems with people who have not been enrolled properly with family members being assigned to primary-care gatekeepers located at the opposite ends of town. Again, remember, that Medicaid only pays about 11% or 12% for inpatient brain injury rehabilitation. This percentage is bound to increase as problems in the private health insurance market continue to get passed on to the public sector.


Q: You describe a fair amount of chaos for health care services and payment for individuals who sustain brain injuries over the next decade.

A: I don't know that it will last for ten years, but there certainly will be chaos in the short term. I believe that, over the long term, things will be better organized than in the past for reasons I hope I will have a chance to elaborate later in this interview.


Q: How will health plans and health services be organized in the future? How will that affect access to services for people with brain injuries?

A: We don't need a crystal ball. The future is already here. Our center conducted a study of how medical rehabilitation is faring in the three most highly managed-care markets in the country, namely San Diego, Minneapolis-St. Paul, and Worcester, Massachusetts. Our study uncovered a number of trends worth noting. One important trend is how managed care is forcing consolidation of providers into three or four major provider networks within each market. In the Minneapolis-St. Paul market, most providers have been organized into three main "integrated service networks" or ISNs for short. For people with brain injury, their access to services will depend on how their health plan is tied to one of these networks and whether the network includes the full range of health services that people with brain injuries need--from initial acute care and rehabilitation to ongoing health care services following rehabilitation. For providers of brain injury services, their referrals will depend on whether they are a member of an ISN. If not, they are at risk of being frozen out of the market since one purpose of the ISN is to keep patients within the network.

There are even larger forces at work here and some historical perspective can be useful in ascertaining their probable impact on people with brain injuries. Until recently, our health care system was a provider-driven system that competed not on price and quality as in other markets, but largely on prestige. Prestige competition meant that providers competed on the basis of their latest technology, their academic affiliations, the size of their research grants, the credentials and size of their medical staffs, their level of specialization, and the bed-size of their institutions. Prestige competition encouraged capacity building such as the development of brain injury rehabilitation services during the 1980s. Prestige competition helped to make American health care the most sophisticated and technologically advanced in the world, but it has also led to tremendous excess capacity that made American health care frightfully expensive. With the advent of managed care and capitation payment, our health care system has become a payer-driven system where price (i.e., costs) has replaced prestige as the defining element in the competition. People with brain injuries are disadvantaged in a system that competes mainly on price because people with brain injuries may require considerable services of indefinite duration.

In the shift from a provider- to a payer-driven health care system, one element has remained, namely, risk competition where health plans and risk-bearing entities seek to avert having to enroll or serve high-risk groups with potentially high health care costs such as those with brain injury. Unbridled risk-based competition means that certain groups will be underserved, excluded, or simply priced out of the market.

Although the incentives of a payer-driven system do not bode well for people with brain injury, I believe that we are on the verge of yet another major shift in American health care, namely the shift from the current payer-driven system that competes on price and risk to a consumer-driven system that competes on price and quality as in most other markets.

Effective quality competition as both the health-plan and health-provider levels requires a number of preconditions. Most important is the availability of quality-related information that consumers, employers, and governments can use to evaluate health-plan and provider performance in determining whether to contract with, or enroll in, a health plan and its corresponding provider network. By quality-related information, I mean data about outcomes, consumer satisfaction, and health-plan disenrollment rates, adjusted, or course, for the case mix or severity mix of the people participating in a particular health plan.

Quality competition is where I see the interests of both providers and consumers converge. In the absence of sound quality information, providers of brain injury services must compete mainly on price and will find themselves ratcheted down by payers over time. Quality competition, in addition to price competition, will help to create a more level playing field for providers. Moreover, quality information is sorely needed by consumers and their representatives who need to make informed choices about where best to obtain services. Effective quality competition is essential to the survival of the nation's brain injury rehabilitation capacity.


Q: Since consumers and providers have a mutual interest, what can they do in the short term to foster effective quality competition?

A: First, the rehabilitation industry has to organize itself to develop an agreed-upon set of quality indicators. Fortunately, the industry has already made some significant advances in outcome measurement and has the basic building blocks to develop industry-wide quality indicators that can be used to evaluate the performance of both providers and health plans. I would strongly recommend the involvement of the industry's consumer constituencies to obtain both their insight and their political support for implementation.

An important technical challenge, I believe, is to develop risk adjusters or severity adjusters by which quality indicators can be adjusted for the case mix of people served in various programs and health plans. Only then can we make effective comparisons across providers and health plans.

Second, consumers and providers need to pressure their respective state governments to make sure that, as their Medicaid programs convert to managed care, there be a choice of plans in each state and that there be quality indicators across a whole spectrum of health services, including brain injury services, by which consumers can make informed choices about health plans. Not every consumer needs to be a sophisticated shopper of health plans but a well-informed minority can alter a health plan's market share and can be the opinion leaders that cause others to follow suit.

Third, consumers and providers need to pressure the federal government to insist that there be comparable quality indicators in both the Medicare and Medicaid programs across state lines. Some degree of standardization will be needed in order to ease the burden on health plans and providers who operate across state lines. Standardization will also facilitate comparisons of comparable health plans and providers in different states.

Fourth, brain injury providers and consumers need to pressure quality standard-setting organizations such as NCQA [National Committee on Quality Assurance] which accredits managed-care plans on behalf of large-group purchasers in both the private and public sectors. National accrediting bodies such as NCQA need to include rehabilitation indicators in their standard repertoire of quality measures.

There is much more that can and should be done. The point is that the brain injury community, both consumers and providers, should insist on a level-playing field on which providers can compete and consumers can choose.


Q: Even if we create a more level-playing field, will there not be serious discontinuities in health care coverage for people with newly-acquired brain injuries? In the past, many individuals has unlimited coverage under their automobile no-fault insurance; today fewer individuals have substantial auto no-fault coverage. There are individuals who come into the system with worker's compensation, but many cases come with only limited commercial health insurance. As they deplete their benefit, how can they access Medicaid or Medicare? Will managed care provide a vehicle by which there be greater continutiy of coverage from one health plan to another?

A: The majority of individuals will have some health care coverage. Of those who have no coverage at the time of their injuries, many will eventually become Medicaid eligible because of low income or because they have exhausted their financial resources that would otherwise render them ineligible for Medicaid. Regardless, of the source or type of health care coverage, managed care will be the dominant arrangement.

Having a health plan is only half the battle. The other half is whether the health plan will pay for rehabilitation services. Many health plans nominally include rehabilitation benefits in one form or another. The problem in managed care arrangements is obtaining access to the benefit vis-a-vis a physician gatekeeper or case manager. Moreover, there is a real issue as to whether a person will be able to obtain services in a setting most appropriate to his or her needs. Here is where individual and family advocacy becomes so important. The issue then, is a three-fold: First, does the person have a health plan? Second, does the health plan really cover the range of rehabilitation services needed? And, third, will the case manager authorize the services? In other words, having health insurance means little unless the health plan is prepared to pay for the services needed.

I believe that significant discontinuities between private-sector and public-sector coverage will remain for the foreseeable future. This is especially the case now, as mentioned earlier, for individuals who become eligible for Medicaid following a means test that requires an individual to deplete their resources, In other words, they must first impoverish themselves. There is also a continuity problem for working-age people who apply for Medicare. Applicants face a 24-month waiting period after first becoming eligible for disability income benefits under the Social Security Disability Insurance program for which there is already a 5-month waiting period--29 months in all, not to mention the several months it initially takes to apply for DI benefits.

Within, the Medicaid program, however, there are many changes underway at the state level that will help diminish, but not necessarily eliminate, some of the current discontinuities. State Medicaid programs are becoming less categorically oriented. In the past, you had to be an AFDC [Aid to Families with Dependent Children] recipient or an SSI [Social Security Income] recipient, or be "categorically related" to such recipients except for income, in order to qualify for Medicaid benefits. Today, many states have applied for, and received, federal "waivers" that enable them to provide Medicaid coverage for a broader segment of the population. Some of the discontinuities or disruptions will not be as severe or as long lasting as they once were. During the health care reform debate in the 103rd Congress there was some discussion of making the Medicaid program also function as a "wrap-around" program for private sector health plans. The problem in implementing the concept was that it would encourage private plans to shift their costs to the public sector and such a plan would require a policing or gate-keeping function between private and public health plans.

Managed care by itself will not solve the discontinuities from one health plan to another, from the private sector to the public sector. The health care reform debate and the managed care revolution has spurred us as a nation to think more creatively about how these discontinuities can be addressed. These changes have forced us to "think outside the box" and cast away self-limiting assumptions. To illustrate, the six New England states are now banding together to apply for a federal waiver that would enable each state to pool both Medicare and Medicaid funds and coordinate benefits, perhaps under a managed care umbrella, for those who receive both Medicare and Medicaid benefits by virtue of their dual eligibility for both DI and SSI benefits. Such an arrangement may help to dissolve some of the discontinuities between acute and long-term care.


Q: In some of your writings you underscore another important discontinuity, namely, the discontinuity in meeting the ongoing health care needs of people with disabilities once the rehabilitation phase of their care is completed. Many people with disabilities in managed care plans believe that most primary care physician gatekeepers do not fully understand their constellation of ongoing health care needs and find that they are blocked from obtaining the services they need from specialists. What can providers and consumers do to alter this state of affairs? Should they demand that a specific kind of gatekeeper be used for people with significant impairments?

A: Medical rehabilitation providers have been slow in addressing this important issue. Many rehabilitation providers thought it was enough simply to refer the patient back to his or her primary care provider if he or she had one. For years, people with disabilities have been telling the rehabilitation community that their needs were not being met by primary care providers who did not understand their needs were not being met by primary care providers who did not understand their needs and who often had offices and examine tables that were not fully accessible. In many instances, former rehabilitation consumers rely on their rehabilitation physician when they doubt the medical advice and care they receive from traditional primary care providers. This problem dates back before the days of managed care but the problem has come to a head in managed care because most managed care physician gatekeepers are primary care physicians who have little training or knowledge about the health care needs of people with significant disabilities.

I do not want to mis lead you. Organized rehabilitation medicine has not been totally asleep on the issue of primary care. Several meetings and conferences have addressed this issue. One noteworthy meeting was the April 1995 conference cosponsored by the Rehabilitation Institute of Michigan and the NRH Research Center on the role of organized rehabilitation medicine in primary care.

Quite candidly, most primary care physicians would prefer not having too many people with disabilities in their practice. We learned this several years ago, when we attempted to develop a network of primary care physicians as part of Robert Wood Johnson Foundation project on disability and managed care. People with catastrophic injuries are viewed as a loosing financial proposition for most primary care providers. People with disabilities require much longer-than-average office visits and they consume more downstream health services which count against the primary care gatekeeper's utilization score card that is carefully monitored by the managed care plan.

Thus, in a capitated managed-care environment, payers have few incentives to attract, and providers such as primary care providers have few incentives to serve, people with disabilities. Once people with disabilities are in a health plan, it is to the advantage of the plan to more effectively manage their ongoing health care. This state of affairs provides an opening for rehabilitation providers to negotiate capitated carve-outs with managed care plans in keeping with the kinds of services people with disabilities need and actually want.

Rehabilitation providers often understand the ongoing health care needs of people they serve far better than most primary care providers. Rehabilitation providers need to think about how they can become an upstream primary care provider in a managed care environment for people with disabilities. Dr. Bruce Gans of the Rehabilitation Institute of Michigan framed it well he suggested that rehabilitation providers need to ask themselves the following question: "Are we in the business of rehabilitation or are we in the business of health care for people with disabilities?" The answer to the latter opens up many new possibilities.

The concept of carve-outs for selected groups of people with disabilities is not a new. Community Medical Associates (CMA) in Boston, for example, has a successful capitated health plan with Massachusetts Medicaid for a group of working-age people who require personal assistance services. This is akin to the "disease-management" programs that are emerging across the land. These are programs in which providers carve out populations within health plans in order to better meet the health care needs of the plan's subscribers and thus also avert the downstream expenditures that would otherwise compromise the bottom of line of managed-care organizations.


Q: Capitation involves shared risks in which rehabilitation providers assume more risk. Providers will realize adequate profits if they assess accurately the resources that will be used over time to reach a specified outcome. Are you saying that if providers are willing to become risk-taking or risk-bearing entities that they will be prone to render more efficient care that will become the standard of future care?

A: The answer is yes--if certain conditions are met--but the reasons differ somewhat depending on the phase of care one is speaking about, whether it be the rehabilitation phase or the post-rehabilitation phase of care.

For a provider to be a risk-bearing entity during the rehabilitation phase, it must have reasonably accurate information about the probable costs associated in attaining a particular outcome for a patient with a particular clinical and psycho-social profile. This requires the provider to invest heavily in information systems that can provide the cost and outcome information needed to price its services with reasonable confidence. It also means that each provider has to accumulate enough experience over time to develop the confidence intervals needed to measure its risk exposure. As competition intensifies, each provider will have to determine how it can achieve the predetermined objectives in the most efficient manner. Over time and through experience, new standards of care will emerge as providers are incentivized to achieve quality outcomes at a price.

At the risk of some digression, I believe that efficient markets driven by price and quality concerns, also have significant implications for the role of research and the development of practice guidelines in establishing standards of care. In short, if markets work efficiently, what then should be the role of research and the development of practice guidelines? I believe their roles will change. Practice guidelines are anchored in "scientific evidence" and supplemented with consensus expert clinical opinion. The gold standard for scientific evidence is the randomized clinical trial (RCT). RCTs have a number of inherent limitations. RCTs usually investigate a limited number of interventions or combination of interventions. The ability to generalize study findings is sometimes severely limited by the criteria used to the select the study sample. RCTs are an enormously expensive and inefficient way to arrive at a scientific basis for clinical practice.

I believe that, if markets are structured appropriately with the right incentives, providers are smart. Very smart. One only has to observe how providers are able to game any payment system to their advantage. Establish fair rules based on costs and outcomes, and providers will figure it out. In other words, an efficient market system based on sound rules and sound information, is tantamount to thousands of scientific experiments as each provider seeks to maximize outcomes and minimize costs. Yes, RCTs will still be needed to answer certain questions, but I believe that sound price-and-quality competition will bring us more quickly to a better standard of rehabilitative care than will a thousand RCTs. RCTs and much of clinical research is needed because we do not have efficient markets to ferret out inefficient and nonbeneficial care. This is where health services research comes in. Health services research can help clarify whether markets are sufficiently efficient and can evaluate how provider and patient inputs relate to predetermined outcomes.

In the area of brain injury rehabilitation, Paradigm Health Corporation, though not a provider, is an example of an entity that uses clinical and outcome data to negotiate prices and to determine its risk exposure. Paradigm is an organization that serves as a broker between payers and rehabilitation providers. Because it has accumulated a substantial data base, it has the historical data with which to determine the probable costs and outcomes that should be expected in providing rehabilitation services to a patient with a particular clinical profile.

Another variant on the Paradigm model is a market concept developed by Robert Magnuson, MD who suggests that health plans purchase rehabilitation services through a bidding process that would work like this: when a subscriber incurs a major disabling impairment, the health plan would issue an RFP [request for proposal] by fax or e-mail to qualified rehabilitation providers. The RFP would describe the clinical and psycho-social profile of the patient and outline the desired therapeutic objectives and outcomes. Each eligible provider would be asked to fax back, within 24-48 hours a proposal and a fixed price. The rehabilitation provider may also want to send a nurse or, in the case of brain injury, a neuropsychologist to examine the patient and medical record more closely before sending in its bid. To make informed bids, the rehabilitation provider would have to draw heavily on previous outcome and cost data. This approach would be particularly attractive in health markets where integrated service systems do not include rehabilitation providers and where payers, such as auto insurers and workers' compensation do not have corresponding service networks in the area in which the patient lives.

For a provider to be a risk-bearing entity for ongoing health care services during the post-rehabilitation phase, it also must have information about the probable costs associated in providing health services during a given enrollment period. If the enrollee's health plan is incentivized to retain subscribers from one enrollment period to another--by grading health plan quality in part on disenrollment rates, then the health plan and health provider will also be incentivized to avert longer-term downstream costs by providing the necessary up-front preventive services. The Community Medical Alliance of Boston, I mentioned earlier, determined that clinical depression and pressure sores were two sentinel conditions, that if managed proactively, would save them considerable costs both in the short-term (current enrollment period) and in the long-term (beyond the current enrollment period). These kinds of experiences will eventually help to establish new standards of care for ongoing health care needs of people with disabilities during the post-rehabilitation phase of care.

In establishing capitation rates, providers can examine the claims history files of their target population. Some of these data are proprietary but there are a number of public-use files, stripped of personal identifiers, at the federal and state levels for Medicare and Medicaid respectively. Providers willing to go at risk can use these data as benchmarks by which to capitate their services and offer payers a price that beat these benchmarks.


Q: Let's go back to the rehabilitation phase of care. You have spoken about the need for a system that competes on price and quality where quality is defined in large part by health and functional outcomes. What is the role of outcome studies today and what do you see as the role of outcome studies in the future?

A: Good question. The best way to answer this question is to go back to my thesis that the American health care system of the past was a provider-driven one that competed on prestige and risk; that the system of the present is a payer-driven one that competes on price and risk; and that the system of the future will be a consumer-driven one that will compete on price and quality. The role of outcome studies is different is each of these three systems.

In the provider-driven system of the past that competed on prestige, the role of outcomes research was to help establish the academic and scientific legitimacy of a field, a specialty, a profession, or a particular intervention. The ultimate and intended audiences were not payers or consumers but mainly one's professional peers, particularly those in related disciplines. Outcomes research was, and to some extent, remains, an important weapon in prestige competition. Medical rehabilitation's desire to obtain a foothold in the National Institutes of Health is one example of how a profession or discipline has sought legitimacy among its professional peers. I do not mean to be cynical at all but simply wish to illustrate how prestige competition was fundamental to the business of research.

In the payer-driven system of the present that competes on price, the role of outcomes research is cost minimization, i.e., to help establish the minimum that payers should be required to pay or cover in their benefit packages. In other words, health plans seek to cover and pay only those services for which there is a proven benefit or outcome. Payers are confronted with many claims about efficacy but are seeking more explicit evidence for these claims.

Outcome research is a payer-driven system is also promoted by providers who see outcome studies as a defense against the unrelenting drive to cost minimization.

In the consumer-driven system of the future will compete on quality as well as price, the role of outcomes research is to help consumers and large-group purchasers to make informed choices about health plans and health providers based on risk-adjusted comparisons of outcomes and other quality indicators. In the consumer-driven system of the future, outcomes research will become much more institutionalized; it will become part of the infrastructure of our entire health care system. It will become an integral part of how we do business. We will still be doing ad-hoc studies in response to specific information needs, but outcomes research will become much more ubiquitous. Because health-plan and provider outcomes will be so important competitively, there will also be powerful incentives to game the outcomes research process. I envision an auditing subindustry to emerge that will audit the integrity of outcomes research data analogous to the way in which public accounting firms audit financial statements.


Q: You mention that, in today's payer-driven system, health plans want to cover and pay only those services for which there is adequate evidence of benefit or outcome. Could you explain or illustrate what you mean by this?

A: Health plans are constantly bombarded with coverage and payment demands for services that sometimes appear to be of marginal benefit. In a payer-driven system where cost-minimization or price is central to the competitive process, health plans do not know how to triage many of the demands for coverage or claims for payments.

To illustrate, the NRH Research Center faced this issue recently when it completed a year-long study on the effectiveness of medical rehabilitation services for CHAMPUS [Civilian Health and Medical Program of the Uniform Services]. One purpose of the review was to determine which medical rehabilitation services might be added or deleted from the CHAMPUS benefit package. CHAMPUS requested that the NRH Research Center, under a subcontract to another firm, review the medical rehabilitation literature for each of 13 major impairment groups represented in medical rehabilitation including traumatic brain injury. To facilitate this process we commissioned a panel of rehabilitation physicians, each of whom prepared a paper that reviewed the best available literature in their respective impairment area of expertise. Project methodologists rated the scientific rigor of this literature and an allied health panel evaluated whether each paper was sufficiently responsive to allied health issues.

We learned that there was more literature than we had anticipated but very little of this literature attained the level of scientific rigor eventually sought by CHAMPUS. Nathan Cope, MD prepared an outstanding review of the brain injury literature and your readers will want to know that this literature is among the stronger literatures in medical rehabilitation.

We also learned that the literature is not organized to answer the questions that CHAMPUS, and other payers ask on a daily basis. CHAMPUS, it turned out, wanted to know how each individual rehabilitation service contributed to outcomes. For example, CHAMPUS wanted to know how many hours or visits of PT or OT should be covered and what would be an appropriate length of stay in a rehabilitation center for a person with a particular impairment. The medical rehabilitation literature is not organized at the therapy level and the allied health literature is quite weak. Moreover, in daily practice, the configuration of individual therapies are customized to the needs of each individual patient in keeping with the nature of the impairment, medical history, functional status, psycho-social profile, lifestyle needs, and other individual and family circumstances. Such individualization makes generalization about units of therapy very difficult.

A significant portion of the medical rehabilitation outcomes literature is organized around systems of care as exemplified by the model systems such as the brain injury model systems program. Dr. Cope said it best when he, in his paper, argued that TBI rehabilitation cannot always be reduced to a single 'silver bullet' and that TBI rehabilitation is "multifactorial with many poorly defined elements delivered with variable intensity and expertise over differing time spans." He argued that in addressing questions about the overall efficacy of TBI rehabilitation, it often become necessary "to consider the TBI rehabilitation process to essentially comprise a 'black box' consisting of various permutations of all these treatments." Health plans such as CHAMPUS want to know what is in the black box and how much of the black box they should pay for.


Q: Are payers asking the wrong question?

A: In some ways they are. Payers are mainly concerned about outcomes in helping them determine whether a service should be included in their benefit package. In everyday practice, however, their quest for cost minimization causes payers to focus mainly on inputs and the cost of those inputs. They are input, not outcome conscious. They are looking at the wrong side of the input/output equation. I believe that too many health plans are still encumbered by the baggage of the fee-for-service, provider-driven system that focuses on a separate payment for each input. In today's managed-care, payer-driven system, this focus has led to tremendous micromanagement by health plans of health care providers including rehabilitation providers.

I believe we should let providers worry about inputs and let payers worry about outcomes. I believe that in the consumer-driven system of the future, when there is effective quality competition, payers will pay for outcomes and will let providers worry how to configure the Dr. Cope's black box to maximize outcomes. This gets back to my earlier comment that, if markets are structured appropriately with the right incentives, providers will figure out how best to provide their services both effectively and efficiently.


Q: The team concept has been important in both brain injury rehabilitation and medical rehabilitation generally. How has managed care affected the team concept and what do you see as the future for the rehabilitation team?

A: The concept of the rehabilitation team has been sacrosanct in medical rehabilitation. It embodies several important patient-care and professional values and gives expression to the notion of "interdisciplinary rehabilitation." Theoretically, it is the team's task to define the contents of Dr. Cope's black box.

With managed care, the team concept has been under attack because it is seen as a very expensive way to organize services in the face of declining reimbursement in a managed care environment. Moreover, managed care's review of each therapy or service to be rendered, has sometimes induced competition within teams as to whose skills are most needed and which personnel will be given the dollars to provide services. In short, the very collaborative nature of the team is in many ways threatened. Many providers have significantly altered their approach to teams or have abandoned the team concept altogether.

I believe that predictions about the team's demise is premature. In the current payer-driven, managed-care environment, it may be disappearing but I believe it will make a comeback, albeit not necessarily in its previous form. In a more consumer-driven system where price and quality are paramount, I believe that providers will need to assemble teams to help determine the best configuration of services the individual patient may need in order to attain a predetermined set of outcomes. Each patient, not each professional service area, will be a cost center and it will be up to the team to figure out how to maximize the outcomes in keeping with the funds available. In the future, teams may even be incentivized accordingly. If they are, you will also see some blurring of the boundaries between professional disciplines in medical rehabilitation as team members put aside professional prerogatives in pursuit of patient goals.


Q: You have indicated that we are moving toward a more consumer-driven health care system that will compete on price and quality including health and functional outcomes. What evidence do we have currently that would suggest that such a system will emerge?

A: The linchpin of a well-functioning market is a consumer who can make informed choices about price and quality. Up until recently, consumers had little information upon which to make informed choices about health plans (presuming they has a choice) or health providers. Basic data about the performance of health plans and providers have generally not been available to the public. By contrast, anyone contemplating the purchase of an automobile, for example, can always turn to Consumer Reports to obtain data about a model's past performance. I realize that some people do not like to see health care reduced to a commodity but, if we want a market-based health care system, then we do need to think about health care as a commodity--as well as any other attribute we may want to give it.

Many of us have seen consumer satisfaction surveys of health plans but they really do not tell us much. Many of these surveys are self-anointed seals of approval. The differences between health plans are marginal and most satisfaction surveys typically do not report the experiences of those who had significant health care needs and significant encounters with the health care system during the previous year.

More encouraging, I believe is the health care report card movement that is gaining momentum across the country. Health care report cards rate health plans and health providers based on health outcomes as well as consumer satisfaction surveys.

At the forefront of the health care report card movement has been the fast-growing National Committee on Quality Assurance (NCQA) in Washington, DC and more recently, the Foundation for Accountability in Portland, Oregon. NCQA is the accrediting body for managed care plans much the same way that JCAHO is the accrediting body for health providers such as hospitals. In early 1997, NCQA will be releasing its third version of HEDIS (Health Plan Employer Data and Information Set) which provides for a standard set of quality indicators for health plans. If you want to find information on any of the 200 health plans that NCQA has rated, you can locate it on the Internet at Many large employers demand that health plans be accredited by NCQA before they make the health plan available to its employees.

Another important development is the publication of Health Pages, a consumer health magazine similar to Consumer Reports, which rates health plans and health providers in several large markets around the nation--Atlanta, Boston, Columbus-Cincinnati, Pittsburgh, St. Louis, Phoenix, Denver, South Florida, Los Angeles, and more to come.

One can identify many other examples of a stronger consumer-based, outcomes-oriented focus in health care: Consider the Cleveland Health Quality Choice Program which provides severity-adjusted outcomes and patient satisfaction data for 29 Cleveland-area hospitals. Consider the North Central Texas HEDIS Coalition which has developed a report card on seven HMOs on HEDIS performance measures and member satisfaction data from independent surveys. Consider how NCQA and Health Pages have combined forces in Denver to develop an HMO report card that compares the HEDIS performance results of several Denver-area health plans such as Cigna, FHP International, Kaiser, MetraHealth, Pru and Sloan Lake. Consider the Pittsburgh Business Group on Health which has spearheaded a similar cross-HMO comparison involving HealthAmerica HMO, Keystone Health Plan West, and US Healthcare.

This is only a sampling. The leading edge in the development of a more consumer-driven health care system is the large employer who is demanding that health plans, particularly managed care plans, provide standardized outcome and consumer satisfaction data. Large employers believe that they have the health care cost spiral under some degree of control and are now turning their attention to quality issues and want to know what value they are getting for their money. Small employers are still concerned mainly about price. Large employers have clout with managed care companies and have market power akin to a purchasing cooperative or a health alliance. Consider for example, the National HMO Purchasing Coalition which includes 10 employers such as Sears. All HMOs must meet the Coalition's quality specifications if the plan is to be offered to Sears' employees.

In many ways the information needs of large purchasers are similar to those of individual consumers and the information being sought by large employers are being made digestible to ordinary consumers as in the Denver market where NCQA, by working with Health Pages, is making its findings available to the average consumer.

I believe that we are entering a new era of health care accountability and that rehabilitation providers better figure out quickly how their performance data can be made digestible to the consuming public as well as to their traditional referral sources. I have many thoughts on this and only wish that we had more time to explore what should be the industry's response to this growing movement.


Q: You seem quite convinced that will eventually evolve into a more consumer-driven system. What do you see as the main threat to the emergence of such as system?

A: If there is a threat, I believe it may come from potentially excessive consolidation in many health care markets. A consumer-driven system presumes that there will be a choice of health plans and provider networks. I do not want to dwell on this but a day does not go by when one does not hear of another merger or acquisition in health care. The urge to merge is also very great in rehabilitation. Some degree of consolidation is both necessary and inevitable as excess capacity is wrung out of the system. Earlier in this interview, I indicated that an advanced managed-care market like Minneapolis-St. Paul has already consolidated into three main provider networks and some observers are now asking whether consolidation in the Twin Cities has gone too far. Excessive consolidation is a potential threat to both competition and choice.


Q: What is the role of government in developing a more consumer-driven system? Will markets self-correct?

A: The consumer-driven system of the future will not get there by itself but I do believe that there is sufficient momentum in the system to get us there.

Government has a very vital role. Government, particularly at the federal and state levels, has an important role in making sure that the conditions for a sustainable consumer-driven, risk-neutral, market-based health-care system are in place. There is no such thing as a free lunch and there is no such thing as a free market. Markets are like sports. There have to be rules, boundary lines, referees, and the power to sanction those who violate the rules in order assure fair play and a level-playing field. The problem with health care, compared to most other kinds of market, is that it more susceptible to manipulation because players will try to win by competing on risk rather than price and quality.

One important role of government is to reduce risk competition and to promote price-and-quality competition. This means that government may have to sponsor research in developing risk adjusters that can adjust prices and outcomes on the basis of case-mix; sponsor carve-outs for certain "high-risk" populations; and establish guidelines as to how health plans market their services in order to minimize risk selection. One of the most important steps for government, in the short run, is to make sure that Medicare and Medicaid, as they convert to managed care, take on the characteristics of a more consumer-driven, risk-neutral system and that they do not fall prey to the risk competition that has plagued American health care.

Finally, government also has an important role in monitoring consolidation in the health care system and to prevent excessive consolidation that undermines effective consumer-based competition. At present, I very much doubt that government has adequate resources in the Department of Justice's Anti-trust Division or in the Federal Trade Commission to monitor the current flurry of mergers and acquisitions, not only in health care, but also in other industries such as the telecommunications and the banking and financial services industries.


Q: Let's shift the discussion abound another issue important to people with brain injuries. What about long-term supports for people with brain injury? It seems that we still a long away from having a continuum of services available to an individual with a brain injury over many year's of individual's remaining life?

A: This is a frustrating question especially for observers such as myself who believe that there has to be a good answer lurking somewhere. The integration of acute and long-term services has probably been the most vexing issue in American health and social policy. There have been many interesting proposals, demonstration projects, and population-specific programs. The list is long. None, however, seem to form the basis for a more unified social policy response that can take into account the diversity of individual needs and financial circumstances and can create the societal consensus that will sustain such a social policy politically. Our society's willingness to develop a sound long-term services policy is limited by the perception of many people that their individual or family risk for needing long-term services, apart from nursing home care in old age, is fairly minimal and distant. Most people, especially younger people, see such needs as remote and prefer not having to deal with it. As a result they do not plan for it privately nor do they support it politically.

My first inclination is to think about how sound market-based solutions can be forged but I frequently run into one or more limitations that undermine market solutions. I believe that we can bring more market-based solutions to some government-sponsored programs that will serve the interests of both consumers and public accountability. As many of your readers know, I have been a proponent of publicly consumer-directed long-term services but I believe that current approaches have not dealt adequately with limitations on both the demand and supply sides of the market that require some level of government sponsorship to rectify. I believe that long-term services will always require some combination of public and private sponsorship in order to create effective markets and to make the costs palatable to the general public and affordable to the individual or family.


Q: Overall though, you paint a fairly bright view for the future, do you not?

A: I am optimist. There is much doom and gloom among both consumers and providers about managed care. Much of it is understandable but we do need to look to the future. While we are mired in the travails of the current system, I see a new system emerging one that will be in the interests of both consumers and providers. But, as I said before, the new system, while inevitable, will not come by itself. If the new system is to be responsive to the needs of TBI consumers and providers, the TBI community needs to organize itself and become a player in the emerging consumer-driven health care system of the future. The TBI community needs to make sure that the quality indicators that drive the new system address those issues that speak to the needs of TBI consumers. It will take the goodwill of many people and will require the participation of government to help create the level-playing field about which I spoke.

The shift from a payer-driven system that competes on a price and risk to the consumer-driven one that competes on price and quality is an exciting one. Quality competition is where the interests of both consumers and providers converge.

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