Specialist Physicians Back in the Driver's Seat as Managed Care Retreats

Fear of Hurting Bottom Line Eases as Specialists Regain Clinical Autonomy

News Release
Jan. 15, 2003

Alwyn Cassil: (202) 264-3484

ASHINGTON, D.C.—As managed care plans eased restrictions in the late 1990s, the proportion of specialist physicians who believe they have enough control over clinical decisions to meet patients’ needs jumped sharply between 1997 and 2001, increasing 13 percentage points from 72.7 percent to 85.7 percent, according to a national tracking study released today by HSC.

The study, based on a ongoing national survey of 12,000 practicing physicians, also found big increases in the proportion of specialists who believe they can make clinical decisions in the best interest of patients without reducing their incomes and maintain continuing relationships with patients to promote high-quality care. In contrast, the study found primary care physicians’ views on these issues changed little between 1997 and 2001.

"The increase in specialists’ clinical autonomy is a double-edged sword. We want physicians to be able to do what they think is best for their patients, but we also want them to be more cost-conscious about the care they provide," said Paul B. Ginsburg, Ph.D., president of HSC, a nonpartisan policy research organization funded exclusively by The Robert Wood Johnson Foundation.

"The retreat from tight limitations on specialty care and expensive tests is a piece of the puzzle of today’s rapidly rising health care costs, and as consumers are asked to shoulder more costs, they may be less willing or able to pay the price for specialists’ greater autonomy," Ginsburg said.

In the early and mid-1990s, managed care plans—in response to employers’ requests to slow rapidly rising health care costs—placed a variety of restrictions on physicians’ decision-making authority, including requiring patients to go through primary care "gatekeepers" for specialty referrals. Many managed care plans also limited patients’ choice of physicians and hospitals and required prior approval for certain high-cost services. Both consumers and physicians disliked these restrictions, prompting a powerful backlash against managed care.

Responding to regulatory and market pressures, many health plans now offer broader provider networks and have eased restrictions on care by eliminating prior approvals for specialty referrals and certain tests and procedures. With fewer administrative controls on the use of medical services and less ability to negotiate discounted fees through selective provider contracting, health plans’ retreat from tightly managed care has contributed to higher health spending and insurance costs. Faced with double-digit insurance premium increases, many employers are passing on higher costs to workers through increased premium contributions, deductibles and copayments.

"Clinical autonomy is a core professional value for physicians—they don’t like being second-guessed. Striking a balance between encouraging physicians to be more cost-conscious without threatening their clinical autonomy is a tough proposition for health plans," said HSC Senior Researcher J. Lee Hargraves, Ph.D., who co-authored the study with HSC Senior Physician Researcher Hoangmai H. Pham, M.D.

Unlike specialists, primary care physicians’ views about clinical autonomy and continuity of care remained almost flat between 1997 and 2001. One explanation may be the sharper decline in the use of capitation—where health plans pay a fixed monthly amount for each patient—among specialists and health plans than among primary care physicians. The move toward direct access to specialists and easing of preauthorization requirements also likely had a greater impact on specialists than primary care physicians.

Detailed in a new HSC Tracking Report, Back in the Driver’s Seat, Specialists Regaining Autonomy, the study also examined the relationship between physicians’ clinical autonomy and level of managed care revenue. Generally, physicians—both specialists and primary care—with lower levels of managed care revenue reported more autonomy and continuity with patients and were more likely to believe they had adequate time with patients, compared with physicians with higher levels of managed care revenue.

However, the study found that managed care involvement is now much less important to specialists’ clinical autonomy because specialists with both high and low managed care revenues reported greater ability to make decisions in patients’ best interests without reducing income between 1997 and 2001. In 1997, 66.9 percent of specialists with high managed care revenue reported that patient care decisions did not affect income negatively, compared with 72.8 percent with low managed care revenue. This 6-percentage point gap declined to 2 percentage points in 2001.

Specialists with the most managed care revenue also reported a dramatic improvement in continuity of care with patients, with 71.2 percent of these specialists saying they could maintain relationships with patients to promote quality care—an 18.3 percentage point increase from 1997 when only 53.9 percent believed this. Other key study findings include:

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The Center for Studying Health System Change is a nonpartisan policy research organization committed to providing objective and timely insights on the nation’s changing health system to help inform policy makers and contribute to better health care policy. HSC, based in Washington, D.C., is funded exclusively by The Robert Wood Johnson Foundation and is affiliated with Mathematica Policy Research, Inc.