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As managed care proliferates, psychiatry and APA are increasingly confronted with situations that pose the potential for serious conflicts of interest. Foremost among these situations are psychiatrist-run carveouts, and it was a discussion of such carveouts that dominated last month's meeting.
Ronnie Stangler, M.D., a clinical professor of psychiatry at the University of Washington and a past president of the Washington State Psychiatric Association, discussed the history and development of Pacific Mental Health Associates (PMHA). PMHA is a nonprofit, psychiatric independent practice association (IPA) operating statewide in Washington. PMHA is now negotiating a contract to provide care for about 140,000 lives (not initially capitated), as well as a partnership with a health plan covering one million subscribers.
Currently PMHA has 400 clinicians, 140 of whom are psychiatrists. The rest are doctoral-level psychologists, psychiatric nurses, and social workers. All are credentialed according to standards set by the National Committee on Quality Assurance--"This already is a feat," Stangler commented.
The cornerstone of PMHA's care is that it does not use gatekeepers--subscribers have open access to a psychiatrist or other mental health professional of their choice. Moreover, clinicians are used in all aspects of utilization management.
"We have visited, literally visited, the offices of [our member clinicians] and have educated them as to both the opportunities and responsibilities of being in this kind of business," said Stangler. "In a sense, that becomes probably the most essential part of our utilization management--that process of education and sharing of a philosophy."
According to Stangler, PMHA began with five psychiatrists who wanted "to participate responsibly" in the allocation of scarce resources in mental health. She noted that the psychiatrists never considered establishing a formal relationship with APA to form the IPA because of the risk of potential conflict. She expressed appreciation that PMHA had received informal input from APA's Office of Economic Affairs and Practice Management and the Division of Government Relations. The main source of information and developmental assistance came from Northwest Mental Health Associates, a nonprofit IPA in Oregon, she said.
PMHA's governing structure ensures that psychiatrists have a majority interest in the IPA, said Stangler. Three psychiatrists, including Stangler, have rotating responsibility for making final certification decisions. These doctors are available 24 hours a day to participate in treatment reviews as needed.
"Whatever else APA does," commented Stangler, "one thing we need to do is to promote psychiatrists as leaders. We need to teach our members how to lead organizations, teach them how to take on leadership responsibility in evolving practice systems wherever they may be."
Robert Ostroff, M.D., the medical director of PsychCare in Connecticut, said that although PsychCare is a nonprofit IPA, the psychiatric services are provided through PsychManagement, a for-profit medical service organization (MSO).
PsychCare's organization as a fully capitated plan raised potential conflict because it created incentives to limit psychiatric services, according to Ostroff. He said he is sometimes troubled by the conflict between patient interest and the bottom line.
"I am now in the position that I never wanted to be in my professional life: where I stand to gain advantage financially by denying patients needed care," he confessed.
Psychiatrists increasingly feel "they are being squeezed" and consigned to the role of medication managers, said Edward Gordon, M.D., chair of APA's Committee on Managed Care.
The New York State Psychiatric Association (NYSPA) is struggling with many of the same issues confronting APA, observed APA Council on National Affairs Chair Edward Hanin, M.D. Well aware of the inherent controversy surrounding "the whole issue of whether or not a psychiatric association should run an IPA," New York psychiatrists have nonetheless chosen to go forward with a proposal for an IPA, he noted.
Foremost among the questions under consideration are how closely the IPA should be affiliated with the NYSPA and whether it should be for-profit or nonprofit, he said. Despite the controversy, said Hanin, many of those involved in discussions about the New York IPA proposal felt that the state psychiatric association might best be able to "provide the structure and the impetus" to bring together a diverse group of solo practitioners for their mutual economic benefit.
"Conflicts of interest are built into this [New York State Psychiatric Association proposal]," observed Area 2 Trustee Herbert Peyser, M.D. But "whether you like it or not, [IPA's] are developing." He noted that the New York IPA proposal will be presented to the NYSPA membership for feedback and may undergo substantial revision.
The ethical issues raised by capitation and unnecessary treatment and overtreatment are similar, yet capitation has provoked a far greater outcry, observed Seth Stein, J.D., executive director and legal counsel for the NYSPA.
It is the issue of "exclusionary care" shutting out some APA members that distinguishes capitation as an issue from unnecessary treatment and overtreatment, observed APA President-elect Herbert Sacks, M.D.
Anthony D'Agostino, M.D., of the Illinois Psychiatric Society, heads a fully capitated, 13-psychiatrist carveout. Managed care has been like a gun to the head of psychiatry, said D'Agostino. "The first priority," said D'Agostino, is to "grab the gun." That is the role of psychiatrist-run IPA's, he asserted.
"Our original motivation was self-preservation," said D'Agostino. "It was a sense of outrage that somebody else was going to tell us how to do things."
Under its standard contract, D'Agostino's carveout permits patients to see a psychiatrist for the initial two visits without going through a gatekeeper, he explained. Fees are set "by the marketplace," he said, but since he and his colleagues started the IPA in the late 1980's, they have not had to cut psychiatric fees.
Although some of their contracts cover the range of psychiatric disorders, including personality disorders, said D'Agostino, the carveout also accepts lower cost contracts where personality disorders are not covered, he said.
At the national level, APA is faced with the question "What poison do you choose?" said Lloyd Setterer, M.D., Assembly liaison to APA's Council on Economic Affairs. If APA chooses to act as a business partner helping formulate IPA's, the criteria for success will diverge sharply from the criteria that define a successful membership organization, he observed.
If APA does not act as a business, it will fail, but if it does, it will infuriate many members who find themselves shut out or subject to utilization review standards set by their own membership organization. It could, as well, expose APA to liability for bad outcomes, he noted.
The risks for APA of direct involvement in IPA's and utilization review outweigh the benefits, said APA Chief Operating Officer Robert Trachtenberg, J.D. These include not only legal liability, but the possibility that APA would find itself approving a contract in which less than parity is accepted. Such a stance would undercut the Association's larger legislative mission, he observed.
One respondent to a survey mailed out prior to the conference told Hanin that the fears of competition among psychiatrist-run carveouts are overstated, since members routinely compete with each other for patients.
Despite the controversy and diversity of views, it is critical that APA "stick to the value of making patient care a priority," remarked Andy Cutler, M.D., of APA's Scientific Program Committee. Whatever decision is made at the national level, APA must not impede the capacity of the district branches to act locally, said Cutler.
(Psychiatric News, June 6, 1997)