Responses to managed care can present their own dilemmas for psychologists.

By Rebecca A. Clay

When Health New England started talking about bringing in a managed-care company to cut its ever-increasing mental health-care costs, the health maintenance organization?s mental health practitioners proposed an alternative solution: They would develop a cost-cutting program of their own. Instead of putting business-minded bureaucrats in charge, mental health professionals themselves would call the shots.

As the managed-care trend continues, such arrangements are becoming increasingly common. Mental health professionals in New York, Philadelphia and New Haven, Conn., have created groups that now cover thousands of people. And the Georgia Psychological Association recently formed a for-profit company of its own.

While proponents point out that these arrangements put power back in providers? hands, others warn that there may be no escaping the ethical dilemmas inherent in managed care.

A provider-run system

Psychologist Stephen Armstrong, PhD, was pleased when Health New England shifted to a provider-run system in 1991.

'The arrangement gives us more autonomy and more local control,' says Armstrong, a private practitioner in Springfield, Mass.

The system now features 15 specialty groups, each led by a psychiatrist. Having mental health professionals at the helm means that mental health professionals share information with colleagues rather than insurance clerks and get treatment OKs from mental health specialists rather than administrators, says Armstrong.

So far so good. The problem? Despite its commitment to high-quality service, the new arrangement faces the same cost-containment pressures every other plan faces. Led by four stock-holding psychiatrists, the plan has seen monthly mental health costs drop from $7.75 per patient in 1991 to about $5.25 in 1997. The average mental health patient receives just five sessions a year.

Even worse, the reimbursement method the psychiatrists devised features an incentive system designed to keep providers within tight budgets. The plan retains 20 percent of every provider?s reimbursement and releases the money at the end of the year only if providers stay within the overall mental health budget. Last year, budget overruns meant that providers received less than half of their held-back reimbursement.

Armstrong admits that last year?s financial loss was 'a bit of cold water.' He also admits that there?s some peer pressure to keep costs low and some resentment of panels that go over their allotted budgets. And although he says this financial arrangement doesn?t lead to inadequate care, he concedes that it does lead to a different kind of care.

'It?s not the old days where you could sit down and chat about patients? problems, says Armstrong, who counts himself lucky that he has never been forced to stop treating patients he considered suicidal. 'I?m very focused, very direct, very short. I don?t have a lot of time. I just do the best I can.'

As this example illustrates, provider-run plans face the same kind of ethical problems that plague traditional managed-care companies, says APA Board Member Catherine Acuff, PhD, chair of the APA Committee on the Advancement of Professional Practice?s Task Force on Ethical Practice in Organized Systems of Care.

'The cornerstone of psychologists? ethical code is that the patient?s welfare should be our primary concern,' she explains. 'When you?re trying to balance both the welfare of the patient and the welfare of the larger population, you can easily find yourself in an ethical crunch.'

The state association model

The Georgia Network of Psychologists (GNP) represents another alternative to traditional managed-care plans. GNP is a for-profit company owned by the Georgia Psychological Association (GPA).

'Managed care was moving into Georgia with a vengeance,' says GNP president Bob Kleemeier, PhD, noting that many managed-care panels were closed, denying GPA members access to patients. 'We were looking for some kind of positive response.'

Incorporated in 1996, GNP represents the association?s attempt to create a kinder, gentler managed-care company that would be patient- and psychologist-friendly. The company uses a 'messenger model' to contract with managed-care companies that are looking for a behavioral health component. When a managed-care company offers GNP a contract, GNP mails it to the 254 psychologists it has credentialed to provide care. Each of them then decides whether to participate and authorizes GNP to sign the contract on his or her behalf.

GNP?s main advantage is that it gives individual psychologists a way to participate in managed-care contracting without having to face the financial, logistical and other barriers of going it on their own, says Kleemeier. The drawback is that GNP?s providers are still bound by the rules of the managed-care companies they work with. Although GNP has secured contracts giving its all-psychologist panel access to more than 750,000 lives, there are plans to use master?s level clinicians in some situations to expand GNP?s marketability by meeting the demands of certain purchasers for multidisciplinary panels.

To date, GNP has not sought out contracts with managed-care companies whose per-session fees are extremely low. However, if enough GNP psychologists voice an interest, GNP will pursue such contracts using a model of the psychologist as supervisor/administrator and master?s-level clinicians as service providers. This is a model widely used by psychiatrists and one that allows the psychologist to be compensated at a reasonable level for overseeing the clinical work of lesser- trained individuals, GNP officials say.

In a meeting last week with independent insurance brokers, Kleemeier and GNP?s marketing director, Marsha Sauls, PhD, were informed that the executives of firms of 50 to 500 employees need high-quality psychological services. GNP is developing a range of services and a marketing plan to pursue this high-end market, which, hopefully, will minimize the need to engage in cost-driven competition with its inevitable drop in quality, Kleemeier says.

'For behavioral health parity, prescription privileges and other legislative gains to truly help psychologists, we must control the delivery system,' says Kleemeier. 'Health care in America is now a business, and as long as psychologists remain in the role of employees, we will face all of the frustrations and abuses characteristic of the lives of laborers. Provider-owned companies can ensure that an appropriate portion of ?parity? goes to psychologists and that once psychologists win the battle for prescription privileges, they have patients in their waiting rooms to treat.'

Some GPA members don?t approve of the association?s move into the managed-care arena. Nick A. DeFilippis, PhD, for example, worries about the potential conflict of interest between the association and GNP, which is open to all GPA members who make it through the credentialing process. What happens if a GPA member turns out to have a treatment style that?s incompatible with managed care?s emphasis on cost containment, DeFilippis asks.

DeFilippis is also concerned that the company will damage the association?s credibility.

'How can GPA go to an employer and tell them we don?t think managed care is a good thing for outpatient services, when GPA is sponsoring its own managed-care organization?' asks DeFilippis, a psychologist with Atlanta Psychological Associates and a professor at the Georgia School of Professional Psychology. 'The money that has been collected to put this thing together could be put to much better use educating purchasers.'

Concerns like DeFilippis? are probably inevitable in a marketplace that still emphasizes cost more than quality, says Russ Newman, PhD, JD, executive director for professional practice at APA.

'The jury is still out on whether provider-sponsored networks can compete effectively with the insurance and managed-care industries in the current marketplace,' he says, citing a Minneapolis-area provider-sponsored network that wound up giving contracts to purchasers that were 10 percent lower than the rates usually paid. 'Until the marketplace puts some controls in place to ensure a better balance between cost and quality, there will be questions about provider-sponsored networks? ability to survive unless they?re willing to cut the same corners managed-care companies have.'

That doesn?t mean psychologists shouldn?t develop organizations like Health New England and GNP, says Newman. Rather, he says, they should see such organizations as just one element in a broader strategy. To create an environment in which these groups can succeed, psychologists should also be working to get health-care reform legislation passed and to educate health-care purchasers about the need to balance quality and cost.

'Provider-sponsored networks represent one step toward fixing the serious problems with the health-care delivery system,' Newman says.

'Some people,' adds Acuff, 'argue that psychologists can?t ethically practice within managed-care systems at all. But the reality is that in many parts of the country, the public?s need for services simply wouldn?t be met if psychologists walked away. As a profession we can?t turn our backs on the evolving marketplace. That in itself could create an ethical dilemma.'

Rebecca A. Clay is a writer in Washington, D.C.