HMOs still using gatekeeper modelPosted On: Dec. 10, 2000 12:00 AM CST
When United Healthcare Corp. decided in 1994 to give its members direct access to specialists, removing gatekeepers from the process, health care experts thought other health maintenance organizations would follow suit.
Although a handful did, most did not.
Many HMOs, such as Thousand Oaks, Calif.-based WellPoint Health Networks Inc., instead began steering members who wanted direct access to specialists to their preferred provider organization products. A few others, such as PacifiCare Health Systems Inc. of Santa Ana, Calif., developed expedited referral programs, in which members with chronic health conditions could obtain regular referrals to specialists without needing to visit their primary care physicians each time.
But although most HMOs still require gatekeeper referrals, they are not strictly enforcing this requirement, partly in response to the backlash against managed care that has gripped the country, as well as to legislation that has opened the gates at least partially in some states.
And, eventually, all managed care organizations will likely give their members the choice between gatekeeper and non-gatekeeper HMOs, industry experts predict.
Minneapolis-based UnitedHealthcare became the first health maintenance organization in the nation to open the gates when, in 1994, it decided to allow its members to refer themselves directly to specialists without first obtaining referrals from their primary care physicians. Today, about 90% of company's enrollees are in such so-called "open access" plans.
Soon after UnitedHealthcare's announcement, several other HMOs-particularly Blue Cross & Blue Shield of Massachusetts, Blue Shield of California and Oxford Health Plans Inc.-said they, too, would give their members direct access.
But so far, few other HMOs have jumped onto the open-access bandwagon.
In fact, according to statistics compiled by the Washington-based Center for Studying Health System Change, 51% of Americans were enrolled in health plans with gatekeepers in 1999, up from 44% in 1997. Year 2000 figures have not yet been published.
For the most part, "HMOs are maintaining the gatekeeper approach," said Barry Barnett, a principal at PricewaterhouseCoopers in Teaneck, N.J.
Although "it's got great market appeal...managed care organizations (in general) have adopted a wait-and-see approach to seeing how the United Healthcare model works" before they decide to open the gates themselves, said Barry Rosenfeld, a consultant at Apex Management Group in Princeton, N.J.
In particular, many HMOs are concerned that allowing members to refer themselves to specialists will lead to higher health care costs, Mr. Rosenfeld explained.
But that fear is proving to be unfounded, industry observers agree.
"It's hard to tell," Mr. Barnett said, as to whether gatekeeper models have lower costs. "The school of thought is that fat's been cut from the health care system, so we're not getting utilization savings from gatekeepers. So, eliminating them is not costing much."
In many cases, any additional costs anticipated by the health plans have been offset by savings in the cost of administering the referral process, said Apex's Mr. Rosenfeld.
Depending on the health plan, "the administration of the referral systems varies from highly automated and almost transparent to a very cumbersome and paper-oriented process," he said.
"The discounts that were given for gatekeeper models were theoretical," said Kenneth Sperling, health care practice leader at Hewitt Associates L.L.C. in Norwalk, Conn.
"You save money if the PCP is really performing the gatekeeper function and screening out the heartburns from the heart attacks," he said. "But 90% of people who want referrals get one. So all it did was add costs to the system."
Indeed, Blue Shield of California found that the 1% additional premium it would charge members who wanted direct access to specialists adequately covered any added costs, according to Ken Wood, chief operating officer of the San Francisco-based HMO.
But Mr. Wood acknowledged that may be partly because members who decide to self-refer must pay a $30 per office-visit copayment, compared with the $10 or $15 copayment usually charged for visits to primary care physicians and specialists.
Despite the hesitation by many HMOs to eliminate gatekeepers, "there's definitely a trend toward a less-restrictive form of managed care," said Mr. Sperling of Hewitt.
While most HMOs still require members to choose gatekeeper primary care physicians at enrollment, the gatekeeper function is not really being enforced, said Helen Darling, senior consultant of group benefits and health care at Watson Wyatt Worldwide in Stamford, Conn.
"For the most part, the HMO plans, with or without a gatekeeper, operate roughly the same," she said. "They don't really `manage,' in spite of all the managed care backlash."
While HMOs may still require members to obtain referrals from primary care physicians in order to see specialists, that requirement is simply a formality, she said.
Statistics show that anywhere from 98% to 100% of referral requests by HMO members are granted, Ms. Darling said.
Still, "it's a psychological deterrent," and the wish to eliminate that deterrent will eventually prompt all managed care plans to follow United Healthcare's lead, Ms. Darling predicted.
And if HMOs don't change their ways, the enrollment will shift toward less-restrictive health plans, she said.
"Closed-model HMOs are losing market share," she said. "We've seen more people choose an open-access model at enrollment-21% last year, up from 17% in 1998-and PPO enrollment has surged."
"We have seen substantial growth in our PPO product," acknowledged Alan Rosenberg, vp-marketing at Blue Cross & Blue Shield of Massachusetts in Boston.
And the growth has occurred despite the plan's announcement last summer that it was launching Access Blue, a new option in which HMO enrollees could seek care directly from specialists.
BCBSMA's PPO enrollment surged to 415,363 in October 2000 from 248,652 in October 1999, Mr. Rosenberg said. Over that period, the plan's HMO enrollment fell to 817,599 in October 2000 from 870,652.
And while it was hoped that Access Blue would attract about 15,000 enrollees during its first year, it attracted just "a couple of hundred," he said.
This outcome is ironic, he said, given that Access Blue's premiums, though 3% higher than those for its traditional gatekeeper HMO, are considerably lower than those for the PPO. PPO premiums are about 10% higher than those for BCBSMA's traditional HMO.
"It's market dynamics," he said, suggesting that the current booming economy may be driving more people to select plans with greater choice, despite their higher cost.
And Access Blue got off to a rough start because of some difficulties in negotiating compensation with providers, "so we did not actively market it," he explained.
On the other side of the country, however, Blue Shield of California has had monumental success with its open-access product, which now has 1 million members, compared with just 300,000 when it was launched in 1997, according to Mr. Wood.
BCBSMA plans to relaunch Access Blue in the next six to nine months, according to Mr. Rosenberg, who said he believes that, ultimately, what people want is a number of plans from which to choose.
"Consumers are not monolithic," he said. "Choice has been the hallmark of the market in Massachusetts. There have been very satisfied people in HMOs. Our goal has been to provide that range of choice and price points and let the consumer make the choice."