United States General Accounting Office

GAO Report to the Chairman, Subcommittee

on Health, Committee on Ways and

Means, House of Representatives

May 1996 PRACTICE

GUIDELINES

Managed Care Plans

Customize Guidelines

to Meet Local Interests

G O A

years

1921 - 1996

GAO/HEHS-96-95

GAO United States

General Accounting Office

Washington, D.C. 20548

Health, Education, and

Human Services Division

B-265993 

May 30, 1996

The Honorable William M. Thomas

Chairman, Subcommittee on Health

Committee on Ways and Means

House of Representatives

Dear Mr. Chairman:

Inappropriate use of medical services can be costly and raise quality of

care concerns. For example, a 1988 study found that 14 percent of bypass

surgeries were performed inappropriately. To narrow the gap between

current and optimal practice, some federal agencies and other

organizations develop clinical practice guidelines on the best practices for

effective and appropriate care.

Although much has been written about the process of guideline

development, little is known about how practice guidelines are used.

Because managed care plans, which employ various techniques intended

to reduce inappropriate care, are likely sites of guideline use, you asked us

to examine (1) what purposes clinical practice guidelines serve and

(2) how health plans make use of already published guidelines developed

by federal agencies and other organizations.

To develop this information, we interviewed the medical directors at 19

individual managed care plans. We used a judgmental sample to select

plans that varied in total enrollment, geographic region, and organizational

characteristics. The combined enrollment of the 19 health plans we

contacted was about 7 million members, with individual plan membership

ranging from 5,100 to 2.2 million members. The plans are located in

California, Florida, Illinois, Maryland, Massachusetts, Minnesota, Virginia,

and Washington. The health plans represent different types of health

maintenance organizations, including staff and group, independent

practice association, and network or a mix of models. We also contacted

two corporate health plan chains. Because this was not a representative

sample of managed care organizations, our results cannot be generalized

to the entire managed care community. (See the appendix for a list of

managed care plans we contacted.)

We also reviewed the professional literature on clinical practice

guidelines, including user surveys sponsored by public and private

organizations. In addition, we consulted with representatives from medical

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B-265993 

specialty societies, condition-specific organizations, the Agency for Health

Care Policy and Research (AHCPR) of the Public Health Service, and

national quality of care experts on issues relating to guidelines. We

conducted our review from July 1995 to March 1996 in accordance with

generally accepted government auditing standards.

Results in Brief At the managed care plans we reviewed, guidelines served as a tool to help

the plans manage physician practice. In selecting aspects of physician

practices that could be improved through the use of guidelines, plans

identified “problem areas”—that is, those services or conditions that are

high cost, high medical liability risk, and high incidence for their patient

population. Plans also identified conditions for which practices varied

widely among their network physicians. Guidelines selected using these

criteria may help plans moderate expenditures and improve their

performance across key quality measures in comparison with other plans.

Health plans cited their reliance on federal and other published guidelines

as references for producing their own guidelines. However, most plans did

not adopt published guidelines—whether federal or from other

sources—“as is” but modified them for a variety of reasons. Because

published guidelines lacked local clinical input, nearly all plans involved

their network physicians in the process of adapting guidelines. Plans also

customized guidelines to meet other organizational needs. First, guidelines

may not always recommend the most cost-effective therapeutic

approaches. Second, some published guidelines were tailored to fit local

resource constraints. Third, guideline recommendations may not always

apply to the demographic characteristics of the plan’s enrolled population.

Fourth, some published guidelines were too long or included graphics and

algorithms that were too complex to be useful to busy physicians. Finally,

guidelines may need to be updated to reflect the most current information.

For these reasons, plans assert that local adaptation of published

guidelines is largely inevitable and may be useful. As a result, some plans

changed the guidelines’ presentation, whereas others customized aspects

of the recommended treatment. Some experts point out that certain

modifications may compromise the integrity of the guidelines and

undermine intended improvement in how specific conditions are managed.

Plan managers we contacted commended federal agencies for issuing

guidelines. However, they cited concerns about the usefulness of multiple

guidelines on the same topic that contain conflicting recommendations.

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They also stressed the need for more assessments of medical technologies’

impact on patient outcomes. They suggested that the federal government

assume a greater role in funding outcomes research and providing

summaries and evaluations of scientific evidence to support local plan

guideline development.

Background The Institute of Medicine, chartered by the National Academy of Sciences,

has defined practice guidelines as systematically developed statements

that assist practitioners in making decisions about appropriate health care

for specific clinical conditions. For example, guidelines are available on

such topics as the length of hospital stay for maternity care, the need for

back surgery, and the management of pediatric asthma. Guidelines are

intended to help physicians and others by crystallizing the research in

medical literature, evaluating the evidence, applying the collective

judgment of experts, and making the information available in a usable

form. They are more often written as acceptable therapy options than as

standardized practices that dictate specific treatments. Unlike standards

of care that have few accepted variations in appropriateness, most

guidelines are expected to have some variations because improved

outcomes are not necessarily linked by definitive scientific evidence.

Where there is a lack of scientific evidence, some organizations make

recommendations that reflect expert opinion, while others recommend

tests or procedures only when convincing scientific evidence of benefit

exists.

Many public and private organizations have been developing guidelines for

decades. About 75 organizations have developed over 2,000 guidelines to

date.1

 The federal government supports the development of clinical

practice guidelines through AHCPR,

2

 the National Institutes of Health (NIH),

the Centers for Disease Control and Prevention, and the U.S. Preventive

Services Task Force (USPSTF).3

 Private guideline efforts have been

undertaken by physician organizations, such as the American Medical

Association; medical specialty societies, such as the American College of

Cardiology; private research organizations, such as RAND Corporation;

and private associations, such as the American Heart Association.

Guidelines are also developed commercially by private companies, such as

1

For a compendium of available guideline titles, see American Medical Association, Directory of

Practice Parameters (Chicago: American Medical Association, 1996).

2

This issue was discussed in Practice Guidelines: Overview of Agency for Health Care Policy and

Research Efforts, (GAO/T-HEHS-95-221, July 1995).

3

USPSTF merged with AHCPR in December 1995.

Page 3 GAO/HEHS-96-95 Practice Guidelines
B-265993 

Milliman and Robertson and Value Health Sciences, which market them to

health care organizations.

Given the multiplicity of sources for guideline development, it is not

uncommon for more than one guideline to exist for the same medical

condition or for recommendations to vary. For example, at least four

organizations have issued a guideline on prostate cancer screening. In

addition, guidelines tend to reflect the specialty orientation of the

guideline developers. In the case of the prostate screening guideline, for

example, the American Urological Association, the American College of

Radiology, and the American Cancer Society recommend using a

prostate-specific antigen test for all eligible patients aged 50 and older,

whereas the USPSTF recommends against the routine use of this test.

Recent national surveys indicate that a majority of managed care plans

have adopted guidelines and made them available to providers. For

example, a 1994 survey sponsored by the Physician Payment Review

Commission found that 63 percent of managed care plans reported using

formal written practice guidelines.4

 The results also showed that the use of

guidelines was least common among less structured managed care plans

because of their more limited ability to influence physicians’ practice.

Specifically, 76 percent of the responding health maintenance

organizations reported using practice guidelines, compared with

28 percent of preferred provider organizations.

Controlling Costs and

Improving

Performance Are

Leading Influences in

Guideline Adoption

Health plans we reviewed had three strong motives for adopting

guidelines: pressure to moderate expenditures, to show a high

performance level across key quality indicators when compared with other

plans, and to comply with accreditation and regulatory requirements.

These plans view practice guidelines as tools to achieve these ends by

promoting greater uniformity within their own physician networks and by

helping physicians increase their efficiency, improve clinical

decision-making, and eliminate inappropriate procedures.

In selecting aspects of physician practices that could be improved through

the use of guidelines, most plans we spoke with identified those services

4

The Physician Payment Review Commission is charged with advising and making recommendations

to the Congress on methods to reform payment to physicians under the Medicare program. The survey

was conducted for the Commission in 1994 by Mathematica Policy Research and the Medical College

of Virginia. The survey of 108 health care plans included 29 group and staff models, 50 network and

independent practice associations, and 29 preferred provider organizations. See Physician Payment

Review Commission, Arrangements Between Managed Care Plans and Physicians: Results from a 1994

Survey of Managed Care Plans (Washington, D.C.: Physician Payment Review Commission, 1995).

Page 4 GAO/HEHS-96-95 Practice Guidelines
B-265993 

or conditions that are high cost, high medical liability risk, and high

incidence for their patient population. They reviewed the provision of such

services as hospital inpatient, pharmacy, and ambulatory care—as well as

variations in utilization across physicians—to identify such conditions. For

example, one plan identified pediatric asthma as a condition for guideline

adoption because it is among the most frequent causes of hospital

admission and repeat emergency department visits. Human

immunodeficiency virus (HIV) infection and high cholesterol are also

among the plan’s top 10 topics for guideline selection.

Controlling Costs Several plans we contacted reported cost savings from implementing

guidelines that specify the appropriate use of expensive services. In one

case, a plan adopted a guideline for treating stroke patients that

recommended physical therapy early in the patient’s hospital stay. This

practice resulted in shortened stays as well as improved outcomes.

Another plan adopted a guideline on non-insulin-dependent diabetes to

help physicians identify when to provide intensive management rather

than routine care to patients with this low-cost condition that can lead to

high-cost complications. Another plan used a low back pain guideline that

generated savings from the selective use of high-cost diagnostic imaging

services.

Plans have also reported cost savings from implementing guidelines that

reduce the incidence of acute conditions and the need for more expensive

care. One managed care chain we contacted increased the percentage of

Medicare enrollees receiving flu shots from 27 to 55 percent in 1 year. The

chain reported a reduction of about 30 percent in hospital admissions for

pneumonia, savings of about $700,000, and fewer lives lost.

Improving Performance Practice guidelines were also heavily used by plans that were being

evaluated by employers buying health care for their workforce.

Standardized measures for assessing health plan performance are set forth

in the Health Plan Employer Data and Information Set (HEDIS), which many

employers and other payers view as a report card.5

 Purchasers can use

HEDIS to compare plans across several preventive services measures,

including childhood immunizations, cholesterol screening, breast cancer

screening, cervical cancer screening, prenatal care in the first trimester,

5

HEDIS sets specifications for health plans to collect data on 63 indicators that describe performance

in five areas: quality, patient access and satisfaction, membership and utilization, finance, and health

plan management. HEDIS was developed in 1993 by a committee of health plan representatives and

corporate purchasers under the auspices of the National Committee on Quality Assurance.

Page 5 GAO/HEHS-96-95 Practice Guidelines
B-265993 

diabetic retinal examination, and ambulatory follow-up after

hospitalization for depression. Of the 19 plans we contacted, 14 collected

performance data using HEDIS measures.6

The adoption of practice guidelines may help plans improve their

performance on HEDIS measures. For example, through the use of pediatric

and adult preventive care guidelines, one plan claimed that it raised to

95 percent the number of its physicians meeting appropriate childhood

immunization schedules and to 75 percent the number of its physicians

meeting mammography screening goals. The plans also reported reducing

the percent of breast cancers identified at advanced stages from 30 to

10 percent.

Complying With

Accreditation and

Regulatory Requirements

In addition, plans’ adoption of guidelines is encouraged indirectly through

health plan accrediting organizations. Although plans are generally not

required to be accredited, many seek a review to satisfy purchasers’

demands and enhance their marketability. The National Committee on

Quality Assurance’s (NCQA) accreditation standards require that plans have

guidelines for the use of preventive health services.7

 The Joint

Commission on Accreditation of Healthcare Organizations also has

standards that encourage the use of practice guidelines, but not specific

guidelines.

States are also influencing plans’ guideline use. For individuals covered

under workers’ compensation, for example, Florida specifies guidance on

the use of diagnostic imaging to treat low back pain. As states increasingly

require plans to meet certain treatment standards, plans are likely to adopt

guidelines that will help them comply with these requirements.

6

In addition, plans are likely to adopt guidelines that they believe will help them perform better when

measured by Medicaid HEDIS, which is tailored to the special needs of the Medicaid population.

Medicaid HEDIS allows states to monitor plan performance on a number of additional preventive care

services, such as well-child visits, substance abuse counseling, blood screening for diabetes, and

post-partum visits.

7

The standards further specify that these guidelines must be based on reasonable medical evidence, be

developed or adopted with the participation of the plan’s providers, be periodically reviewed for

updating, and apply to the full spectrum of the enrolled population.

Page 6 GAO/HEHS-96-95 Practice Guidelines
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Plans Customize

Federal and Other

Published Guidelines

for Local Applicability

Few of the plans we visited had the resources to devote to developing an

original guideline, since such an effort can be time consuming and

expensive. They preferred instead to customize guidelines that had already

been published to ensure local physician involvement and acceptance of

the guidelines and to accommodate their individual plan objectives.

In general, health plans customized guidelines by modifying their scope or

recommendations or emphasizing one of several therapy options

presented.8

 Because adapted guidelines differ from original guidelines to

varying degrees, some experts in the guideline development community

caution that certain modifications, when made to accommodate local

self-interests at the expense of patients, may compromise the integrity of

the guideline.

Some of the plans we visited also expressed a need for more medical

technology assessments and outcomes data; however, they lack the

resources to assume these activities. They suggested that the federal

government enhance its role in these areas.

Physician Input Necessary

for Guideline Acceptance

Among the most important reasons for not adopting published guidelines

strictly as written is the need for local physician involvement and

acceptance. Plan managers we interviewed noted that published

guidelines usually lack the input of their local physician community. They

recognized that some plan physicians are reluctant to put aside their own

practice patterns in favor of those recommended by outside sources,

particularly when guidelines are based more on expert opinion than on

conclusive scientific evidence. Physicians have confidence in guidelines

that they or their peers take part in developing or that are developed by

their professional organization.9

 Therefore, guidelines adopted by a

consensus of local physicians are more likely to be accepted.

In one plan manager’s view, without the physicians’ participation in

approving the final product, physicians would not be likely to follow the

guideline. In citing the need for physician acceptance of guidelines, one

plan manager put it this way: “The practice of medicine is parochial.”

Similarly, one large plan’s medical policy specialist told us that published

8

If such adaptations have the effect of reducing competition, antitrust issues may arise. See Antitrust

Issues Relating to Physicians and Third-Party Payers (GAO/HRD-91-120, July 10, 1991).

9

To obtain a more “home grown” product, some plans relied on private regional organizations, such as

the Unified Medical Group Association in the western states or the Institute for Clinical Systems

Integration in Minnesota, that are governed by physicians drawn from medical groups affiliated with

local plans.

Page 7 GAO/HEHS-96-95 Practice Guidelines
B-265993 

guidelines need to be modified because they are often not consistent with

local standards of care—that they are not “in synch” with how plan

physicians are practicing. This position was corroborated by the American

Medical Association’s Director of Practice Parameters, who said “a

guideline can be developed at the national level, but it has to be

localized . . .. [I]t comes down to local areas developing the

recommendations that suit them.”

Plans selected practice guidelines from a variety of sources, including

federal agencies and medical specialty societies, such as the American

College of Physicians. Among the health plans we contacted, few had

documentation on the methods they used to adapt guidelines. However,

some described their approach as typically including some combination of

physician consensus10 and a review of outcomes of clinical studies. When

there was controversy or lack of strong clinical evidence, plans reported

making greater use of local physician opinion and often performed

independent literature reviews to provide additional information. This was

particularly likely with a guideline on a rapidly changing treatment

method, such as treatment for heart attacks, since clinical developments

may overtake the publication of existing guidelines.

Customization Also Driven

by Local Organizational

Constraints

Plans have a number of other reasons for customizing clinical practice

guidelines. These issues include cost considerations, resource constraints,

demographic characteristics of enrolled population, simplicity of guideline

presentation, and the need to update information contained in published

guidelines.

Cost-Effectiveness Concerns Plans we visited noted that clinical practice guidelines often fail to provide

needed information on what is cost-effective care. In its 1992 report, the

Institute of Medicine recommended that a clinical practice guideline

include information on both the health and cost implications of alternative

treatment strategies.11 However, many guidelines produced by federal and

private entities do not routinely include cost-effectiveness analysis in the

10Some plans we contacted said they involved both primary care and specialty physicians, and others

said they included nurses and allied health professionals.

11Institute of Medicine, Guidelines for Clinical Practice: From Development to Use (Washington, D.C.:

National Academy Press, 1992).

Page 8 GAO/HEHS-96-95 Practice Guidelines
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recommendation-making process, often because the information needed

to conduct cost analysis is not available.12

Plans we visited often consider the costs of alternative treatments in

deciding how to implement a guideline. In some instances, a guideline may

allow choices among equally effective therapeutic options. This was the

case with AHCPR’s guideline on the treatment of depression in primary care

settings, which stated: “No one antidepressant medication is clearly more

effective than another. No single medication results in remission for all

patients.” Instead, the guideline listed several types of drugs that were

considered equivalent in clinical effectiveness. In implementing this

guideline, one plan we contacted chose the least expensive class of drugs

from AHCPR’s recommended list as its first-line treatment. The plan also

noted that the selected drugs were older and their side effects were better

known to its physicians.

Some plans we visited also noted that guidelines may not recommend the

most cost-effective health care. For example, some plans adapted a

published guideline on total hip replacement that recommended that

patients be admitted to the hospital the night before their surgery. The

plans changed the recommendation so that patients were admitted the

morning of their surgery, even though most of these patients were elderly

and lived far from the hospital. One guideline expert argued that this was

done to lower the cost of care with little regard for the inconvenience to or

impact on the patient.

Available Resources Local customizing is also influenced by the amount and type of health care

resources available to the plan. For example, the USPSTF’s colorectal

cancer screening guideline recommends a periodic sigmoidoscopy or an

annual fecal occult blood test or both. Plans with a sufficient number of

physicians who are trained to perform sigmoidoscopies are more likely to

choose the recommendation of screening with a periodic sigmoid test and

may also perform the fecal occult blood test. However, those without

enough trained physicians may decide to select only the fecal occult blood

test.

Local Population Needs Some plans noted that guidelines may need to be tailored to allow for

population differences in each locality. They cited research showing that

differences in patients’ health need to be taken into account since

socioeconomically different populations may have different incidence and

12USPSTF does not typically include cost as a criterion for their recommendations regarding

appropriateness. According to AHCPR officials, when its guideline panels can obtain sufficient

information, cost-effectiveness analyses are performed.

Page 9 GAO/HEHS-96-95 Practice Guidelines
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prevalence rates of the disease. In particular, the research showed that

Native American women required more frequent mammography screening

due to their above-average incidence of breast cancer.13

Plans may also decide to recommend a wider application of diabetes

screening services when their members are identified as having higher risk

factors. The USPSTF guideline on diabetes states that there is insufficient

evidence that routine screening is necessary. However, members of

certain ethnic groups (Hispanics, African-Americans, Native Americans)

are among those likely to benefit from screening tests. Therefore, plans

may need to adapt guidelines to serve the needs of their more vulnerable

populations.

Format Issues Plans also cited the need to customize to make the information in a

guideline available in a more usable form. Guideline documents vary in

length, from a three-page brochure to a two-volume manual. Some

guidelines consist largely of decision-tree charts, called clinical

algorithms, while others are predominantly text, providing a synthesis of

scientific evidence, expert consensus, and references to specific research

studies.

Sometimes published guidelines are broad in scope and cover not only a

full range of medical practices—including diagnosis, treatment, and

follow-up care—but also the guideline development methodology and

areas for future research. The comprehensiveness of such guidelines,

designed to reach the broadest audience of practitioners as well as clinical

researchers, may require a book-length presentation. Therefore, plans

typically adapted such guidelines to focus on a narrower set of clinical

needs, such as the pharmacological management of patients with heart

failure. Several plans pointed to AHCPR’s 327-page guideline on primary

care physicians’ treatment of depression as being too long and

complicated for busy clinicians. One plan reduced it to 44 pages,14 another

to 20 pages, and a third to 4 pages. (AHCPR has issued a shorter

quick-reference version of this guideline, as it does with all its guidelines.)

Format may also be an issue with practice guidelines developed by health

plans. A prominent expert on guideline development noted that a

mathematically based cholesterol screening guideline could not be

13See P. Nutting, “The Danger of Applying Uniform Clinical Policies Across Populations: The Case of

Breast Cancer in American Indians,” American Journal of Public Health, Vol. 84, No. 10, (1994), pp.

1631-36.

14This plan’s adapted depression guideline also contained plan-specific referral information, including

phone numbers for specialists and information on sites for care.

Page 10 GAO/HEHS-96-95 Practice Guidelines
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implemented because the plan’s primary care physicians did not have time

to follow the complicated guideline model.

Dated Material Sometimes the information in existing guidelines is not current. Medical

information and technology, such as pharmacological management of a

condition, is continually evolving. Yet, published guidelines may not be

reviewed and revised on a timely basis. For example, NIH guidelines, called

consensus statements, are not reviewed for at least 5 years after issuance.

In fact, only about half of the plans we contacted reviewed and updated

their guidelines annually. However, one plan published guidelines with an

expiration date, forcing the plan to review the guidelines at least once

annually.

Local Customization of

Guidelines Can Lead to a

Range of Variation

The extent of modifications that resulted from plans’ customizing

published guidelines varied from minimal to substantial. Sometimes the

differences between the local and published guidelines were cosmetic. For

example, some individual medical groups prepared shortened versions of

regionally developed guidelines on plastic cards for quick physician

referral. They also removed the original source’s name and applied their

logo to the documents to further enhance physicians’ sense of ownership.

Other modifications were more than superficial. One plan customized

AHCPR’s HIV guideline by adding drug treatments that were not covered in

the original guideline, specifying when primary care physicians should

refer patients to a specialist, and providing information on state reporting

requirements.

Finally, some changes could be considered substantial. For example, one

plan we contacted relaxed the recent chicken pox vaccination guideline

from the American Academy of Pediatrics. The Academy recommended

that chicken pox vaccinations be given to all healthy children. The plan

adapted the guideline by recommending that its physicians discuss the

extent of immunity that the vaccine could confer and let parents decide

whether they want the vaccine given to their children. The plan

maintained that, because the immunity offered by the vaccine might not

last a lifetime, it could result in more adult cases of chicken pox, an

outcome that could result in serious harm or death. The plan held that it is

better for children to contract chicken pox to ensure lifetime immunity

than to get the vaccine. An Academy spokesperson commented that no

significant loss of immunity has been demonstrated in healthy children

who were vaccinated.

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At another plan, we found that a customized guideline recommended

treatments specifically not endorsed by AHCPR. In its low back pain

guideline, the plan recommended that physicians perform an invasive

treatment to control pain and an invasive test to diagnose the extent of

disc damage. However, AHCPR’s guideline stated that the benefits of this

treatment and test were unclear and not worth the potential risk of

infection to patients. A plan representative told us that their guideline was

adapted to address the concerns of the plan’s orthopedists, who felt that

the invasive treatment and test should have been included in the original

guideline.

The Institute of Medicine cautions that adaptations can be done locally for

improper reasons, such as to perpetuate insupportable local practices or

to further economic self-interest. According to an Institute official,

“. . . to the extent that local adaptation, broadly defined, moves in the direction of excluding

certain types of practitioners . . . or of weakening a guideline document fundamentally by

allowing for the provision of marginally beneficial services in situations in which guidelines

would probably say ‘this is inappropriate for this class of people’ —then you have what

looks to me like a self-serving change.”15

Some practice guideline experts we contacted agree and warn that

adaptations may compromise the integrity of published guidelines.

According to one guideline authority,

“ . . . guidelines that recommend the best care practices to optimize outcomes for patients

may not necessarily be cost-effective or easy for MCOs [managed care organizations] to

implement. MCOs, with a commitment to the bottom line, may make modifications to

guidelines to achieve their best interests and not those of patients.”

Plans Suggest a New Focus

for Federal Guideline

Efforts

Most plan managers we contacted applaud the various guidelines

published by public and private entities. The availability of such guidelines

makes plans’ guideline development efforts easier and less costly. Plans

consider published guidelines to be useful summaries of the literature and

science, written for a diverse audience.

However, given the multiplicity of guideline sources, many plan managers

told us they would prefer to see some federal agencies assume an

alternative role in the guideline movement. Plans noted that having many

15Paul M. Schyre, “Reasonable Expectations: From the Institute of Medicine,” interview with Kathleen

N. Lohr, Quality Review Bulletin of the Journal of Quality Improvement, Vol. 18, No. 12 (1990), pp.

393-96.

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federal and private-sector guidelines on the same topic is an inefficient use

of limited resources. Furthermore, some of these guideline

recommendations conflict, creating confusion for plan managers and

practitioners. Plan managers also told us that their needs for medical

technology assessments and outcomes data remain unmet.

Some plan officials suggested that some federal agencies would provide a

more useful service to managed care plans by not continuing to produce

guidelines. Instead, they should publish and update summaries and

evaluations of evidence on medical conditions and services so that plans

could use this information to develop and update their own guideline

recommendations. Other plans proposed that the federal government

increase funding to develop useful practice guideline tools, such as

methods to incorporate cost assessments and patient preferences into

practice guidelines. Furthermore, several plans asserted that federal

guideline funds should be used for outcomes research and technology

assessment from which plans could develop their own guidelines. One

plan manager said, “This is an area that health plans do not have the

resources or expertise to adequately address.”

Concluding

Observation

Managed care plans’ growing interest in practice guidelines is driven by

their need to control medical costs, ensure consistency of medical care,

and demonstrate improved levels of performance. By using practice

guidelines, plans are making a conscious decision about the care they

intend to provide, reflecting the trade-off between costs and benefits.

When published guidelines differ from a plan’s clinical and financial

objectives, they are typically customized with the active participation of

the network physicians. Since published guidelines can be inconsistent,

outdated, or too complex, local adaptation may be useful. Yet some

changes may compromise the quality of patient care. Moreover, local

adaptation may undermine the goal of clinical practice guidelines, which is

to make medical care more reliant on evidence-based recommended

practices and less a function of where a patient receives care.

Comments and Our

Evaluation

Comments on a draft of this report were obtained from the American

Association of Health Plans, AHCPR, and two experts on guideline

development and use. The American Association of Health Plans generally

agreed with the draft, but suggested language changes where the report

addressed the goal of reducing cost. They stated that practice guidelines

Page 13 GAO/HEHS-96-95 Practice Guidelines
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are intended primarily to improve the quality and outcomes of care and

secondarily to contain costs. We agree that plans use guidelines for quality

improvement as well as cost management. AHCPR noted that managed care

plans’ views on the federal role of guideline activities were similar to the

agency’s views and its plans for the future. The agency also provided

technical comments, and we have incorporated its suggested changes and

those of the expert reviewers as appropriate.

As arranged with your office, unless you publicly announce its contents

earlier, we plan no further distribution of this report until 30 days after its

issue date. At that time, we will send copies to interested parties and make

copies available to others on request.

Please call me at (202) 512-7119 if you or your staff have any questions.

Other major contributors include Rosamond Katz, Donna Bulvin, Mary

Ann Curran, Hannah Fein, and Jenny Grover.

Sincerely yours,

Sarah F. Jaggar

Director, Health Financing

 and Public Health Issues

Page 14 GAO/HEHS-96-95 Practice Guidelines
Page 15 GAO/HEHS-96-95 Practice Guidelines
Appendix 

Managed Care Plans Contacted During

Review

Name Location HMO model type(s)

Enrollment

(as of 1995) Tax status

Individual managed care plans

Allina Health Plan Minneapolis, Minn. IPAa 542,000 Nonprofit

CAC-United HealthCare Plan Coral Gables, Fla. IPA; staff; network 204,000 For profit

California Care Woodland Hills, Calif. Network 725,000 For profit

Care America Woodland Hills, Calif. IPA 216,000 For profit

CIGNA Health Care of Virginiab Virginia Beach, Va. IPA 38,000 For profit

CIGNA Mid-Atlantic Columbia, Md. IPA 110,000 For profit

George Washington University

Health Plan, Inc.

Bethesda, Md. IPA; staff; group

73,000

Nonprofit

Group Health Cooperative of Puget

Sound

Seattle, Wash. Staff; network

510,000

Nonprofit

Harvard Community Health Plan Wellesley, Mass. Staff; group 479,000 Nonprofit

Health Partners Minneapolis, Minn. Staff; group; network 471,000 Nonprofit

HMO Illinois Chicago, Ill. IPA; network 383,000 Nonprofit

Kaiser Mid-Atlantic Rockville, Md. Group 342,000 Nonprofit

Kaiser Southern California Pasadena, Calif. Group 2,200,000 Nonprofit

M.D.-IPA Rockville, Md. IPA 423,000 For profit

Optima Health Plan Virginia Beach, Va. IPA 72,000 Nonprofit

PacifiCare Mercer Island, Wash. Group 56,000 For profit

Potomac Health Baltimore, Md. Network 5,100 For profit

Prudential Health Care Plan, Inc. Fort Lauderdale, Fla. IPA 65,000 For profit

Prudential Health Care Plan, Inc. Jacksonville, Fla. IPA 65,000 For profit

Corporate health plan chains

Aetna Health Plans Hartford, Conn. IPA; network 1,100,000 For profit

Humana, Inc. Louisville, Ky. IPA; network; staff 1,600,000 For profit

aIndependent practice association.

bConsolidated with CIGNA Healthcare of Richmond, Va.

(108243) Page 16 GAO/HEHS-96-95 Practice Guidelines
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