Focus: Preventive Medicine

Health centers across the country prepare for the age of managed care. and JORIE GREEN Preventive health care, it seems, is no longer limited to patients. With managed care likely to be mandated under the Clinton administration's health-care plan, university medical centers are rushing to expand. Administrators claim it is the only way for them to remain academic leaders and financially afloat in these changing times. · Among those leading the charge is the University's Medical Center. Officials there fear that failure to act now could spell disaster down the road. Last month, officials at the Medical Center announced plans to buy out the practices of between 100 and 200 Philadelphia-area primary-care physicians, while bringing another 500 on board as affiliated staffers. Medical Center officials estimate it will cost $60 million to buy the practices, to be paid out of the center's cash reserves. The University's health system will also set up a central administrative office, which will handle appointments and billing for its doctors. The total price tag for the University's move to managed care: $80 million over 10 years, according to Gordon Williams, vice president of the University's health system. Throughout the country, managed care systems group physicians and often hospitals as a way to reduce costs. For example, Health Maintenance Organizations reduce costs by capping payments to physicians. The University's health system may eventually become the health-care provider for as many as 600,000 Delaware Valley residents, said William Kelley, the chief executive officer of the University's health system. The move is necessary because under managed care, primary-care physicians – general internists, pediatricians and obstetricians – supply hospitals with patients. Without a network of primary-care physicians to serve as the feeder for the Hospital of the University of Pennsylvania, Medical Center officials worry that HUP might face a serious shortage of patients. Such a shortage would drastically reduce revenues for HUP, Medical Center Vice President Wilbur Pittinger said last month. Even worse, Pittinger said, a shortage of patients would seriously impair the Medical School's capacity to teach. "You can't teach a physician or a nurse-in-training over an empty bed, or in an empty examining room," he said. · Officials at some of the nation's other top academic medical centers echo Pittinger's concerns. Several other medical centers, among them the University of Chicago and George Washington University, have already either bought out or affiliated with large numbers of primary-care physicians in their regions, similar to the University's plan. The point of managed care is to force health-care providers to offer care in the most cost-effective manner possible, said Gerard Anderson, the director of the Johns Hopkins Center for Hospital Finance and Management. In a managed care system, providers receive most of their revenue in the form of annual premiums for each patient they are responsible for, said Anderson, who participated in the design of the health-care legislation now before Congress. In this scenario, proponents hope managed care will force providers to treat patients as cost-effectively as possible, because they will no longer make more money as a patient requires more treatment – as has been the case under the traditional fee-for-service practice. One place where managed care has caught on is the University of California-Los Angeles Medical Center. There only 10 percent of patients are seen under the old fee-for-service system, UCLA Medical Center Director Raymond Schultze said. The vast majority of UCLA's patients are seen under contract. Under managed care, the more treatment a patient requires, the worse things get for the health-care provider because it has to bear most of the costs for the treatment. That means providers will emphasize prevention and primary care, since it is much more cost-effective for them to treat patients with regular checkups before patients become seriously ill, than to wait until they must be hospitalized, Anderson said. "[Under managed care] you want to emphasize prevention as opposed to acute care as much as possible," Anderson said. In a managed-care system, primary-care physicians – traditionally accorded less prestige and paid less than their specialist counterparts – are thrust into the spotlight as the demand for services is driven sharply upward. The added stress on primary care has been unpopular with some people, especially medical students, who fear they will earn far less money than many doctors do today. First Lady Hillary Rodham Clinton found that out recently. She raised the ire of the country's future doctors by proposing that low-interest medical school loans be tied to the students becoming primary-care physicians after graduation. · Outpatient care also figures prominently into the future of university medical centers, now more than ever, because it's far more cost-effective for health-care providers to treat patients on an outpatient basis than it is to hospitalize them. As a consequence, Anderson said, most academic medical centers are planning to increase outpatient facilities and looking to downsize inpatient facilities. The University's Medical Center hopes to build an outpatient-care facility on the northern portion of the property where the Civic Center is currently located. When the new HUP opens on the southern portion of that property, it may very well have fewer hospital beds than the current HUP facility has. The University of Chicago's medical center is also in the midst of an expansion similar to the University's. In September, the University of Chicago's medical center and Meyer Medical Group – a group of 42 primary-care physicians who practice in Chicago's Southside and suburbs – announced they would join forces to create a single health-care provider that can provide a full range of medical services. University of Chicago spokesperson John Easton called the agreement with Meyer Medical "a significant part" of the center's strategy of building a primary care network. Johns Hopkins recently opened a $140 million outpatient-care facility, Anderson said. Hopkins is also currently considering a large-scale integration with Baltimore-area primary-care physicians, he said. If Hopkins goes that route, Anderson estimated, it would have to become the health-care provider for roughly one million Baltimore-area residents to fill its hospital beds. Still, Hopkins might decide to forego expansion and rely principally on referrals for patients. A small number of the nation's most elite hospitals, which perform rare or unusual procedures and do not have serious competition in their immediate areas, may be able to rely on referrals and still stay afloat, Anderson said. He cited Hopkins, Rochester, Minn.'s Mayo Clinic, Dallas's Methodist Hospital and Ohio's Cleveland Clinic as hospitals that might not have to play the managed-care game. But he said that would probably not be an option for the University, because Thomas Jefferson University Hospital – only a few blocks away from HUP at 11th and Walnut streets – can provide most of the services HUP can. Duke University's medical center is also considering affiliating with groups of primary care physicians, but planning at Duke is still in the preliminary stages, said Nancy Jensen, a spokesperson for Duke University Medical Center. One reason is that managed care hasn't caught on in the Southeast as quickly as in the other parts of the country, Jensen said. Located in Durham, N.C., Duke is "insulated from the more competitive [health-care] marketplaces" buying the university time in terms of deciding what course to pursue, she said. · Although planning for managed care is at different stages at different medical centers throughout the country, administrators agree on one thing: They don't want what happened to the University of Minnesota to happen to them. Administrators tell horror stories of a medical center that got muscled out of the health-care market in its region when managed care caught on, causing serious losses in patients and revenues. The University of Minnesota ran into trouble, Anderson said, because it did not ally itself with local primary-care physicians. And, since university hospitals have to absorb the costs of teaching medicine, they have expenses that are naturally higher than those that don't. The University of Minnesota Health System's new strategic plan, recently approved by their Board of Regents, acknowledges their problems with primary care and calls for efforts to join more closely with Minneapolis-St. Paul-area primary-care physicians. What happened in Minneapolis is precisely what the University's health system is trying to avoid. As Medical Center officials plot the center's future course, they are very aware of the risks involved. "To do nothing means that the University is prepared to risk [the Medical Center's] $1 billion in assets," Pittinger said. "To do something is to say we have a chance of protecting these assets."

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