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Among managed care organizations, Kaiser HMO model is the best, UC Berkeley researcher finds
20 Dec 2000

By Catherine Zandonella, Media Relations

Berkeley - Not all managed care plans are created equal, according to a consumer study conducted by researchers at the University of California, Berkeley. The study finds the managed care model where patients experience the fewest problems getting care is the all-inclusive HMO plan typified in California by Kaiser Permanente.

UC Berkeley professor Helen Halpin Schauffler and her colleagues at the UC Berkeley School of Public Health surveyed 1,201 randomly selected, insured adults about the difficulties they'd encountered with managed care organizations over the past year.

The researchers found that 42 percent of those surveyed reported one or more problems with their managed care organization, ranging from billing errors to limited access to specialists to denial of treatment. The results will be published in the January issue of the journal Medical Care.

Of the three types of managed care surveyed, the staff/group model, in which the doctors exclusively see patients from one HMO, received the fewest consumer complaints. Kaiser Permanente is the largest such plan in California. Other staff/group HMOs include the Group Health Cooperative of Puget Sound in Washington and the former Harvard Community Health Plan in Massachusetts. Student health centers at universities often operate on a similar model.

People belonging to staff/group HMOs reported fewer problems with billing and claims, better coverage of important benefits, and fewer misunderstandings of coverage as compared to the other two types of managed care organizations. The results are consistent with the one-stop-shopping structure of the staff/group HMO structure, Schauffler said. The fact that Kaiser patients reported less confusion about their benefits, she said, may be due to the longer time Kaiser patients stay with their plan.

In contrast, two other types of managed care organizations faired worse than the Kaiser model.

The preferred provider organization (PPO), an association of doctors who have contracted with an insurance company to provide services at a discounted fee, ranked second in overall consumer problems, the study found. However, the problems were more often administrative in nature rather than about having access to care. While PPOs allow patients to choose their own physicians and do not require referrals to specialists, the plans can be more expensive and cover fewer services. The study found that patients reported fewer delays in getting needed care, fewer difficulties getting the most appropriate care and fewer cases of being forced to change doctors in PPOs. However, PPO patients reported greater numbers of problems in billing and in understanding their benefits. Examples of PPOs include those for Blue Cross of California and Blue Shield of California.

"When what you want is choice and access, the PPO is best option, if you can afford it," said Schauffler.

In third place was the independent provider association (IPA) or network HMO. The IPA/network HMOs usually require a primary care physician to act as a gatekeeper of medical care. Unlike the staff/group HMO, physicians in IPA/network HMOs usually contract with many different plans. Most people in the United States who are in HMOs are in an IPA/network model. Examples of this type include HealthNet, PacifiCare, Blue Shield of California and Blue Cross' CaliforniaCare.

The most common complaints were difficulties in getting referrals for specialists and difficulty in selecting a doctor or hospital. IPA/network HMO members also reported a higher rate of being forced to switch doctors. "The process of getting a referral from the primary care physician can be so cumbersome that care is often delayed," said Schauffler, "which can have a significant effect on patient health."

Overall, 34 percent of patients reported problems with the Kaiser-type HMO, versus 43 percent for the PPO and 46 percent for the IPA/Network HMO.

The three plans were similar in the rates at which consumers reported being denied care or treatment, being forced to change medications or experiencing language and communication barriers.

While the study was conducted in California, Schauffler said the results may apply nationwide to the ongoing debate in the U.S. Congress over managed care reform. While California leads the nation with 92 percent of its insured, non-elderly population enrolled in managed care organizations, there is a nationwide trend towards increased managed care.

Schauffler's results already have been used to influence legislative decisions in California. The California Legislature enacted laws over the last two years requiring HMOs to provide continuity of care for patients whose physicians were dropped from the plan and standing referrals to specialists for persons with chronic conditions. Another provision holds health plans or their medical directors liable for harm resulting from their decisions. Many of these laws have only recently taken effect. "We are eager to follow up and see if these regulatory changes have an impact on consumers' experiences in managed care," said Schauffler.

Funding for this research was provided by the California HealthCare Foundation, the California Managed Health Care Improvement Task Force, and The California Wellness Foundation.