Controlling Utilization:
The Next Challenge of Managed Care

BY WILLIAM J. LAPPLE, O.D.
JULY 1996

Learn how to position your practice to provide primary eye care in a managed care environment.

As optometrists position themselves to provide primary eye care in today's managed care environment, they must be willing to accept the responsibility of managing that care. Success will involve incorporating methods that will improve your performance as a clinician while reducing costs.

Insurance carriers are looking to contract on a capitated basis with one provider group. The more progressive contracts will either contain the appropriate mix of optometrists and ophthalmologists to provide total eye care or will position optometrists as gatekeepers to control costly referrals.

The successful networks will be able to negotiate a fair contract and administer that contract by distributing the funds, probably on a fee-for-service basis. Monitoring utilization as well as quality of care will also be important. Under this arrangement, providers will still feel compelled to compete among themselves to market their skills and increase patient volume. If utilization cannot be controlled, it will create a deficit and all providers will be held financially liable. Hence, the risk is incorporated into the contract. Overall success of the provider network is measured by looking at the year-end bottom line and determining if the group is within budget.

TOTAL PATIENT CARE VS. VISION CARE

Quality of care is important because patient satisfaction will enable the provider network to renew yearly contracts and manage more lives. The key to a successful provider group under this type of a managed care arrangement is to network with clinicians who can successfully balance good patient outcomes with an appropriate amount of utilization. The larger and more sophisticated managed healthcare organizations, which deal in total patient care as opposed to vision care, have developed mechanisms to guide the primary care physicians into making sound clinical decisions that will lead to better practice management without affecting quality. These tools are now being transformed into specialty care programs that will guide the specialty providers, like eyecare practitioners.

In the Rochester area, a large IPA-HMO that manages approximately 200,000 lives plans to launch a quality initiative program in 1997. Its goal is to manage costs within the specific eyecare budget, which is part of the larger overall patient care budget.

Through this quality initiative program, the HMO can evaluate a clinician's performance based on certain criteria. It can monitor an equal proportion of patient outcomes and appropriate utilization to balance quality and cost effectiveness.

With this particular HMO, financial rewards are distributed to those clinicians with the best performance evaluation. Only those practitioners who rate in the top percentile are rewarded.

Minimum standards are not sufficient to qualify, but the high achievers are singled out and rewarded. The financial incentives are approximately $2,000 for a successful practitioner.

An HMO or IPA may choose to negatively reinforce by threatening to remove panel providers if they do not perform well. Either way, consequences may be severe for those practitioners who don't succeed.

INCENTIVES IN OPTOMETRY

Let's look at an example of the incentive program that was used for primary care physicians (internists and family practitioners) positioned as the gatekeepers within this HMO. I've changed some of the clinical requirements to reflect an optometric setting and incorporate aspects of a contact lens practice.

Performance indicators are: medical record review, preventive care guidelines, member survey and efficiency. Each category is graded independently and scores are tallied to calculate an overall performance.

Medical Record Review -- Patient charts are reviewed and graded. Nine specific items are identified and points are received for a positive identification. For example:

• A patient's demographic profile must be on file.
• Allergies must be listed and updated.
• Extra reports and lab tests must be included with evidence they have been reviewed by the clinician.
• Medications must be listed and updated.
• The primary care physician must be identified.
• All visits must contain date, reason for visit, objective findings, impression/plan and signature.
• A comprehensive exam and history must be updated every three years.
• Spectacle and contact lens prescriptions must be updated every two years.
• Phone conversations must be recorded and initialed.

Preventive Care Guidelines -- A reviewer will look for implicit information and office mechanisms that have been implemented specifically to address preventive care issues. The provider will receive full or no credit depending on completeness of the information given to the patient. This must be documented in the patient chart as to when and how it was communicated with the patient.

Examples of the preventive care issues and the types of office procedures that can be implemented are:

• All patients must be screened for glaucoma by
  measuring IOP, noting C/D ratios and asking about patient history at least every two years.
• Diabetic patients must be dilated annually (minimum) and examined for retinopathy. This must
  include a binocular view of the fundus.
• Diabetic patients must be informed of the importance of annual dilated fundus exams and given
  literature that explains the necessity for constant close monitoring and control. A recall system must be in place to schedule the yearly visit and there must be a system to track 'no shows.'
• All children must be fit with polycarbonate spectacle lenses.
• There must be documentation that appropriate care instructions are given to all contact lens wearers.
• There must be a policy that no contact lens wearers are instructed to wear contact lenses on an extended wear basis. The risk of extended lens wear must be explained to the patient.

Member Survey -- Our local HMO surveys one hundred patients of each provider, and asks them to rate them excellent, good, fair or poor in various categories. The surveys are then tallied to get an overall grade.

Efficiency Performance Indicators -- Each provider is rated based on utilization of services and referrals to specialists. Utilization patterns are projected depending on the practice profile. For example, a geriatric practice would be expected to have more referrals for cataract surgery than a contact lens practice. If a practitioner were underutilizing services or referring less than the projected amount, he would be rated higher than the practitioner who was over-utilizing or overreferring.

Services reviewed are:

• the number of referrals for cataract surgery in a given period;
• the number of visual fields, fundus photographs or fluorescein angiographies billed for;
• the percentage of neurological referrals per patient base in practice;
• corneal topography billed for or referred out;
• total number of contact lens prescriptions; and
• the rate of specialty contact lenses prescribed.

TOP SCORERS REAP REWARDS

The four categories are designed to quantify a practitioner's performance using a point system. Those practitioners who control utilization and score well are rewarded. They must also rate highly in patient satisfaction. The categories are meant to balance quality and appropriateness of care.

Capitation contracts seem to be the way of the future in providing care. Insurance carriers will be more likely to contract with large provider networks that are able to care for many lives in a large region or geographic area. The ability to stay within the capitated budget will control the providers in the group. The administrator of the network will seek out tools similar to this incentive program to monitor utilization as well as quality of care and member satisfaction.

It's also believed that administrators who own the provider networks as corporations will have the easiest task of controlling utilization as opposed to independent practice associations. IPAs allow more independence and practitioners are not as motivated to abide by restrictions as compared to an employee of a corporation who feels more pressure to do as "the boss" says. Also, a salaried employee has less financial incentive to over-utilize services than an individual practitioner who is managing a business and trying to increase profits. Others may argue that the individual practitioner will rate higher with patient satisfaction.

How optometrists fare as gatekeepers in a total eye care contract will depend on how well they can provide quality care and maintain cost-effectiveness. Traditionally, most optometric contracts have involved a vision care carve-out, which makes projecting utilization easier. One can limit each member to an annual eye exam and one pair of spectacles. In medical eye care, utilization of services is more difficult to project and is often left up to the provider.

Capitated plans present an opportunity for optometry because traditional indemnity models fail to keep costs in line, typically because of overutilization. Recently, health maintenance organizations in my community have recognized that overutilization of services, even in a managed care structure, has driven costs higher and they must restrict services further to maintain lower premiums. Each community will have its own unique features to contend with as networks form and insurance carriers develop plans, but the issues will be similar, especially with capitated arrangements. Controlling utilization and maintaining quality will spell success in this environment. CLS

HMO MEMBER SURVEYS

HMOs routinely ask their members to grade providers. They might be asked:

• How long did it take to get an appointment?
• Was the doctor on time for the appointment?
• How would you rate the appearance of the facility (neatness, cleanliness, ample parking)?
• Was the staff courteous?
• Were you satisfied with the staff and doctor's ability to communicate?
• Were the contact lens care instructions fully explained?
• Were your spectacles ready in an acceptable amount of time?
• Did the doctor meet your expectations?
• Did the doctor take care of your main problem or complaint?

Patients indicated that these questions pertain to the most important aspects of a doctor's appointment. These are often different from what the doctor feels is most important.

ARE YOUR PATIENTS SATISFIED?

Last year Consumer Reports asked its readers how satisfied they were with their doctors. Although the surveys targeted primary health care physicians (specifically, the principal doctor the respondents saw for their most-treated condition), many of the findings are relevant to eyecare providers as well.

Of the 70,000 respondents, 75 percent said they were completely or very satisfied and only 7 percent said they were dissatisfied. Good news, to be sure. In fact, among the most satisfied patients were those being treated for cataracts and glaucoma. Their high degree of satisfaction was attributed to the fact that these conditions pose a serious threat to vision, but they can be treated effectively. The most dissatisfied patients were those with chronic, difficult-to-treat conditions.

However, the surveys also uncovered some potentially serious problems, many of them involving communication and patients' expectations.

Did you know that patients want you to ask their opinion? Twenty-nine percent of those who answered the Consumer Reports surveys, said their doctor didn't ask their opinion about their medical condition. About the same number of respondents said their doctor didn't offer suggestions for lifestyle changes that could improve their health, and 20 percent said the doctor didn't encourage them to ask questions.

An alarming 26 percent said their doctor didn't tell them about the potential side effects of the drugs they prescribed, and 22 percent said the doctor didn't take a thorough medical history.

Of particular concern to contact lens practitioners was the finding that people whose doctors don't communicate well are less likely to follow their instructions.

In a companion survey, 600 Consumer Reports readers were asked how they interact with their doctors. Their responses indicated patients who were more assertive had a more rewarding experience.

Dr. Lapple is in private practice in Leroy, N.Y. He represents optometry on an eyecare task force for a local individual practice association in Rochester. He frequently lectures on managed care and is past president of the Rochester Optometric Society.