UnitedHealthcare Has 14.5 Million Clients

Washington Post

UnitedHealthcare, one of the nation’s largest managed-care companies, said yesterday that it will stop overruling doctors’ decisions about what care patients should receive.

The company, which covers 14.5 million people nationwide and more than 200,000 in the District, Maryland and Virginia, is abandoning a cornerstone of the managed-care industry’s cost-containment strategy and one of the features most responsible for the outpouring of public ill will toward managed care.

United said it is taking the final say out of the hands of the managed-care bureaucracy and returning it to the treating physician because requiring doctors to get prior authorization was costing more money than it saved. Physicians complain that dealing with the industry’s “health police” causes needless hassles and delays.

United’s action, effective today, could put pressure on other managed-care companies to follow its example, industry analysts said.

Some of the strongest critics of managed care, including the American Medical Association (AMA), which represents doctors, said United’s announcement could be an important step.

“If United’s move leads managed-care organizations to stop pressuring doctors to ignore the Hippocratic oath, it will be a blessing,” said A.G. Newmyer III, chairman of the Fair Care Foundation, a patient advocacy group in the Washington area. But Newmyer added a note of skepticism, saying that if United by other means pressures doctors to withhold care, “then patients will get little benefit.”

“I think this is a real sea change for the industry,” said Jamie Court of Consumers for Quality Care, a patient advocacy group in California that has bombarded lawmakers with faxes about HMO “casualties.” The announcement “signals that companies are now having to compete on the basis of quality of care and respond to the patient and physician critique of this industry being too heavy-handed,” Court said.

UnitedHealthcare chief executive Jeannine Rivet said the company hopes the change will pay off with increased enrollment, customer loyalty and happier physicians.

United “wants to restore the joy and art to practicing medicine for physicians and get us out of the way,” she said. Under the old system, “we were creating a hoop that somebody had to jump through,” Rivet said, and “we didn’t make it a satisfying experience for anybody.”

The policy change, first reported in the Dallas Morning News, comes at a politically and commercially pivotal time. The House recently approved a “patients’ rights” bill that much of the managed-care industry is trying to stop from becoming law, partly by arguing that the industry is reforming itself. Meanwhile, now is the season for many Americans to choose their health plans for next year.

Rep. Greg Ganske (R-Iowa), a physician who has been fighting to curb managed care’s power, said United seems to be “admitting that they were wrong in the first place . . . in trying to substitute their inadequate expertise for the treating physician’s.” Ganske said United’s announcement may be part of the industry’s effort to show that legislation is unnecessary, but “what we really need is something that has the force of law” for all health plans.

The end of the bureaucratic process known as “pre-certification” does not mean that United–the nation’s second-largest health insurer, behind Aetna Inc.–is getting out of the business of managing care. Rather, it will rely on other techniques that it says are more likely to save money and improve quality.

Under the old system, doctors were expected to get United’s approval before proceeding with many of the costlier medical services, such as major diagnostic tests, surgery and hospitalization. Without approval, the doctor could perform the services, but the health plan would not be obligated to pay.

Typically, physicians or their office staffs would phone the company, where their requests would be screened by a bureaucracy of administrators, which could include nurses and doctors. Physicians have complained that throughout the managed-care industry, they frequently must answer to people who know less about medicine than they do.

Under United’s new system, doctors still will be required to contact the health plan in advance of many procedures–but only to address administrative questions such as whether the patient belongs to a UnitedHealthcare plan and whether the proposed care is covered by the insurance policy. The doctor will decide how long a patient belongs in a hospital.

There are exceptions. Prior authorization is still required for several procedures that are often done for cosmetic rather than medical reasons, such as removal of unsightly veins. For some subscribers, prior approval is needed before going outside the network of United doctors and hospitals.

United said it has been denying coverage in fewer than 1 percent of all pre-certification decisions. Analysts note that the process has a “sentinel effect” on physician behavior, much as a state trooper by the roadside influences more motorists than he tickets for speeding.

Yet when United last year stopped requiring pre-certification in a Tennessee experiment, medical costs declined by 8 percent, Rivet said. In other experiments throughout the country this year, the average number of days patients spent hospitalized declined by 9 percent, Rivet said.

United said it is making care better and more efficient by focusing on “care coordination”–doing things such as scheduling inpatient procedures to avoid wasted time in the hospital, making sure the patient has a ride home from the hospital and confirming that equipment such a hospital bed is in the patient’s home as needed before the patient leaves the hospital.

To reduce return visits to the hospital, United will spend more of its resources following up with patients to make sure they are taking their medicine and eating properly. If necessary, nurses will be sent to the patients’ homes to help them use devices such as inhalers for asthma, Rivet said.

United plans to make more use of profiles that track the way its doctors practice medicine, she said, and it will begin using those profiles when deciding whether to keep doctors in its networks.

United expects to save $ 25 million a year from laying off an undisclosed number of the employees who did the pre-certification reviews.

Aetna would not comment on United’s action. AMA President Thomas R. Reardon, though, said the move “will benefit both patients and physicians.”