Managed Care Dilemmas

James J. De Santis, Ph.D.
Post Office Box 894, Glendora, CA 91740-0894
(818) 551-1714

The reader is welcome to print any screen from this website for personal use only as
long as author, copyright, and contact information are not removed.

What is Managed Care?

A significant transformation of the health care delivery system has occurred
over the past ten years--90% of Californians have been shifted to a new
type of health insurance called "managed care." Managed care
organizations--or "MCOs"--may go by various names, like HMO, PPO, EAP, or
IPA. Such insurance may be part of a benefits package offered by an
employer or union. Managed care is a business strategy to increase
efficiency and cost-effectiveness by reducing the use of unnecessary
services.

When it comes to health care, this approach raises some ethical dilemmas.
Will an increasingly competitive marketplace pressure MCOs to exploit an
inherent conflict of interest if they can financially profit by limiting service?
In actual practice, we find that, people stop therapy when they no longer
need it. In fact, research shows the average length of outpatient therapy is
about six sessions. A managed care strategy may be fundamentally
inappropriate for psychological therapy because it compromises two
important aspects of that therapy--control and privacy.

Loss of Control

Psychological therapies generally emphasize the development of personal
responsibility and self-determination. Therapy is guided by the professional
judgement of the therapist and facilitated by the motivation of the client.
When you opt to have a third party like an MCO pay for services, your
therapy becomes subject to the MCOs control.

MCOs may discourage your use of benefits by means of financial
disincentives like high deductibles or copayments that actually increase as
treatment progresses. Access may be restricted by a gatekeeper like a
primary doctor or a case manager who is employed by the MCO to decide if
a person can meet with a therapist.

Clients may be assigned a therapist or allowed a choice from only a limited
panel of therapists that the MCO selects. MCOs are free to deny
participation to any therapist without explanation. Your therapist can be
terminated without cause and be required to transfer you to another
therapist chosen by the MCO.

Almost all MCOs deny treatment for some kinds of issues, such as marital
conflict, parent-child conflict, personal growth, bereavement, or evaluation
of learning disabilities. Certain services may be excluded from coverage as
well like psychological testing.

Policies practiced by MCOs effectively may result in what many
professionals consider a "rationing" of services. While clients are told their
benefit includes a specified number of visits available per year, like 20 visits
a year, they are often not told that the actual number of visits allowed will
be subject to the discretion of the MCO. MCO's may disallow your full
benefit.

Customarily, a case manager who is employed by the MCO--who may not be
a therapist and who never meets the client--will monitor treatment, review
decisions made by the therapist, and decide if requested services are
"medically necessary." These measures restrict the autonomy of the
therapist in making decisions about care based on their professional
education, training, licensure, and experience.

MCOs usually require the therapist to make repeated, periodic requests to
continue coverage after every few therapy visits. Treatment can sometimes
be interrupted or delayed because of the administrative time required for
phone calls and paperwork to obtain these additional authorizations.

Most MCOs emphasize short-term goals and urge brief approaches that
must hurry through painful issues, disregard underlying causes, and treat
only the symptoms of the problem. For anxiety or depression, some MCOs
prefer the use of psychiatric drugs or may require you to see a psychiatrist.
An extensive appeal process may be necessary before reversing MCO
decisions about your treatment. Unlike a therapist, MCOs are immune by
federal law from being held liable for injuries caused by failure to exercise
due care in the decisions they make. Effective January 1, 2001, health
plans are liable for any and all harm they cause, however.

Loss of Privacy

Privacy is the basis for an effective client-therapist relationship. The
therapist's office must be a safe place to discuss private feelings and
thoughts in comfort and dignity. With involvement of an MCO, whatever
clients tell their therapists is often no longer private.

On first arriving at a therapist's office, clients may feel so bad or so anxious
to just get started that they don't care who knows about their treatment.
They may consent to the release of extensive private information to an
MCO without considering the implications. The therapist may then be
required to disclose detailed accounts of sensitive information you
discuss--your thoughts and feelings, family problems, love life, addictions,
and financial or legal difficulties, without additional consent or notification
to you.

The control which MCOs need to restrict coverage is primarily achieved
through review of a client's personal information. Mandatory reports are
transmitted by the therapist to the MCO by telephone, mail, or fax. This
information is usually entered into a computer for future reference, most
often filed under the client's social security number.

While MCOs usually assure clients that no information will be released to an
employer or other parties, the therapist has no control over the security of
this information once it has been sent to the MCO. One study indicates that
as many as 17 employees of an MCO may have access to a client's private
information.

What You Can Do

Possibly the surest method of safeguarding your privacy is to not waive
your right to confidentiality in the first place. In the last five years, a
growing percentage of people have been placing greater emphasis on
preserving privacy than on saving money--purchasing mental health
services privately from their therapist.

If you must rely upon insurance, obtain a plan that entitles you to all
services that will address your needs. Quality mental health coverage does
not discourage access through gatekeepers or deductibles, does allow you
the freedom to choose your therapist, does not include financial incentives
to limit care, does offer a broad range of services, does not restrict the
professional autonomy of your therapist, and does preserve a high degree of
privacy for you.

Clarify your coverage with your union or employee benefits manager before
you need it. If you have a managed care plan, ask your employer or union
for an alternative.

If you use managed care insurance, ask your therapist how services may be
affected--including what information may be released and to whom and
what constraints may be placed on your therapist in treating you.
Understand your options for appeal. If services are disallowed, don't
immediately stop treatment; it is appropriate for you instead to discuss the
matter and all your options with your therapist first. MCOs can deny
coverage, they cannot deny service.

If you exhaust your insurance benefit and still would like to continue
services you have been receiving, discuss a plan of care with your
therapist.

Advocate with your representatives in government about concerns you may
have about managed care practices and ask for legislation to regulate the
managed care industry.