UnitedHealth Group Gives Physicians Final Say in Approving Treatment

By Ronald L. Scott

In a widely applauded move, UnitedHealth Group, the nation’s second-largest health insurance company, has announced plans to allow physicians the final say on what treatment is medically necessary for their patients. Physicians will still be subject to "economic credentialing," meaning they will be monitored and may be sanctioned if they approve too much care (or inappropriate care) too frequently. Such physicians could be dropped from UnitedHealth’s network of physicians. Nonetheless, the move by UnitedHealth is a striking one, challenging a fundamental tenet of managed care, i.e., that prospective utilization review of proposed treatment decisions is necessary to control the costs of health care.

News articles have focused only on the new approach granting physicians more control of what constitutes medically necessary treatment. However, the change in policy is only part of a new initiative UnitedHealth calls "Care Coordination," a program that focuses on improving individual’s health through education, accelerated access to care, coordination of fragmented services and outcome measurement, together with increased monitoring of members who have chronic and complicated medical conditions. UnitedHealth says seven "core" clinical activities are utilized, including Health Education, Admission Counseling, Inpatient Care Advocacy, Readmission Prevention, Disease Management, Complex Illness Support, and Pharmacy Management. See http://www.uhc.com/press/991109ccoord.html.

Advocates of managed care reform and physicians have formed loose coalitions in recent years to promote the idea that physicians--not "utilization reviewers"--should make treatment decisions. However, others have argued that utilization review is required to keep costs, or inappropriate care, in check. As is often the case in health policy, little hard data exists to support either side in this debate. Before implementing its change of policy, UnitedHealth pilot tested its new policy in Tennessee earlier this year before beginning national implementation. Ironically, the change in policy was not made to appease critics of managed care, but rather for sound business reasons. The company found that it was spending $100 million annually to review procedures and was approving 99% of requests for coverage. By changing its policy, UnitedHealth will be able to cut its medical monitoring staff by 20% nationally.

The company should enjoy additional tangible and intangible benefits. It has already enjoyed substantial public relations benefits, including compliments from President Clinton. Also, the company will not have to endure the costs associated with external review in states such as Texas that allow patients to appeal denial of care decisions. The company should also save legal expenses. For example, Humana, another managed care organization (MCO), was recently sued for allegedly failing to disclose conditions of its coverage and for paying staff to deny coverage.

The voluntary move by one MCO should not derail efforts in Congress to enact a patients’ bill of rights, nor should it signal that managed care companies have given up efforts at cost containment. Rather, it should challenge managed care companies to reconsider other criticized practices of managed care.