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1 October 1995 | Volume 123 Issue 7 | Pages 500-504
Objective: To describe the structure and range of utilization management methods initiated by physicians in response to capitation.
Design: Cross-sectional questionnaire.
Setting: A large network-model health maintenance organization (133 contracting physician groups) in California.
Participants: 94 (71%) physician groups caring for 2.9 million capitated patients.
Measurements: Self-reported use of five major utilization management methods.
Results: All physician groups reported using gatekeeping and preauthorization for certain referrals or tests. Most also used profiling of utilization patterns (79%), guidelines (70%), and managed care education (69%). Most physician groups asked gatekeepers to submit preauthorization requests for specialty referrals and restricted patient self-referral. For example, 60% of groups required preauthorization for an internal medicine subspecialty referral, and 7% allowed patient self-referral. Most groups also asked gatekeepers to obtain preauthorization for many tests (for example, 95% for magnetic resonance imaging and 53% for pulmonary function tests). Preauthorization requests were denied infrequently (< 10% of the time) by more than 75% of groups. Of the 54 groups reporting utilization profiles to their physicians, 61% never adjusted for case-mix among patients and more than 60% suggested practice changes to their physicians based on utilization. Fewer than 35% of the groups used written guidelines for expensive tests that required preauthorization (such as angiography).
Conclusions: Physicians are responding to capitation by using utilization management techniques, some at early stages of development, that were previously used only by insurers. This physician-initiated management approach represents a fundamental transformation in the practice of medicine.
Author and Article Information
From the University of California, Los Angeles, School of Medicine and School of Public Health, Los Angeles, California; RAND, Santa Monica, California; and the Veterans Affairs Medical Center, Sepulveda, California.
ARTICLE
Managed Care and Capitation in California: How Do Physicians at Financial Risk Control Their Own Utilization?
Disclaimer: The opinions expressed are those of the authors and do not necessarily reflect those of their institutional affiliations or the funding agencies.
Acknowledgments: The authors thank the study's advisory panel members for their active involvement: Andrew Adams, MD, Richard Greenspun, MD, Jack Hagadorn, MD, George Hiester, MD, Bernard Katz, MD, Linda Lyons, MD, G. Michael Riewe, MD, MPH, and Richard Smith, MD; Marlene Nishimoto for administrative support; and Elizabeth Manios and Josephine Chen for research assistance.
Grant Support: By the Robert Wood Johnson Foundation, the Henry J. Kaiser Family Foundation (grant 93-1768), and RAND (Santa Monica, California).
Requests for Reprints: Eve A. Kerr, MD, MPH, Department of Medicine, University of California, Los Angeles, School of Medicine, B-252 Louis Factor Building, 10833 Le Conte Avenue, Los Angeles, CA 90095-1736.
Current Author Addresses: Dr. Kerr: Department of Medicine, University of California, Los Angeles, School of Medicine, B-252 Louis Factor Building, 10833 Le Conte Avenue, Los Angeles, CA 90095-1736.
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