Feature Articles

Gene C. Baldwin
Correctional Healthcare Consulting
5099 China Road * Tell City IN 47586
(812) 843-5048
www.gcbaldwin.com

“Solving Tomorrow’s Problems Today”

"Managed Care in the Correctional Setting -- A Promising Dilemma?"

Introduction

Most people have by now heard of "managed care". The term itself evokes images of physicians being unable to practice medicine without the blessing of non-clinical management-types, whose goal is to limit the services provided for the sake of containing overall healthcare costs ( and consequently generating profits). Managed care, however, has evolved as a result of the unique nature of healthcare economics, where the standard models of supply and demand do not always apply. It is the presence of a third party (the "payer") in the healthcare equation that has led to the development of the managed care model.

In the correctional setting, this payer is the confining authority. Although the introduction of various co-payment schemes has sought to modify demand, financial participation by the offender/patient is typically negligible. To understand what role managed care should play in the correctional setting, one must examine the motives involved in the entire correctional healthcare process.

The primary purpose of managed care is to regulate the demand for healthcare services and ensure that services are provided only after certain established criteria are met. The concept revolves around the application of a fixed fee per covered person in exchange for a range of healthcare services to be delivered over a specific period of time. This is the standard HMO (health maintenance organization) model. In theory, the "maintenance of health" reduces the need for more expensive modes of clinical intervention. In corrections, the issue lies in the distinction between the "maintenance of health" and the "management of care".

Motives and Incentives

In the classic HMO approach, the patient is encouraged to seek early evaluation of potential medical problems via the financial incentives inherent in HMO membership, i.e., minimal out-of-pocket expense for appointments with the primary physician. On the other hand, this incentive for early primary care intervention also induces some members to seek far more involvement with healthcare providers than they otherwise would on strictly a fee-for-service basis -- "I’ve already paid for it, so why not take full advantage of it?"

In either case, while the patient may decide what healthcare services he/she wants, it is nonetheless up to the physician to order and prescribe. The desired services will not otherwise become available. In the fee-for-service world, the physician has little incentive to defy the patient’s wishes, provided that a reliable source of payment is involved. In the managed care model, with its introduction of cost controls for the sake of either saving or making money, a conflict between the desires of the patient and the motives of the sanctioning management authority evolves, with the provider becoming the fulcrum between the two.

The "maintenance of health" entails a cooperative venture between the patient and the provider. The patient looks to the provider to investigate his/her complaints, symptoms and concerns, ruling possibilities in or out along the way through various diagnostic approaches until a diagnosis is obtained. The physician, in turn, expects honest participation throughout the process, including patient compliance with various instructions and modes of treatment. While this ideal dynamic can certainly occur within the correctional setting, it is far from typical, hence the evolution and ascendancy of correctional managed care.

Offender/Patient Motives

To some extent, the healthcare needs of incarcerated populations exceed those of an otherwise age comparable non-incarcerated group. Simply put, prisons and jails house people whose lifestyles prior to incarceration have commonly resulted in a variety of health concerns -- some chronic, some infectious, some self-inflicted and some simply unfortunate. Consequently, offenders arrive into the correctional setting with a wide range of physical and mental conditions already established. In some cases, a diagnostic work-up or treatment plan may already have been underway at the time of arrest.

However, upon incarceration, some offenders will use a pre-existing medical or psychological condition as a means of establishing leverage and control over events. Others will manufacture new problems for the same purpose. While the range of legitimate healthcare concerns found in the correctional setting may, albeit in a concentrated fashion, reflect those prevalent in free society, nowhere is the motive for manipulation and abuse of healthcare services greater. Correctional healthcare is rife with hidden agendas and the desire for secondary gain.

Among the problems facing correctional healthcare providers are those offender/patients who use frivolous and fraudulent litigation as a means of power, control and profit. Some offenders will also have personal injury, Workers’ Compensation or disability cases pending at the time of incarceration. As such, they will try to manipulate the healthcare providers in such a fashion as to support their ongoing "outside" claims. This may include establishing a continuing record of frequent medical encounters, demanding special dispensation intended to excuse them for certain job assignments, seeking specialized orthopedic items, and so forth.

Some offender/patients may have been involved in athletics in their past and, having been exposed to active sports medicine programs in that regard, demand a continuation of that level of support during incarceration. Others maintain the attitude that incarceration itself entitles one to having every imaginable health complaint resolved, ignoring the fact that not every medical problem can be totally eliminated regardless of one’s social status. A generalized sense of entitlement also pervades.

Beyond the realm of contrived or even fraudulent demand for healthcare services, some offender/patients are subject to, for lack of a better term, "incarceration hypochondria". The world of the offender is highly compressed and structured, giving rise to the opportunity for reflection at best and obsession at worst. While idled within the confines of his/her bunk, the patient can magnify the significance of ordinary aches, pains and other extraneous sensations to the point of true concern within the individual, prompting the desire for ongoing medical treatment.

Thus, as in no other setting, the demand for correctional healthcare services is the result of a wide range of motives, attitudes and beliefs. While this demand is largely unchecked by personal financial participation on one hand, the supply of correctional healthcare services is offered (or withheld) within a similarly unique set of motives, attitudes and beliefs as well.

Healthcare Provider Motives

People enter the healthcare field for a variety of reasons, the most universal of which is the desire to offer aid and comfort to those in need. To the extent that a provider’s credentials allow for fee-for-service compensation, the motive to encounter patients as frequently and intensely as possible can also come into play, particularly when the patient is financially buffered from the provider’s diagnostic and therapeutic decisions by a third party payer.

Although most offenders may regard clinicians as trained professionals who are there to do a job and serve a function that is ultimately for the welfare of everyone at the facility, a certain portion of the demand for correctional healthcare services is nonetheless motivated by the desire for secondary gain (which can often be expressed in a hostile or threatening manner intended to intimidate and control). Thus, some providers will simply follow the path of least resistance and do whatever the patient/offender wants.

The extent to which a healthcare provider seeks to satisfy the demands of the individual offender/patient is influenced by a variety of factors, the most universal of which is the fear of litigation. The correctional environment is famously litigious, with healthcare a particularly soft and frequent target. The fear of being sued for having failed to satisfy the every demand of the offender/patient can operate at many levels. This fear can give the fraudulent offender leverage over both clinical and non-clinical correctional staff. Thus, in the absence of firm policy guidance and support, many practitioners will engage in an overly defensive (and needlessly expensive) approach to clinical decision-making.

It is within this context of manipulation and abuse that correctional healthcare providers must identify legitimate clinical needs and seek the appropriate level of intervention. As the sole source of care for a captive population, providers also realize that failure to identify and respond to legitimate healthcare concerns against this backdrop of distorted demand can yield devastating consequences.

The Case for Managed Care

As noted earlier, the primary purpose of managed care is to regulate the demand for healthcare services and ensure that services are provided only after certain established criteria are met. This is done as a means of controlling costs and allocating budgeted funds in such a manner as to provide necessary care while deferring care that, while desirable from the patient’s perspective, is not urgently needed or does not otherwise reflect a serious underlying medical condition.

Given the ever-growing demand for healthcare services and the burgeoning expense it entails, at its best correctional managed care establishes a process for balancing fiscal responsibility on one hand with liability exposure concerns on the other. At its worse, however, the principles of correctional managed care can be distorted by the hunger for profits and market share.

At their simplest, managed care principles can be expressed in the form of a policy, for example, that defines the eligibility for different priority levels of dental treatment based on the individual patient’s motivation for self-care and the amount of remaining incarceration time. The supply of clinical services, in this case, is molded by fairly objective constraints intended to channel the dentist’s time and operating budget into the areas of greatest need and clinical impact.

Applying such objectivity to the management of medical care, however, is significantly more complex -- hence the proliferation of privately held companies contracting with correctional systems to establish and operate managed care programs.

These companies develop the operating systems and internal resources required to analyze patient needs and demands in a fashion that many correctional entities would be challenged to duplicate, given the constraints and peculiarities of governmental management incentives. Site-level physicians are subject to the guidance provided in corporate utilization review policy as well as direct oversight by a medical director. The clinical approach to a variety of medical issues, such as chronic or infectious diseases or certain orthopedic concerns, is standardized. Specialty panels are convened to review particularly troublesome cases.

Correctional systems contract with these private managed care companies for a variety of reasons, not the least of which is the predictability of expenditures. While individual contracts can involve a variety of features, one of the primary advantages for the correctional agency lies in the application of a capitated rate, by which the contractor is paid a fixed amount of money per covered offender per day over the life of the agreement. This represents the revenue base for the managed care contractor, from which a profit must be extracted in support of the ongoing viability of the corporation (and its key staff).

Checks and Balances

Given that runaway healthcare demand and unregulated clinical utilization often set the stage for the eventual implementation of a managed care contract, the offender population can suddenly find itself affected by "new rules" and challenges. Levels of care that were once regarded as routinely available are no longer part of the program. Facility administrators, whose professional comfort zone is defined in part by the absence of offender complaints, have far less influence over what level care is provided in order to placate a particular offender. Thus, an increase in offender grievances can be anticipated as a managed care program is implemented.

While a grievance review process is (or at least should be) part of any correctional operation, it becomes especially valuable as a means of monitoring the application of managed care principles by the particular company in question. Careful investigation of such complaints is required to ensure that the profit motive of the contractor is not so robust as to ultimately cause harm to the population it alleges to serve through an over-zealous denial or deferral of services.

Offenders are, through judicial interpretations of primarily the Eighth Amendment, entitled to receive the healthcare services required to treat (or possibly even prevent) serious medical problems. The issue, of course, relates to the definition of the word "serious" within that context.

One approach deals with an assessment of the outcomes that a reasonable person could infer from a decision to withhold or defer the requested service. In other words, what happens to the patient if we don’t repair a hernia, order a lumbar MRI, make a referral to a specialty provider, etc.? How will the denial of service affect his/her lifestyle within the correctional setting? Will the denial (or deferral until the offender is released) cause the condition to deteriorate in the interim? Will the denial of service pre-empt effective treatment after release, or cause significant suffering prior to release? What alternate treatment modes or approaches are available?

Another important measure of the efficacy (and equity) of a managed care program has to do with its consistency. Are the articulate or openly litigious offender/patients likely to get more out of the healthcare program than the rest of the population? Do denials or deferrals ever appear to be arbitrary? Is treatment approved, but then delayed until rendered moot by the patient’s release from confinement? An apparent lack of consistency may be the result of many factors, but in any case one must again examine the profit motive of the contractor, for such inconsistency may indicate that a segment of the population is being subtly taken advantage of by the managed care process.

In addition to ensuring that the correctional agency is indeed getting what it bargained for (i.e., that the contractor is fulfilling all of its promises and obligations) such oversight also serves to limit the agency’s portion of the liability it shares with the contractor should its approach to managed care fare poorly under the glare of judicial review.

The Promising Dilemma

Given the unique dynamics of correctional healthcare, the managed care model can play a valuable role in controlling costs and directing resources to the areas of greatest impact and need. The dilemma lies in the notion that the incentives and accountability needed to successfully drive a managed care process ultimately derive from the profit motive, rather than from the organizational abilities of a government agency.

Correctional agencies must therefore harness the power of the profit motive while simultaneously developing the monitoring and investigative mechanisms required to ensure its equity.