Constrained Innovation in Managing Care for High-Risk Seniors in Medicare + Choice Risk Plans. A. Group Model Organizations Had Advantages for Implementing Innovations


The four MCOs we studied represent a mix of managed care models, payment strategies, and marketplaces. Each organization approached the task of delivering care to Medicare beneficiaries differently, building on the unique strengths of their organizations. In particular, the structural characteristics of the four organizations appeared to be very influential in several critical areas that affect the efficiency and effectiveness of care for high- risk seniors. While it is difficult to draw generalizations from our sample of four, the study team was persuaded that several characteristics of the individual plans were significant catalysts in, or sometimes impediments to, the construction of innovative approaches to high-risk seniors. Among the structural factors that differentiated the four sites studied, whether an MCO was organized as a group or IPA model appeared to be the most potent variable in creating an environment conducive to developing and implementing innovative programs for high-risk seniors.

The varied structures of Medicare MCOs and the diverse contractual arrangements of physicians and hospitals led to the creation of different relationships that can foster or hinder initiatives to improve care for high-risk seniors. Specifically, we noted that the group model organizations in our case study (Aspen and Kaiser Colorado) found it easier to develop innovative care methods for high-risk seniors than did the IPA case study organization (Keystone East and HMO Oregon). The noteworthy advantages of the group models included the following:

  • By their nature, the two group models seemed to foster a higher level of interaction among primary care physicians and administrators. This led to a cooperative approach to thinking about care for high-risk seniors, an approach that focused on developing efficient, effective care.

  • The group models tended to attract a mix of physicians who are comfortable within managed care. The group model physicians to whom we spoke seemed more likely to look for ways to exploit the flexibility of capitated care in order to deliver better care. In one case, a physician said that he “felt sorry for his fee-for-service patients” because he had less flexibility in providing covered care to them.

  • The group models delivered primary care through clinics where primary care physicians and care managers could be located together. This co-location seems to promote communication. In comparison to approaches without co-location, the two group models seemed to generate more physician referrals to care management and more subsequent interaction between physicians and care managers. Co-location also facilitated care managers’ efforts to meet face to face with patients.

  • The group models in our study contracted with a small set of nursing homes to deliver subacute care. These nursing homes were selected primarily because of their commitment to quality and to developing better-integrated, long-term relationships with the MCOs. The small skilled nursing home network enabled the group model organizations to monitor their members more closely, using a few physicians and nurse practitioners.

The IPA models also introduced a number of innovations, including care management programs. However, they were hampered by their less direct relations with physicians and other providers. For most physicians, the IPA accounted for a modest fraction of their patients and revenue. Also, the physicians often participate in multiple IPAs and maintain a fee-for-service practice. Thus, it is harder for any specific IPA to engage the physicians in care coordination activities or other programs targeted to high-risk seniors.

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