HEALTH SERVICE BROKERS


A MONOGRAPH 

Richard P. Kusrow 

INSPECTOR GENERAL 

OEI-Q5-89-00510 OCTOBER 1990

EXECUTIVE SUMMARY 

PURPOSE 

This study was conducte to identify mechansms use in the private setor to control medcal 

costs which might be suitable for goverment heath car progrs, parcularly Medcar. 

SCOPE 

The tenn "heath servce broker," as used in this repo refers to any business that establishes 

and monitors provider networks, provides utization magement servces or seurs 

discounte medcal servces and supplies. Ths repo provides an overvew of method used 

by health service brokers to maage health car costs and utization. Ths study reports on 

techniques which brokers employ to ensur their succss in eah ar mentioned above. 

While this report looked at the overall feasibilty of trsfenig these approaches to 

government progr, working out the speifc mehanics wi be left for futue studies. 

METHODOLOGY 

In-person and telephone intervews were conducte with a pursive sample of brokers 

providing utilization maagement, taete discount purhasing and netWorkig servces. 

Discussions were held with the Health Ca Financig Admstrtion (HCFA), acadmicias, 

representatives of professional organzations, corportions and expert in ths field. A tota of 

51 intervews were conducte. 

FINDINGS 

Effective provider networks control network membership, regularly assess 

utiization of servces and remove servce intensive providers. 

A varety of approaches coupled with stadadize deision trs and other 

innovations ensur the success of utiization review. 

Targeting speifc goo and servces for bul purchase at different levels in the 

distrbution chain can produce savigs and mata patient access. 

Individual case management could improve qualty of car, incras efficiency and 

mae better use of benefits for chrnically or tealy il patients. 

CONCLUSION 

Many private sector mechanisms for contrllng health car costs appear to have potential for 

Medcar, Medcaid and other DHHS progrs including those adnistere by the Public 

Health Service. Each component should study the mechanisms used by the private setor to 

determne whether any can or should be adpted to their progrs. 
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . 

.. . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . .. . . . . .. . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . .. . . . . . . . . . . . .. . . . . . . . . . .. . . . . . . . . . .. . . . . . . . . .. . . . . . .. 

TABLE OF CONTENTS 

EXECUTIVE SUMMARY 

INTRODUCTION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

PURPOSE. . . . . . . . . 

BACKGROUND . . . . . . . e.


SCOPE 

METHODOLOGY. . . . . . .'. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

CHAPTER 1: Provider NetworKS. . . . . 

Effective provider networks control membership, regularly 

assess utilzation of services, and remove service Intensive 

providers 

Employers as purchasers of comprehensive health 

services . . . . . . . . . . . D . . .. 

The HCFA as purchaser of comprehensive health services. 

CHAPTER 2: Utilzation Review.. . . . 

Brokers, employers and organizations favor a combination 

of utilzation review (UR) techniques for an effective UR 

program . . . . . 8. 8 . . . . . . . . . . . . ..


Employers as reviewers of health services. 

The HCFA as reviewer of health services. 

CHAPTER 3: Targeted Purchasing .. 15 

Targeted purchasing In the private sector has developed 

beyond the purchase of prescription medicines and 

durable medical equipment.. . .. 15 

Employers as purchasers of targeted medical services 

and supplies 

The HCFA as purchaser of targeted medical services and 

supplies. 

CHAPTER 4: Individual Case Management (ICM) ......................... 18


Brokers believe ICM Improves quality of care, Increases 

efficiency and makes better use of benefits for patients 

with catastrophic or terminal diagnoses or with chronic 

conditions. .................................................... 18


Private Sector Individual case management 

The HCFA as Individual case manager 
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. .. 

CONCLUSION . . . . . . . . . II . . . . . . . 


BIBLIOGRAPHY. 
INTRODUCTION


PURPOSE 

This study was conducted to identify mechanisms used in the private sector to control medical 

costs which might be suitable for government health care progrs, parcularly Medcar. 

BACKGROUND 

In 1965, health care costs accounted for 6 percent of the gross national product (GNP). 

Accordig to a recent repon issued by the Commerce Deparent, health spending in 1990 

wil approach $661 bilion and account for 11.5 percent of the GNP. The Commerce 

Deparent also projects that spending on health car in the United States will rise 10­

percent annually through 1995. 

The escalating cost of health car has led third par payers employers, insurrs and the 

government to seek new methods to curb these rising costs. In 1983, Medcare 

implemented the prospective payment system (PPS) to adess Par A inpatient costs. 

Following the adoption of PPS, Medcare undenok a number of policies intended to generate 

savings for ambulatory car services. These policy actions include a physician-fee frze, 

reductions in payments for overpriced procedurs, balance billing reform and incentives to 

encourage physicians to accept assignment. Despite Medcar s effons to contrl health car 

costs, expenditurs continue to grow. 

As Medicar purued cost contanment measures, health car providers responded by shifting 

more of their costs to private sector third par payers. Prvate sector health car costs soard, 

and employers became disenchante with trtional health car payment mechanisms and 

their inabilty to reduce costs and control utization. Increasing numbers of employers 

assumed control of their employees ' health plans and became self-insured. The more 

employers became involved with their health car plans, the more they realize that they 

lacked the expenise neeed to control costs and utization. New businesses specialzig in health car cost contanment moved in to fil ths vacuum. 

To compete with the new companies offering specialze cost contanment servces, health 

maintenance organizations(HOs) and traditional health insurers "unbundled" segments of 

their existing business and began marketig the individual specialze services to employers. 

An employer might contrct for admistrative services from one company, provider networks 

from a second and utilization management services frm a third. This unbundling or 

boutiquing" of individual health care cost contament services spawned the health servces 

broker industr.


The essence of the philosophy of health service brokers is a flexible pragmatism and a 

willngness to tr innovative approaches to managing progr costs and utiization, while 

maintaning quality of care and ensuring access to needed services. 
Health servce brokers rage from large national corpations to individuals providing 

services locally, and represent a wide varety of philosophies and approaches to controlling 

health car costs and securng health car servces. Some of the health servce brokers we 

contate for this repo provide a single heath relate servce, while others provide 

multiple heath services which they boutique or sell as customize packages to employers,

thir par payers and others, including other heath servce brokers. Health servces brokers 

attempt to contrl their clients' health car expenses in a varety of ways. Ths report focuses 

on four speific aras where brokers clai to achieve savigs and control costs by: 

establishing networks of doctor, hospitas and other health car spialties 

whose car is demed to be cost-effcient, medcaly competent and appropriate; 

combining a varety of utiization review (U) tehniques to educate health 

care providers concerning unnecessar, excessive and inappropriate procedurs; 

prices; and, tageting certn medcal supplies and seces for purhase at discounte

providing individual cas maagement (lCM) for some patients. 

SCOPE 

The tenn "heath service broker," as used in this repo refers to any business that establishes 

and monitors provider networks, provides utiization maagement servces or seurs 

discounted medcal servces and supplies. This report provides an overvew of method used 

by health service brokers to maage health car costs and utilization. Th study report on 

tehniques which brokers-employ to ensur their succss in each area mentioned above. 

Whle this report looked at the overa feasibilty of trsferrg these approaches to 

government progr, workig out. the spific mehanics wi be left for futu studies. 

The Offce of Inspetor General (DIG), Ofce of Evaluation and Insptions (DEI) plans to 

conduct more detaled insptions on some speifc approaches use by health serce 

brokers. There ar curntly studies in the DIG workplan focusing on private setor utilition 

review, seond surgical opinion and Medcaid cas management 

METHODOLOGY 

In-person and telephone intervews were conducte with a pursive sample of brokers 

providing utilization maagement, taeted discount purhasing and networkig servces. 

Discussions were held with the Health Cae Financing Admnistrtion (HCFA), acadmicias, 

representatives of professional organizations, corprations and experts in ths field. A tota of 

51 interviews were conducted. 
We asked the peple we contate durng ths study how they control health car expenses, 

and to identify medcal prours and other servs which they found to be goo candidates 

for cost contrl effort. We also asked them to provide an estimate of savings they achieved 

from their method. 

Savings repone by broker and by clients vared dependig on the combination of servces 

provided and the aggrssiveness of the brker and client in applying these approaches. We 

did not attmpt to validate estites of savings, and therefore did not include them in this 

report. 

Qualitative analysis of the intervews was used to identi method which might be suitable 

for addtional indepth researh to determe the feaibilty of transfenig the approach to 

government setor health progr. We expet that more detaled studies wi offer a more 

comprehensive analysis and statement of potential savings which can be derived from 

adopting health service broker tehniques. 

In adtion to collecting service intensity and payment data relate to specific proedures, 

DEI's Statistical Analysis Grup (SAG) develope a methodlogy and obtaned HCFA data to 

detennne whether HCFA had the capabilty to distiguish cost-effective providers frm 

outlier" providers who bil for substatily mor seces than their pers. Th analysis was 

refined by examing the data bas on physician spialty and by including data on patient hospitaiztions as a measur of severity of iless. 

In the developmenta stage of ths study, we taed to acadmicias and business peple knowledgeable in employee health benefits, as well as some health servce brokers. Based on 

these exploratory dicussions, we identified two broad aras where health servce brokers and 

employers have concentrate their effort in an attmpt to contrl rising health car costs: 

provider networks which provide a comprehensive rage of servces at a 

discount to their clients, and 

utilization review tehniques which assur that appropriate car has ben 

rendere in appropriate settgs. 

We also discovere that many brokers and employers had refined these tehniques and applied 

them to speifcaly identified servces and patients though tagete purhasing and 

individual cas management. 

This report reflects what we leared frm brokers and employers who purhase their servces. 

The report is divided into four chapters: provider networks, utiization review tehniques, 

tagete purhasing and individual cas maagement.. In each of these four chapters we 

examne what the private sector is doing and have attmpte to identi litations and 

obstacles to implementation of these concepts and key elements necessar for success. 
CHAPTER 1: Provider Networks


Effective provider networks control membership, regularly assess utilzation of 

services, and remove service intensive providers. 

Employers as Purchaers of Comprehensive Health Serves 

As employers beam self-insur and took over contrl of their health benefit plans, they 

beame awar of the trmendous power they hold as purhasrs of health car servces. They 

reasoned that they could apply the sam prudent buyer priciples they used in their business 

operations to the purchas of health services. Using heath service brokers, they exercised 

their purhasing power to establish provider networks. 

Provider networks operate on the principle of channeling a prectable patient load to 

physicians and suppliers who pratice medcine effciently. In exchange for an incrased 

patient load, physicias and other providers of medcal car and supplies agr to discount the 

fees they chare for their servces. Twenty-one health servce brokers intervewed for ths 

report ar involved in establishig networks to prvide health car servces for their clients. 

The networks encompass prefeIT provider organzations (PPOs), HMOs, independent 

practice associations (!As) and exclusive provider orantions (Es). 

Health service brokers contol membershi by screening canddates for their networks; 

all request malpractice and disciplinary informtion from candidates. 

Crteria used by health servce brokers in selectig providers for their networks var 

considerably depending on local conditions. Al the brokers we spoke with reueste 

information concerning mapratice clais or discipliar actions from candidates. By 

checking for any evidence of mapractice or disciplinar actions, brokers feel they can exclude 

frm their networks providers whose qualty of car may be questionable. 

Prviders reueste to join networks must agr to discount the price of their servces in 

retu for a potential incras in their patient case load Institutional providers, such as 

hospitas and nuring homes, ar usualy reimbur on a per diem basis. Individual 

practitioners, such as physicians, ar usually paid using fee schedules. The amount of 

payment a provider parcipating in a network can expet to reive is documente in a 

contrt which is periodcaly renegotite 

Patients ar encourged to use the network providers though incentives such as lower 

deuctibles and copayments, and discourged from using "out of network" providers by 

higher out of pocket expenses. In an EP, patients pay al of the medcal expenses they incur 

outside of the network. 

Most brokers feel that negotiatig discounts on fees alone wi not produce suffcient savings 

unless utiization contrls ar also built into the provider contrt. A potential exists for 

providers in networks to offset discounts for servces by incrasing the number or intensity of 
services they provide to patients. Five brkers said that the networks they established had 

faied to prouce anticipate savings beause discounts were offset by increased services. 

Accordig to one broker, service intensive providers ar often those most wiling to give the 

greatest discounts beause they know that they will mae up the difference by increasing their 

volume of servces. 

Some HMO failurs, and the inabilty of some networks to produce re dollar savings, were 

attrbuted by some to a network's failur either to exclude service intensive providers or to 

contrl their intensity of servce. Whle aberrt providers of this sort may be a sma 

percentage, they can erod or negate any savings expete from the network. Six brokers said 

that buildig a goo utiization review prgram to complement the discounte pricing is the 

key to adssing this problem. 

Seven brokers identiy potential candidates for their networks by analyzing relevant claims 

data to determe utiization pattrns. They use this infonnation and provider background 

infonnation to detennne whether a physician is a suitable candidate for their network. For 

institutional providers, they look at the range of seces offere cost report, utization data 

occupancy rates, stag ratios, etc. These brokers ar confdent that these measurs enable 

them to scrn out providers with less than perfect crntials, as well as those providers with 

aberrt utiliztion patterns. 

Some brokers build utilization controls into their contacts with providers. Many more 

use claims data analysis to evaluae provider utlizatin before renegotiating the 

provider contract. 

Seven networks requir that their members agr to submit-to the network' s pratice protocols 

and utilization review mechanisms. These agrments ar viewed by brokers, as an effective 

means to contrl utiiztion, ensur qualty of patient car and reuce malpratice rik. 

Prtice protocols are usually based on accepte stada of medcal pratice, researh on 

effectiveness, consultation with expert and consensus of the network mem rs. Post 

payment analysis is often use as the basis of review pror to renewal of individual member 

contrts. One employer and thn brokers said they use clai data either in valdatig 

curnt contract compliance or to renegotiate contrts at renewal tie. Brokers using 

practice protocols ensur compliance by periodcally analyzig individual member pratice 

pattrns. 

Clearly, access to and analysis of claims data is crtical to the success of a network, whether 

use in selecting potenti providers, or monitoring their behavior afr inclusion in the 

network. Any network that has the means to identi and wee out servce-intensive providers 

before inclusion in the network, and monitor utization with the network, is well ahead of 

the game. 
The HCFA as Purchaer of Comprehensive Heal Serves 

Although beneficiary freedom of choice is protected by law, HCF A is exerimenting with demonstration projects to evaluae thefeasibility of using provider networksfor 

Medicare. 

The HCFA has reently undenaen five PPO demonstrtion projects to evaluate the feasibilty 

of using networks in the Medcar progr. The objectives of these demonstrtion projects 

are to test the feasibilty of this fonn of servce delivery, to determne its attactiveness to 

beneficiares and to assess its effectiveness in controllng the volume of services biled to 

Medcar. 

Four PPO projects under study ar enrollment modls; the fifth is a non-enrllment modl. 

Enrllment moels reuir that beneficiares elect to parcipate. Beneficiares must use 

network providers or pay a grater shar of their health car bil. In the non-enrllment 

project, beneficiares do not elect to parcipate in the PPO network but ar enrlled 

temporay whenever they use the servces of a provider in the PPO network. Unlike the 

enrollment modls, the patient pays no penalty for using a non-network provider. 

While HCFA has the authority to conduct demonstrtion projects to detee the feasibilty 

of using networks to provide comprehensive heath servces, widespread implementation 

appear to be prohibite by curnt Medcar law, which guartes beneficiares tTom 

choice in selection of medcal providers. Accordig to HCFA, the law prohibits Medcare 

from stering patients to selecte providers. The HCFA alSO feels that curnt reimbursement 

mechanisms preclude negotiating with providers for dicounts. In HCFA's view, these 

constraits severely limt their abilty to experiment in ths area. 

The HCF A ha the capabilty of identifing service intensive providers through analysis 

of its own Medicare daa bases. 

To determe whether HCFA data could be use to scn provirs for a network, we 

analyze HCFA's Pan B Medcar Annual Data (BMA) files and hospi adsion fies 

for 1987 to see if we could simulate the reviews of cla data that brokers perform when 

evaluatig potential physicians for their networks. Using the 1987 BMA data we aggrgated 

the servces each beneficiar had reeived to the physician who lat saw the patient. We 

assume that the physician last sen by the patient operate as gatekeeper and was respnsible 

for ordrig the services that followed Once we aggrgate services, we aryed the 

providers accordng to servce intensity. Figu 1 indicates the results of our analysis. 

shows that 91 percent of physicians who biled Medcar in 1987 provide on average, 20 or 

fewer medcal servces to their patients. We assumed that physicians billig more than 20 

services were outliers and may not be goo candidates for a network beause of their service 

intensity. 
FIGURE 1 

Provider Service Intensity 

(% = number of providers) 

LESS 

Services 

91% 

MORE 

Services 

Based on a one percent sample of the 1987 BMAD files 

If Medcar had the abilty to influence a patient s choice of physician, patients who chose an 

outlier physician would have to bear a grter shar of the medcal costs though incrased 

coinsurce and other incentives. Whle our assumptions may bias which physicians 

identied similar aIYs of data could be done using dierent assumptions. 

We found that neither severity of ilness (measur by hospitations) nor speialty 

accounte for the intensity of servces some physicis provide. In the past, physicians 

providing intensive services to their patients have argued that their patients ar sicker and 

therefore reuir more medcal servces. Oter physicis argued that their pratice 

speialization accounte for the intensive servces their patients reived We analyze the 

fruency of services provide to beneficiares who were hospitaze in 1987. We also 

analyze the intensity of servces by physician speialty. Physicians who were outlers in our 

initial analysis were also outliers in their speialty. Patients of outlier physicians did not have 

a grater incidence of hospitazation than their more conseative counterpar. 

While this method of analysis enables tagetig of individual physicians, geogrphical 

location and other factors should be taen into consideration before excludig a parular 

provider frm a network or penalg Medcar patients for using them. The purse of our 

ilustration is to demonstrte that HCFA has data which could enable them to identi servce 

intensive physicians whose parcipation in a network might be undesirble. 

Issues for further stu 

Studies should be considered on the tys of legislative changes that would be nee 

pennt the establishment of provider networks. Other studies should exame the ty network that w uld be neeed to meet patient nee. Is it bettr to have national, regional or 

local networks? Should they include the full spectrm of medcal providers, or only pri care physicians? Should government piggyback on alady established private seCtor 

progrs, or contrl their own networks? Do providers who agr to the largest discounts use 

more services to offset their discounts? 
Regardless of the answers found to these questions, successful networks include the following 

items: 

a means of identifyng and excluding servce intensive providers; 

a method of incorpting prtice guidelines into provider contrcts; 

a means of collecting stadaze data to monitor network utization and 

efficiency; 

a method for analyzing data to determe network financial condition and 

individual perfonnce with the networ; and 

a means of influencing patient choice of provide. 
CHAPTER 2: Utilzation Review


Brokers, employers and organizations favor a combination of utilzation review 

(UR) techniques for an effective UR program. 

Employers as Reviwers of Hell Serves 

Utilization review (U) is a tenn that covers a broad sptr of tehnques use 

individually or in combination, to exame the use and intensity of servces rendere to a 

patient. Such tehniques include, but ar not lite to, prosptive review, concunnt 

review, retrosptive review and second surgica opinon (SSQ). In the last dead, the use of 

UR cost contanment strtegies has incr signcantly. 

The Health Insurance Association of America estiates that about half of all U.S. businesses 

are using some fonn of UR. These businesses and health servce brokers believe that 

contrllng the use and intensity of servces provide to patients is crtical to contrllng rising 

health car expenditus. Of the 37 health car brker we intervewed 32 offere utization 

review or utiization maagement servCes. Ony one broker did strctly retrosptive review 

and severa did strctly prosptive reviews. The vast majority employed a combination of 

strategies. 

The scope and focus of UR vares by employer and by broker. Some approaches review 

servces rendere The more common approach tagets speifc prurs, diagnoses, 

providers or high doll servces for review. 

The infonnation resulting frm UR is use by brokers for may purses: 

to identify potential members for inclusion in networks; 

to monitor networ provide compliance with agr-upon prtice gudelies; 

to make coverage determnations or paymnt deisions; 

to identify medicaly unnecessar or excessive servces; 

to preclude cert the kinds of servces which have ben demonstrte by 

medcal evidence to be ineffective; and, 

to identify patients for individual case maagement (lCM). 

Many brokers and employers use UR services to educate patients about probable outcomes 

from using certn services and tr-offs associate with using alternate servces. Utition 

review can result not only in less expensive car, but also in improved qualty of car. 
Prospective review can reduce the nwner of costly invasive procedures. 

Prspective review is used to ensur a 

course of treatment which is appropriate, 

cost effective and of high qualty. 

Prospective review is not applied to 

episodes of emergency treatment. The 

people with whom we spoke generaly 

agreed that prospective review has the 

greatest impact on contrllng health 

costs, because it can result in the use of a 

less costly tratment or procedur, the 

use of a less costly settng or the 

postponement of a proedure unti 

alternative medical tratments have ben 

tred. 

Table 1 lits 21 of the. 57 specifc items 

which brokers mentioned as suitable for 

prospective review. Table 1 contans 

only those items with Medcar 

expenditurs exceeng $15 mion 

annually. While the servces identified in 

Table 1 ar based on broker experience 

with prospective review, many have a 

considerable body of medical research 

questioning the abilty of the servce(s) to 

improve a patient s quality of life. For 

example, in research conducte by the 

Rand Corporation on physician behavior 

for the National Institutes of Health 

Consensus Development Progr, 

coronar arery bypass surgery was 

found to be unjustied for 14 percent of their 

sample, and "equivocal" for another 30 percent 

Conqurrent review can identif potential cases for ICM. 

Concurnt review occurs during the coure of a patient s tratment and reuirs that approved 

admssions be recertfied at specific intervals. Virally al the brokers involved in prospective 

review also conduct conCUITent reviews which are priary used to monitor hospital 

admssions and other institutional car. Most brokers conduct concurent reviews over the 

telephone; some conduct on-site reviews. . Many brokers conductig conCUITent care reviews 

use software progrs to minimze reviewer subjectivity and to ensure consistency in the 

decision process.

The goal of concurnt review is to prvent the use of unnecssar or inappropriate services; 

thereby reucing costs. Continued stay review determes whether fuer hospitaization is 

necessar, identifies other trtment options and evaluates potential discharge planing nee. 

Concurnt review also plays an imt pan in identiyig cass that might be suitable for 

ICM. 

Retrospective review can idntif providrs with abe"ant utlization an procedures 

vulnerable to manipulaton. 

Retrospetive review is a multi-facte approh to UR which ocur after the patient 

tratment has ben prvide It is used by heath sece brokers to idnti: 1) potential 

providers for network; 2) provide who exce agr upon tratment norm; 3) servce 

intensive providers; and 4) patients for ICM 

Retrospetive review is also use to document for the employer or insurr that the goos and 

services they paid for were actually reived by the patient. It assesses the abilty of systems 

alady in place, such as prospetive review, to ensur the medcal appropriateness of 

servces. It is also use to identiy speifc servces which have a high lielihoo of havig 

ben upcod frgmnte or otherse mapulate to incr reimburment. Data frm 

retrosptive reviews is alo use by brokers to renegotite ras and contrts with prviders 

in their networks. 

Brokers feel all UR program benefit from use of standdized softare program 

which provide more consistent criteria for evaluation. 

A number of brokers have purhased softwar progr designed to provide mor consistent 

means for detennning whether cert medcal procurs ar warte These softare 

progrs employ clinically documente stada of car which enable their users to 

detennne whether a propose medcal prour is necssar and approprte. The softwar 

not only promotes mor consistency in the deision procss, but alo douments the crteria 

for deni or approval of a medcal prour. If the computer assiste review indicates that a 

propose prour is of questionable value, a seond opinon may be scheduled and/or a 

medcal consultat may discuss the propose prur with the attndig physician befor 

deiding whether to approve the procur. 

Second surgical opinon (SSO) is a UR mechansm that some brokers feel benefits from the 

use of stadaze softwar. While most brokers felt that SSO was not a very cost effective 

UR tehnque, others disagr and claied signcant SSO savings. Those broker who 

claime success with SSO, use SSO only in selecte cass. Some brokers selecte 

procedurs which researh has shown to be most liely to be inappropritely used Others 

selecte candidates suitable for SSO by using their stada prior authorization softar. 

Those brokers who felt that SSO was not a very cost effective UR tehnique cite extrmely 

high SSO confmnation rates as the ma reason for SSO program faiur. Ths may be due to 

the blanet approach often use rather than the more focused approach use by those who 

have had more success. Brokers claiming SSO success also speified who would conduct the 
SSO consultation. They felt that ditig patents to select providers mize any conflct 

of interest and resulte in a more objective SSO. 

Obstacles to effective UR are resistane by providers and amivalence by 

employers/payers regarding enforcement ofUR decisions. 

Durg the cour of our intervews, we as what the major obstales to cost/utization 

management were at this time. Ten brokers told us that ther was prvide resistace to the 

system, a lak of physician coopetion, and a nee for employers and insur to enforc their 

DR deisions. When questioned about what changes wer nee to overcome these 

obstales, twelve brokers observed that ther is a nee to wor mo closely with providers 

and establish workig relationships that de advers situations. 

One way to adss these obstales may be though use of clical pratice protools or 

guidelines. The development of pratice guidelines is viewed by some brokers and expert as 

the key to improvig the qualty of car provide to patients as well as contrllg use. 

Brokers that have develope their own stada of pratice cla that most physicis 

respond well to them and that changes in physician behavior do occur. Physicias who 

repeatey fail to abide by cliical prce gudelies ar removed from the network. 

The HCFA lI Reviwer of Healh Serves 

In comparson to the private setor, Medca s apprach to UR priy has ben lite 

retrosptive reviews. In reent year, HCFA has undenaen severa projects designed to 

broadn their approach to UR. 

The HCF A' s fiscal agents hae developed alternative review program for their private 

business, but hae no incentve to use themfor Medicare. 

May of HCFA's contractors have purchas or develope alternative UR progrs simar 

those offere by brokers for use in their prvate business. Several have purha UR

deision softar for use in their private business. These contrto raly extend to their 

Medcar business the UR progr they have develope or purhas for their private 

business, beause there ar no incentives for them to do so. Softar which has ben 

purchas or develope by HCFA's fiscal agents is not use for Medcar clai 1iause the 

authority for mag deisions concerning the appropriateness of medcal car and procurs lies prily with Peer Review Organizations (PROs). 

HCF A' s PROs prospectively review a few surgical procedues, but muh is left to each 

PRO' s dicretion. 

The HCFA curntly reuirs PROs to prospetively review a select number of proedurs includig coronar arry bypass and catat surgeries. The PROs have the option of 

selecting which procedurs they will prospetively review. Each PRO has ben left to develop 

its own crteria for use in assessing the mecal necessity of the procedurs it has selecte for 

prospective review. 
The HCFA would lie to move towar computerization of the prior authorization process. 

However, their plans do not call for the establishment of a national system using a uniform 

decision tree for all PROs. The system HCFA envisions would allow each PRO to establish 

its own system. Accordig to HCFA, the statute which pennts prior authorization of cena 

Medicare services does not contemplate national stadads for PRO decisions. But the statute 

does not preclude the use of national stada either. Failur to adopt a national uniform 

approach with documented stadads for allowing or disalowing a parcular proedure may 

leave Medicare s prospective review program vulnerable to inconsistent decisions. 

The Medicare program conducts concurent review on certain Part A services, but 

without computer assisted guidelines. 

Medicare conducts "concUIent" reviews on some skilled nuring home stays, rehabiltation 

services, home health visits and other Par A servces as par of their claims processing. 

Informtion, in the form of treatment plans and, in some cases, physician certfication as to the 

need for continued care, is provided on the claims submitted by providers. Decisions on 

whether to continue coverage of a benefit, and for how long, is detennned by examning me 

infonnation submitted along. with the clais. The Medcar proess can be descnbed as less 

aggressive compared to some private sector approaches which ar conducte on site or over 

the telephone, and less "objective" compar to the use of computer assisted guidelies used 

by brokers to reuce the subjectivity of UR deisions. 

The HCF A is exerimenting with alternative approaches to retrospective review. 

The HCFA is cUIently sponsoring some demonstration projects involvig retrspective 

review. In one project, a health servce broker has been subcontracted to conduct utilization 

reviews. The purpose of this project is to detennne if the use of private sector contrctors 

would improve Medicar DR effons. This project has generated some complaits from the 

provider community but appears not to have had an effect on patient satisfaction with the 

Medicare Program. The savings from the use of an independent UR firm appear to be 

significant. In another demonstrtion project, a Medcar caner has ben developing screens 

which will enable them to match diagnosis with tratment. Early res lts indicate the scrns 

have been successful in identifyig aberrant practices where the car and servces given to a 

patient ar not indicated given the diagnosis. 

These experiments indicate a recognition on the par of HCFA that its curnt UR activities are 

not yielding the expected results in terms of cost avoidace and savings. Some people with 

whom we spoke felt that HCFA has permtted their contractors too much latitude in their approaches to UR and that many of HCFA' s contractors did not effectively use their UR data: to 

corrct problems in the Medicar system. One broker we spoke to felt that there may be a conflct of interest on the par of caners, and a reluctance by PROs to challenge peers, when it 

comes to dealing with utiization issues. 
Issues/or fuher stud 

Studies should be conducte to detee the effecveness of UR activities alady in plac 

government progr. New apprhes to UR should be explore Would national stadadi softwar f tate a more consistent apprh to desion-mag? Should 

independent subcontrto be use for UR activities? Should Meca s fIScal contrtors, 

many of whom own pror authortion softar, scn cass so that only unrsolved cass 

ar forwarde to the PRO? Should SSO be perfor by a designate group of independent 

subcontrto, rather than left to a physician of the patient s choice? 

Whatever tehniques, or combination of tehniques, ar use an effective UR prgr should: 

provide a review tr so that the proess can be duplicated by an independent 

thir par; 

provide some method for doumentig the procss and assurng consistent, 

unifonn decisions; and 

prouce reliable, unifonn data to assess individual contrctor performce, and 

to accurtely trk cost savigs and effectiveness. 
......... ........... ...................... ... ...... ...... ............... .............. 

...... :::. ........ ................. . .::... ::: ...... ... .. .. ...... .............. ... ............................ ........... ;;: :;; ....... :::. .......,.. ....,...... ...,..............,..... ........ ,...... ::::::::. .............. ... ........... ... ::::::::: ....... .......,,..... . ......... ....... .......... ,!...... :.. ..... ..... . ,.... :::::::. . ..... . ......,,,... .................. ........... ... .... :;;; ::. )::::::::::: ::: ::: :::::: . . ......, ..... ..... . ....... , ....... ........... ..::.... ..... ........... :;:::.:::::: ;:. ........... ......... .. .. ....::)) ...... ....., ... ... :::.... ....................... .. :?: ....... .:::/::..,... ........:::(:. .... :::.:::::. :. . .. ::/........ ........ ........ ...... .. . ............ . ......... .. . !!:

CHAPTR 3: eted Purchasin 

Targeted purchasing in the private sector has developed beyond the purchase 

of prescription medicines and durable medical equipment. 

Employers as Purchasers of Tareted Medical Servces and Supplies


Volume discounts, "bulk" purchasing and competitive biddg for supplies and servces 

varations of the purhasing principle used by health service brokers to establish networks. As 

with networks, volume discounts ar negotiate for specifc medcal goos and services in 

retu for diting patients to contract providers. 

Targeted purchaing now includes a wide variety of costly medical services, such as 

coronary artery bypass grafts (CABG), intraocular lens implants, home intravenous 

therapy and diagnostic imaging. 

While the concept of securng certain medcal items and goos at discount is not new, many of 

the medical supplies and services being purued by brokers are innovative. These tageted discounts ar frequently negotiate for very specifc servces or episodes of treatment. Thus 

they differ frm, and independent of, the discounts derived from a comprehensive network 

of providers. The brokers we spoke with believe this ara has developed beyond the purchase 

of medcal supplies, equipment and drgs to include a wide varety of costly medcal and 

surgical services.


Eighteen of the health service brokers n..."... ........ ""0 .


we spoke with are involved in tageted :tt :J:: purchasing. Table 2 lists some of the 

items they believe can be tageted for :$(m.)tQflj' erilfl :$ijij 

purchase at a discount. The services :OC 

listed in Table 2 are high cost servces 

mentioned by more than one broker. :::t ::::::i: ::::::i::::::: li!iili i:;;;ii. Cert il::........... ""..0...... .....................
 surgical proedurs, such 

::i:: :i. :gHr i::M 1:. 9yjpm nli:. ii: :i.i:::i. iii. coronar arery bypass and catact i::.

surgery, also were mentioned as items !!I:I:il!iiii1jlll!!!llillil:il!!; 

illjll!llil!llilll suitable for tageted purchase. These and j!I Milllilllli!111 

other surgical proedurs were not 

shown in Table 2 because HCFA has lilll!ii(lil!ii!i:llllllijill:j!i;ilt611 illl r,!i!! li:::i!jil!iill!ijj 

::U::. recogniz that alternative procurment ;tt::::.8rtff ?Br9 jhi!iB. Y19!: 

and reimburement methods are suitable ll::: ijp Bm. 

iY!. ::ff: for some high cost surgical proedures. 

ff. 19ry. 

Equally as imaginative as the items and ,II JQg 

procedures being targeted by brokers for 

discount purchase ar the unconventional 

applications of the methods being used to 
seur them. Negotiate package rates with "cente of excellence" (hospitas, ambulatory 

surgical centers and certn physician offces for spc surcal procurs) can, acording 

to brokers and others we inteewed imrove the qualty of patient car and prouce savigs. 

Discounts negotiate with maufactu and wholesalers raer than reta providers 

another promising ar One broker negotiats rebates frm phanutical maufactus 

and does not attempt to secur dicounts frm dispnser. Patients purhas their 

prescptions wherever they choose. Billng for reimburment also remas unchanged The 

patient s insurr reord the quantity and amunt pai for eah drg and periodcaly noties 

the drg maufactur of eah drg quatity reimbur The maufactur repays the broker 

a pre-negotiate amounL Ths approah appe to be the leat intrsive and leat disrptive 

method for seurg drgs at discount. Whe used priy for prescption drgs, it appears 

that this method may alo have possible application to other ar such as durble medcal 

equipment and parntera and entera feengs. 

One employer, with plants in four communities acoss the countr, uses a ma-oder 

phany for prescptions, contrts for discounte durble medcal equipment, has a 

single-sour contrt for mammogr and is explorig the comptitive bid approach for 

denta car, viion car, chiopratic servces, poatr and home health ca. 

Ths employer, and in fact al of the employers and broker negotiatig discounts for tagete 

servces, felt that a detaed analysis of servce nee and maket conditions was essential 

before entering negotiations or lettng out a reuest for comptitive bids. They also felt that 

while a lage-scale, national approach may be appropriate for some seces and some 

markets, the same approach may not be suitable for other. 

The HCFA as Purchaser of Tareted Medical Serves and Supplis 

Although Medicare law does not permt HCFA to engage in targeted purchaing of 

medical equipment an supplies, HCF A ha begun exloring Itcenters of excellence" in 

a demonstraton project involving CABG. 

There is curntly no provision in the Medcar law which would pet HCFA to engage in 

competitive biddng or in negotiation for spifc medcal servces and supplies. Medcar 

would nee a legislative change to implement selective purhasing of servces and supplies. 

Repercussions from exclude providers and suppliers is liely. 

Despite no speific legislative authority to implement taete purhasing, HCFA does have 

the authority to conduct demonstrtion projects to study the feasibilty of seurg some services in ways which were not contemplate when Medcar legislation was enacte One such 

demonstrtion project, curntly being underten by HCFA, involves the use of "centers of 

excellence" to provide some surgical proedurs. The project is just gettng underway with 

selection of providers stil in proess. 
Issues for further stud 

There appe to be a nee to explore what tys of legislative changes would be reuir 

enable governent progr to engage in tagete purhasing. Studies should alo explore 

the following questions: Wht tys of servces would be suitable for tagete purhasing? 

Where in the distrbution chai is it most advantageous to taget purchass, e.g., at the 

manufactur, distrbutor or retal level? 

Regardless of which seces ar tagete or how savigs ar achieved a tagete purhasing 

approach should: 

incorprate utization controls to detet and avoid increas use that might 

negate discount savings; and, 

produce reliable data which can be used to assess cost effectiveness and to 

negotiate futu discounts. 
::::::::::j:::::::::::: :::::::: 

,..,.......... :::::::::::::::::::::;:::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::;:::::::::::::::::::::::::::::::::::::::::;:::::::::::::::::::::::::::;:::::;:: ::. ::::

:::::::::: .....

...... ... .................. .. ..,................... ::::j:::: ::::j:::::::j;::::j:::::;:j:::j::::::::::::: ..,. ... .....,........... ...... ,.... .. .......,............. ::.,..,.. ,....... ......... .......... ...................................... . .. ::: ::::::::,:::::::::::::::

:::::::::..::::::: ::::::::::::::::::::::::!:::::: :::::::::::::::::::::::.::::::

::::: ,,................... .,..,..

:::::.:::::,:::::::::::: ::: 

:::::;::::::::::::::.:::::::: :::;::::::::::::::::: ,.. ,.. ..........

CHAPTR 4: Individual Case ManatJement


Brokers believe ICM improves qualit of care, increase efficiency and makes 

better use of benefits for patients with catastophic or terminal diagnoses or with chronic conditions. 

Privat Sector Case Management 

Individual case management is a prss of diting patients, identied thugh other form 

of UR, into more cost-effective mods of trtment. It is tyicaly use for catatrophic, long 

tenn or high doll medca cas. It may be an integrte component of a UR progr or a 

stad-alone component. Lie other UR progr, its goal is to ensur approprite, qualty 

car and prmote cost control. 

Table 3 identifies some of the aras 

brokers find suitable for ICM. The list 

was limte to costly conditions 

mentioned by more than one employer or _11111811

broker. The conditions liste ar also
 III;;IIII;I;IIII.1111IIIIIIIji

those in which a coordnate approach ::I:llllliil:III;I;II;; II; 

would provide signifcantly better :::::::::::::j:j::::::I, j:j:I::::::j::;::;:::::j:::::::::::::::::Ij::i::j:::::::::::::::::::;:::i:::j::: car to 

the patient than the piecmeal approach ::::::::::i:::::::II:::::;:;::8 9:: jM::::::::::::::::::::: ::::::;::::::::I::::::::::::::: 

which sometimes results under ::::::::i:lq !P!!::m'!mI::::::: ::::::::::::j:::I::I:::I:IjI:::i:I:I::i::::::j::::i::::::::::::::j::, :::::::I::::::: 

trtional coverage. illllllllllllllll:llllllllil:illli. 

Individual case management is often 111 IIII'IIIII'1I:IIIIIIIIIIIIIIIIIII,I:IIIII:IIII!IIIIIII:I:IIII!:IIIIljlllll

mt9M: ::::::::::::i:':::i:::::::::::: :::::::j:j::::i::: referr to as "car maagement ::::::::::::::::::::::i1: :::::I: ::::::I::::::::::::j::::,:::

beause it coordnate$ the mi and ::::J;!!t:' er. 9m:'9 :emRI! level 

of patient car ghout the entie 

course of tratment. Coordation of 

services may include home health car tit

services, outpatient treatment or 

rehabiltation and the procurment of 

durable medcal equipment or supplies. 

These servces and supplies may be 

delivere by networks or by suppliers 

under spial contrt.. The ICM servces may include some health benefits not usualy 

covered under the health plan (such as cert fonns of home-bas car), but demed more 

cost effective in these speial cass. 

Twenty-seven of the brokers and al of the employers we intervewed have some involvement 

in ICM. They felt ICM was valuable beause in toy s envionment catastrophic cass 

constitute a disproportonate share of health care expenditus. Brokers believe that the earlier 

the intruction of a patient to ICM, the grater the control over the use of effcient and cost 

effective services.

In its best for, ICM is a collabotive prss to conate a plan of car. Typicaly, the 

case maager or health car consultat assigned to a patient develops, in conjunction with the 

patient, famly, and health car providers, a trtmnt plan and alternatives which cover both 

the hospitaization and any post-hospita car that may be reui. The case maager assists 

the patient in mang infoned deisions about trtment alternatives and then functions as a 

liaison between the patient, dotor, and insurr. Ths faciltates the development of a 

ttatment plan that not only is appropriate and cost effective, but also one that meets with the 

approval of the patient


Canes for ICM are idntifed through utlizaton review technques or through a 

patient advocate. 

Two strtegies ar used by brkers and employers to identi suitable candidates for ICM. 

The proactive approach is broker intiate the retive is patient intite The proactive 

strategy flags suitable candidates for ICM durg prospetive or concurnt utiization review. 

Cadidates for ICM may be identied by diagnosis, proure, cost or intensity of car. One 

broker told us that the proactive strategy enables them to identify 20-30 potential cases a week 

for their clients. 

The retive strtegy relies on the patient to voluntaly contat a "patient advocate" or 

adviser, employed by the broker or the employer, for assistace on coordating the heath 

plan benefits for a high-cost episo of car. The patent advocate or patient "hotle" alo 

functions as an integr par of some brokers' UR progr by providig patients with 

infonnation on alternative medcal ttatments. In some progr, ths system is also used to 

assist tennnaly il patients in mang deisions and argig for the mecal car they 

nee at the end of their lie. 

Obstacles to ICM include insuffcient patient and provider eduation, and honest 

disagreement over treatment alternative.s. 

Most ICM progrs being conducte by brokers ar volunta, in that P3tients ar not 

reui to use the identied alteatives. We oftn hea that patient parcipation rates of 

such volunta progr ar exttmely low, and that educatig patients and physicis 

concerning avaiabilty of ICM and its benefits is a key obstale which nee to be overcome 

for a successful ICM progr. Many brokers, employers and exprt believe patients want 

and appreate help in assurg that they get the best mecal car possible, and that goo car 

wi not ru them or their famy fiancialy. Neverteless, some of the employers we spoke 

with offere these maagement servces strctly on a volunta, patient-intiate basis, lest 

they appear too intrsive.


Another ICM obstale is honest disagrment over ttatment alternatives. National pratice 

guidelines, outcome assessment research and changes in reimburement incentives were 

mentioned by many of the peple we interviewed as elements that would playa key role in the 

futue of ICM. Prtice guidelines and outcome assessment were considere to be key 

developments that would enable ICM to resolve disagrments over ttatment alternatives in 

the best interest of the patient. 
The HCFA as Individual Case Manager 

The HCFA is capable of identifing service intensive patients, using the resources 

currently available, but lacks the authority to direct such patients into ICM. 

The HCFA does not routiely conduct any ICM for Medcare beneficiaes because curnt 

Medicare law prohibits steering patients to select providers. The nearst fonn of "individual 

case management" in the Medcare progr is a provision which enables patients diagnosed 

as tenninaly il, or their representatives, to elect hospice car in lieu of more costly care under 

the regular Pan A benefit. 

The HCFA sta, with whom we spoke, felt that ICM in the Medcare progr might not be as 

effective as in the private sector, beause of the dierences in the diagnoses associated with 

Medicare patients compar to those covere by private insurce. The HCFA also felt that 

the curnt provisions of the statute clearly define what is covered and not covere by 

Medicare and that the statute may not be flexible enough to allow Medicar to use the most 

cost effective means for securg ICM servces. Some of the brokers with whom we spoke 

also indicated that the Medcar population is unique, and that some of the techniques and 

methods used by the private sector might not be as effective for the Medcar progr 

We leared in our discussions with HCFA that one PRO (Nebraska) is conductig a ICM pilot 

study. Accordig to HCFA, this project is focusing on high cost diagnoses. The obstales 

encountere thus far in this demonstration project ar: 

inabilty to taget beneficiares suitable for ICM, 

inabilty to target patients before hospita adssions, 

difficulty in approaching patients to encourage use of ICM, 

inabilty to document savings. 

Identification of suitable patients for managed care, as early as possible, appears to be the key 

to successful ICM. We examed HCFA BMAD files to determne if Medcar carers had 

identiy patients who might be suitable for ICM based on intensity of medcal the abilty tq 

services. In analyzig the BMAD sample, we found that about one percent of Medicar 

patients receive more than 51 medical servces annually. We believe that the data being 

maintaned by the carers can be used to identify patients receivig a high volume of medical 

services. Two questions must be asked with regar to these patients: 1) Are they suitable 

candidates for ICM? And 2) Is the car they are receiving appropriate? 
The RCF A believes that patient advocate services would be best provided by outside 

organizations. 

In our discussions with HCFA, we outlined the "patient advocate" or "patient hotlne 

approach used by some employers and brokers. May companies use patient hotlines to 

detennine patient interest in ICM, and to dit patients into specialize networks or to 

targete purhasing arangements. The peple we spoke to in HCFA agr that long tenn 

effons are neeed in this area. However, they felt that a patient advocate approach to DR 

might be viewed as "too soft of a service" for Medcar to provide if it were volunta, or 

big brother" interferig in the practice of medcine if it were mandated. The HCFA feels that 

advocate services might be better provide by outside organiztions representig the elderly 

and disabled. 

Issuesfor further stud 

There appear to be suffcient potential for researhing the feasibilty of ICM for Medcar 

and other federa health car program, in light of the special populations these Federal 

progrs serve. What kinds of crteria wil best identiy potential candidates? Who should 

perfonn the review for potential candidates, and how can ths be done most effciently? Who 

should be responsible for maaging the tratment of identified patients? How can appropriate 

patients be encourged to choose the ICM approach? How could a patient advocate function 

within a government program? 

Any ICM progr should: 

emphasize a collaborative approach among patients, physicians and payers; 

use common, wrtten guidelines or protocols; 

include a proedur for resolving honest disagrment over treatment 

alternatives; and, 

gather reliable data for tracking parcipation rates and cost effectiveness of the 

progr. 
CONCLUSION


The intent of this report was to stimulate discussion as to whether any of the approaches used 

in the private setor for controllng mecal costs might be relevant to the public setor. The 

purse was not to endors anyone method or prtice. Befor any such undertg, 

adtional studies ar nee which will provide mor indepth informtion on eah method 

Some of the method use by broker may be mo rey adpte to public seto progr 

than others. The DHHS wi nee to give cafu consideration to the legilative obstales and 

adnistrtive imaints which curntly prvent the trsfer of these private setor cost 

contrl mehanisms to the public sector. The DHH' succss in integrtig these kinds of 

progrs depends on whether the necessar legislative changes can be ma. 

Overal, may private sector mechanisms for contrllng health car costs appear to have 

potenti for Medcar, Medcaid and other DHHS progr includig those adstere 

the Public Health Servce. Eah component should study the mechansms use by the private 

setor to determe whether any ca or shoul be adpte to their prgr. 
, 

 , 

pp. 

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Georgia Physicians Criticize Medcar, Medicine and Health,
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GHAA Study Tracks Patterns of Change in HMOs Employee Benefit News,
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Glenn, Karn J., "Medcal Effectiveness Initiatives, Medicine and Health Perspectives, 

May 22, 1989. 

Greene, Jay, and Mar Wagner, "A Volume of Options in Grup Puchasing, Modern 

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HCFA Hangs Tight to Georgia s Medcal Review Pilot, Part B News,
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Number 7, March 26, 1990, p. 1. 

HMO Enrollees Have 50% Fewer Hospita Days-Study, Modern Healthcare, 

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Hillman, Alan L., M.D., M. A., "Special Report - Financial Incentives fur Physicians in 

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Johnson, Richard E., "Establishing a Successful Approach to Health Plan Cost 

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Kahn, Katherine L., et al., "The Effect of Comorbidity on Appropriateness Ratigs for Two 

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Kahn, Katherine, et al., "Measuring the Clinical Appropriateness of the Use of a 

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Kenkel, Paul, "Cost Management Aims at Workers Compensation Modern Healthcare, 

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Kenkel, Paul J., "Health Prferr of Mid-America, Chicago, Modern Healthcare, 

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Kenkel, Paul J., "Managed-Car Doctors Fees Var-Study, Modern Healthcare, 

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Kenkel, Paul J., "Plans Avoid Managed-Ca Middemen, Modern Healthcare, 

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Kosecoff, Jacqueline, et al., "The Appropriateness of Using a Medcal Procedure, Medical 

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Kosecoff, Jacqueline, et al., "Effects of the National Institutes of Health Consensus 

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Kosterlitz, Julie, "Bottom-Line Pain National Journal,
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Kramon, Glenn, "Four Health Ca Vigilantes, The New York Times, 
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Kramon, Glenn, "Takng a Scalpel to Health Costs, The New York Times, 
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Section ill p. 1. 

Kramon, Glenn, "When Companies Hi Own Doctors, New York Times, 
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Lam, Richard D., "Saving a Few, Sacrficing Many-at Grat Cost, The New York Times, 

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Levit, Katharne R., et al., "Heal Spending and Abilty to Pay: Business, Individuals, and 

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McClure, Walter When You Offer People a Fre Lunch, They Don t Eat at McDonald' 

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McGraw Hill Review Resources Sourcebook of Private Independent UR Companies, 

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Medicare-Approved CABO Centers Narwed to 10, Part B News, 
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Merrck, Nancy L., et al., "Derivation of Clinical Indications for Caotid Endaerectomy by 

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Merrck, Nancy, et al., "Use of Caotid Endaretomy in Five California Veteras 

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Morford, Thomas G., "Fedral Effons to Improve Peer Review Organiztions, Health 

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National Center for Health Services Research and Health Ca Technology Assessment, 

DHHS Secta Sullvan Announces NCHSR Grants Totang $4 Millon for Patient 

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National Center for Health Services Research and Health Ca Technology Assessment, 

DNR Order Differences Found for Patients with Comparble Prgnoses, Diferent 

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National Center for Health Servces and Health Ca Technology Assessment, "Utization 

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Offce of Technology Assessment, "Physician Payment Under the Medcare Prgram: 

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Park, Rolla Edwar, et al., "Physician Ratings of Appropriate Indications for Six Medcal 

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PPOs: Insurers, Employers Get More Involved, Medicine and Health Perspectives, 

December 5, 1988. 

PROs Ease Pradmssion Review for Eveninglight Surgeries," Part B News,
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Number 9, Apri 23, 1990, pp. 3-4. 

Review Resources: Directory of a Newly Matue Industr," Utilzation Review. 

Rice, Thomas, et al., "The State of PPOs: Results from A National Surey," Health Affairs, 

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Robichaux, Mark, "Soarng Health-Car Costs Spur Entrpreneural Fever," The Wall Street 

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Roper, Willam L., M.D., "Perspetives on Physician Payment Refonn," New England 

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Rosko, Michael D., "A Comparson of Hospita Perfonnance under the Panal-Payer 

Medcare PPS and State All-Payer Rate-Settng Systems," Inquiry, Sprig 1989, pp. 

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Ruffenach, Glenn, "Denials of Medcal Claims Prvoke a Legal Backlash, The Wall Street 

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Rundle, Rhonda, "Hospitas Groups Try to Pull Off Cost Watchdogs," The Wall Street 

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Scanlon, Jack, and Neil Austin, "Bringig HMOs in Line with Cost Management Goals," 

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Schiffman, James R., "PPO Addess Overuse of Varous Procedurs, The Wall Stree 

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Schiffman, James R., "Testing a Plan, Medicare Pains Georga Doctors, The Wall Street 

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Severity-of -llness," Part B News, p. 6. 

Shalowitz, Debora, "Companies Adjusting Health Benefits: GAO," Business Insurance, 

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Shellenbarger, Sue, "As HMO Prmiums Soar, Employers Sour On the Plans and Check 

Out Alternatives, The Wall Street Journal, 
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Sisk, Faye A., Ph.D., "Lab Work for HMOs: Negotiating for Prfit, Avoiding Traps,"

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Swobo, Fra, "Managing to Rein In the Expense of Health Cae," The Washington Post, 

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Tokarski, Cathy, "Utilization Review Not Turing Up Much Long-Tenn Gain," Modern 

Healthcare, December 29, 1989, p. 30.

Traska, Mara R., "Medicaid HMOs: Endangered Species," Medicine and Health 

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S. Deparment of Health and Human Services, Offce of Inspector Genera, Offce of 

Evaluation and Inspections, 
 Beneficiary Satisfaction with Georgia s Medicare Carrier,

OEI-04-90-01050, Februar 1990. 
, 

Vibbert, Spencer, "Is Utilization Review Paying Off" Business and Health, Februar 1989, 

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Wendling, Wayne, and Jack Scanlon, "Seeking Cost Controls with Health Car Data, 

Business and Health, 
 May 1988, pp. 34-37. 

Whitmore, Julie, "Despite Minor Downtur, Moo Reviewer s Signs Goo, Crain Chicago Business, 
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Wiener, Janet Ochs, "Effectiveness: Another Name for Cost Control?" Medicine and 

Health Perspectives, 
 October 9, 1989. 

Winslow, Constace Monr, et al., "The Appropriateness of Perfonnng Coronar Anery 

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Winslow, Ron Hospitals Rush to Transplant Organs - Bid for Prestige Triggers Debate on 

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Winslow, Ron, "Pentagon Sets Up a Pilot To Conquer High Costs, The Wall Street 

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Winslow, Ron, "Rationing Cae, The Wall Street Journal,
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Artur Young & Co., "CAPP Cae in Medcar Demonstration Project, PPO Postscript, 

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