"When people think of health care," says Sam Howard, Chairman of Phoenix
healthier of Tennessee, Inc., "they usually think of the fee for service method.
They have an insurance policy that pays for their medical care. They have
a choice of the doctor they consult, who, in turn, generally select the hospitals
they enter."
Managed health care, on the other hand, is different, and one of the greatest
differences is the method of payment. In fact, there are a number of methods
of paying doctors in the 12 managed health care systems in Tennessee. Primary
care doctors--internists, pediatricians, general and family practitioners - -are
paid on a capitulation basis. They are assigned a certain number of patients
and paid so much for each patient.
The
specialists - cardiologists, radiologists- are still paid on a fee for service
basis, but discounted. Contracts are worked out with this group to
transfer the patient from the primary health care system to the specialist, "and
you manage that process," says Howard. "Thus, there is still a fee for
service medicine in a managed care system, but it is only for a segment of the
medical community." Hospitals under this system are paid on a
per patient basis, with each receiving so much for each patient,
regardless of the number of days the patients stays. These rates are
negotiated between the managed care organization, the doctors and hospitals,
pharmacists, and laboratories.
The health care system in the United States represents about 14 percent of the
total Gross National Product (GNP). "It consists of hospitals, doctors, pharmaceutical
companies and every thing else. What is occurring in America today," says
Howard, "is a gradual shift from a fee for service system - such as Blue Cross,
Prudential types of policies to a managed care system. Fifty one percent
of the people in the country are in managed care systems like Phoenix healthier
system. This is the kind of reform that is taking place in the health
care system."
The problem in the health care system, he continues, "is that we have about
37 million people out there who do not have health care coverage. I didn't
say they were denied health care, I said that they do not have insurance
coverage. They still get their health care. We pay for it out of bad
debts and other operating costs." A second consideration regarding the
health care system is the escalating costs, says Howard. For example, "you
can go into a hospital for a day and be charged as much as $10,000. It is
so expensive." In fact, explains Howard, it was the escalating cost and the
large number of uninsured Americans that gave impetus to the health reform
movement out of the national capital. In addition "When President Clinton
was elected, the country was in a recession, many people were out of work and
without health care coverage since your health care is tied to your job," said
Howard. "If you don't have a job, you don't have any coverage.
People were apprehensive." These factors "gave the push for health care
reform."
Over the last couple of years "the economy has improved more people are working.
In Nashville, the unemployment rate is 2.9 percent. Since everybody is working,
they now have health insurance coverage. There is now no longer the
clamor for national health care reform." Nevertheless, "healthier reform is going
on anyway. The reform is taking place as people move from the fee
for service, high cost medicine, to managed care, which is a more reasonably priced
method of delivering health services."
This type of reform will continue, says Howard, "whether or not
we have national health care legislation." In fact, "we are better off without
national health care legislation, if we want the transition to be smooth.
If we have national health legislation we will have regulations we will have to
implement and that might slow the process. But we are gradually moving
toward managed health care that might be needed for the industry to bring
about more reform, adds Howard. These needs can be can be prioritized.
"Number one, we probably should have some type of reform in the area of medical
malpractice; second, we need to mandate more programs like TennCare so that more
people can. be covered."
Third, "something should also be done about preexisting conditions since many
people who have pre existing illnesses cannot be covered. In my opinion,
that is about the extent of national health care reform. The rest is time.
It just takes time to implement the reform."
In a managed care situation, as opposed to the fee for service method, the
managed care provider such as Phoenix healthier, says Howard "will assign
you a doctor and we will manage you throughout the health care system so that
you don't have to worry about the admission forms and other administrative problems.
We take care of you throughout the system. All you have to know is that
we have assigned you one doctor. This is your primary care physician.
He is very knowledgeable about you. He keeps your medical records, and every
time he wishes to move you throughout the system, he calls us, and we make sure
you have all your hospital costs covered. You don't have to know a lot about
the system," says Howard, "except Phoenix, and your doctor."
The Phoenix healthier Corporation operates in 75 of the 95 counties in Tennessee.
It does not operate in the Northwest and Southwest CHA, around Jackson.
There are offices in Nashville, Knoxville, Chattanooga and Memphis.
The company
has grown considerably since January, and is in the process of expanding its
space at its 3401 Building site on West End Avenue in Nashville. The
company has 71 hospitals, 1,053 specialists, and 443 primary care doctors.
"There are about 1,500 doctors with us throughout the state of Tennessee," says
Howard, "and that's a lot of doctors." Blue Cross, in comparison, has 6,000
doctors.
The Phoenix healthier Corporation is operated by a staff that includes a medical
component, or Dr. Molar, the former medical director of Prudential. He is
in charge of all medical areas, such as utilization, management, and operations;
Anica Howard is in charge of claims, member services, and MIS. The Finance
Department is headed by Stephen Braen, a cofounder, CPA, and Tennessee State University
graduate. Lisa Shephard, a former Kodak employee, is in charge of advertisement.
"We provide our
members with good hospitalization, all specialist costs, drug costs, and
transportation to hospitals, specialists and drug stores," says Howard.
Other benefits offered by the company includes vision and dental coverage to
those, over 21 years of age, "neither of which is part of the Medicaid benefit
package." There is also an accidental death policy. "You will get a lot
more benefits from Phoenix than many of the other plans. More important,
you get good service. Our mission is putting people first," Under
managed care in Tennessee "Open Enrollment " takes place once a
year. This allows those who wish to change their provider the opportunity
to do so, as well as allowing an additional number of recipients to become a
part of the TennCare system. "We expect about 20,000 during this 'Open
Enrollment,'" says Howard.
Dr. James Haney, Writer
*As Seen in the "Taking Time to Comment" Column of the
Metropolitan Times,
