In addition to the VIP and I-CAN characteristics of high-risk seniors and the MCOs that serve them, it is important to pay attention to the fragmented system of care that shapes the health, functioning, and quality of life of a growing number of high-risk seniors (Gold et al. 1998). Although a Medicare + Choice plan can control delivery of most of the health care its members receive, the plan remains only one element in this system. Most social services and custodial care that high-risk seniors need are delivered either by providers who are independent of a plan’s provider network or by the seniors and their families. Furthermore, accountability for the mix of services high-risk seniors receive is divided among numerous stakeholders who often have differing priorities and authority. Finally, plans’ competition for enrollees, providers, and capital creates incentives and constraints with respect to the strategies they use to improve care for the portion of the market represented by high-risk seniors.
Our view of managed care systems for high-risk seniors in Medicare begins with the elderly beneficiaries and ends with the key outcomes the system is intended to affect: health status, functioning, quality of life, and costs (Figure I.2). Outcomes are shaped generally by people’s lifestyles, attitudes, and physical makeup, as well as by the care they receive. That care is shaped, in turn, by the actions of the managed care plan, which is responsible for delivering or arranging for Medicare-covered medical care. The actions of the plan are shaped by two broad external forces: the Medicare program and market forces. Medicare, which is administered by CMS, contracts with health plans to deliver its benefit package to those beneficiaries who choose to enroll. CMS thereby sets the requirements for and expectations about what a plan must deliver to its members, as well as furnishes established capitation payments. A plan’s actions also are shaped by the characteristics of the markets in which it operates, particularly the level of competition from other insurers, the policies of state regulators and accreditation bodies, the infrastructure of local care, historical practice patterns, and demands by the plan’s shareholders (or, in the case of nonprofit plans, by sponsors).
Care is delivered to high-risk seniors by a fragmented system. Most medical care is covered by Medicare and is delivered by the plan’s provider network. The remaining medical care (such as medications), along with services such as long-term nursing home care, personal assistance, nutrition services, housing, and transportation, are provided by a mix of providers who operate largely outside the Medicare system. Finally, a substantial amount of care is provided by unpaid caregivers, such as family members, friends, and neighbors, and by the high-risk seniors themselves. Although the managed care plan may influence these other sources of care through education and coordination, and may even decide to fund some of these services, it remains contractually obligated only for Medicare-covered care. Because the boundaries between the different types and sources of care are not well defined, there often are alternative sources for specific services. Thus, the care delivered by one group can interact with that delivered by others.
Although the elements in this structure can interact in myriad ways, three relationships are particularly important for our study of Medicare managed care for high-risk seniors: (1) the interrelationship between elderly Medicare beneficiaries and the plan, (2) the contract linking Medicare and the plans, and (3) the fragmented nature of care delivery for high-risk seniors.
|FIGURE I.2. Systems Framework for Managed Care Organizations
When beneficiaries enroll in a managed care plan, they tie receipt of Medicare benefits to a contractual entity (the “Medicare + Choice plan”). The plan is then obligated to provide or arrange for all Medicare benefits, as well as any other benefits it has added to its package. Most Medicare risk plans restrict beneficiary choice to a specific provider network.3 In exchange, plans offer savings to most beneficiaries willing to accept these restrictions. For example, many plans do not have deductibles or charge members a premium, although members still must pay the Medicare Part B premiums. Many plans also offer coverage for prescription drugs or for hearing aids and glasses. During the late 1990s, beneficiaries in these plans often could save $1,000 or more per year in out-of-pocket expenses, compared with the fee-for-service system.4 A key issue facing beneficiaries who consider enrolling in managed care is whether the savings are sufficient compensation for letting the plan restrict their choice of providers.
The relationship between Medicare and a plan centers on the contract, which obligates the plan to provide the Medicare benefit package, along with any additional services the plan has added to its benefit package, to enrolled beneficiaries in return for a specific capitation payment rate. The contract stipulates such features as mandated 24-hour coverage, provider access standards, quality assurance systems, data-reporting requirements, and grievance and appeals mechanisms. The contract enables Medicare to shift the financial risk for delivering Medicare benefits from the government to the plan. It establishes specific expectations about plan performance yet gives the plan considerable flexibility in deciding how to meet them.
To fulfill their contractual responsibilities, plans establish administrative and clinical systems through which they and their associated provider networks deliver care to the enrolled population. Of particular relevance to high-risk seniors, some plans establish care management systems that seek to identify and assess members who are likely to require extensive care, then manage the care delivered to those people. The exact structure of these internal subsystems varies among, and sometimes within, plans. Furthermore, for their Medicare populations, plans may establish structures, such as screening protocols or case management systems, that differ from those for other enrolled populations.
In Medicare managed care, as in Medicare fee-for-service, high-risk seniors draw on a wide array of services that are provided through a fragmented system of overlapping providers and funding sources (Bringewatt 1995; and Weiner and Skaggs 1995). These services include medical care, assistance from both paid and unpaid caregivers, and a variety of long term care and other services that lie outside the Medicare benefit package. High-risk seniors also engage in various self-management activities, including monitoring their physical and emotional status; engaging in health-promotion activities; and adhering to any recommended diet, exercise, medication, and treatment protocols.
Managed care plans have the structure and incentives to coordinate delivery of covered medical care; they also have considerable flexibility in determining the specific mix of providers and kinds of expertise reflected in the plan. Medicare + Care regulations also require that plans take some steps to reduce fragmentation, but the regulations provide only vague guidance about expectations in this area.