In Washington as elsewhere, the last exit on the freeway to oblivion is the off-ramp marked "Reality." On the heels of the latest US Census Bureau report showing health care revenues were up by 4.3 percent totaling more than $1 trillion in 1999, the National Academy of Sciences, Institute of Medicine released the final report from its Quality of Health Care in American Project, which described America’s health care system as "a tangled, highly fragmented web that often wastes resources by duplicating efforts, leaving unaccountable gaps in coverage, and failing to build on the strengths of all health professionals…" Something many have long known but little understood.

In this issue we’ve provided a capsulated review of the highlights from each report. Keep all of this in mind the next time you try to make sense of the political soccer game that is finally getting underway on Capital Hill.

Members who have selected the Humana Point of Service (POS) have the option to self-refer or receive services from their selected Primary Care Physician (PCP). If the PCP is referring to a Specialist, a referral form must be completed prior to receiving services. This form should be sent directly to Humana in order for the claim to be processed at the highest benefit level. This applies to referrals from a UIC PCP to a UIC Specialist. To verify Humana members’ eligibility, call the toll free line at 800.852.9556. Questions regarding member services should be directed to Humana at 312.441.1414. The mailing address for claims and referrals is:

Humana Health Care Plans

P. O. Box 740029

Louisville, Ky. 40201-7429

Questions concerning this process should be directed to Vince Savickis at X5.4137 or savin@uic.edu

A letter from CCN stating that UIC physicians must complete a credentialing application form is incorrect. Please disregard this notice. Forms mailed directly to physicians should be discarded. Questions concerning this notice should be directed to Karon Batie at X3.9429 or kbatie@uic.edu .

Cigna has made a few minimal changes to their current list of imaging services that require prior authorization, adding CT Scans and Pet Scans. Effective April 1, 2001, Cigna will require the prior authorization of the following procedures:

• CT Scans
• MRI/MRA Scans
• Nuclear Cardiac Scans
• Bone Density Scans
• PET Scans
• Ultrasounds for varicose veins

Authorization can be obtained by calling the used for prior authorizations, 800-841-3366. There will be a new menu option for imaging/radiology procedures that will connect you directly with the unit responsible for authorizing these procedures. Question should be directed to the Managed Care Office at X3.0286.

Across the country Aetna is making improved relationships with the medical community a priority. In the Midwest region Aetna has implemented key changes to their HMO plans that as requested by the plan’s participating physicians. The following improvements affect HMO plans as well as Aetna Non-HMO plans such as Managed Choice, Elect Choice, Open Access Managed Choice, and Open Access Elect Choice.

• HMO Consult and Treat Referrals. Effective immediately, primary care physicians may refer a member to specialists without specifying the procedures to be performed in the consultant’s office. A list of Consult and Treat CPT codes that may be performed in the specialist’s office and guidelines of the referral process are available and can be obtained by calling the Managed Care Office at 3-0286.

• Specialist as Principal Physician Program. This voluntary program allows eligible HMO members with serious or complex conditions that require ongoing specialty care, to directly assess a specialist for covered services when the case is registered by calling the toll-free Patient Management number on the member ID card.

The following changes apply to HMO plans ONLY:

• HMO MRI/MRA and PET/SPECT Test Precertification. These services may be referred to a participating facility such as UICMC by giving members an order on a prescription pad or facility form. A formal referral is not required.

Treating the sick is big business. The US Census Bureau says that health care and social assistance industries reported more than $1.2 trillion in revenues for 1999, with prescription drugs accounting for nearly 10 percent of the costs. Revenues for hospitals were up almost 4 percent to $413 billion and revenues for all physicians’ offices totaled $202 billion, an increase of almost 5 percent. Federal health economists predict that overall health care spending will more than double to $2.6 trillion by 2010, in part because drug costs are projected to rise on average about 13 percent per year.

These projections have implications for both individuals and the government. By 2010, prescription drugs’ share will be 16 centers on the dollar – outpacing other services like nursing home and home-based health care. Prescription drugs are a significant out-of-pocket cost not offset by private or government insurance. Americans spend more on drugs than on hospital care or medical services. And the projected drug cost for 2010 - $366 billion – does not take into account what could be spent if they were fully covered under the Medicare program, a leading issue in Congress this year.

Providing some counter balance, Princeton economist Uwe Reinhardt recently told the Council on the Economic Impact of Health System Change, that in the aggregate, spending on prescription drugs is not "a major macro-economic burden" citing that Americans now spend less per capita on prescription drugs ($358) than they do on alcohol, tobacco, and entertainment admission fees ($413). Putting a slightly different spin on the numbers, Reinhardt said that efforts to put downward pressure on prescription expenditures would have to overcome an industry three-tier pricing system that currently shields consumers from the actual cost of medications. The trend towards increased utilization of prescription drugs comes in part from people believing that "all drugs have three prices - $8, $15, or $25."

The nation’s health care industry is in major need of an overhaul, according to a review released March 1, 2001 by the National Academy of Sciences, which called on Congress to create an "innovation fund" of $1 billion to use during the next three to five years to help subsidize promising projects that will contribute to an improvement in our health system. In Crossing the Quality Chasm: A New Health System for the 21^st Century, the committee proposes a bold overhaul and a strategy to address serious shortcoming in the quality of health care available to Americans.

This report was the second of a two-part report. The first part, entitled To Err is Human: Building a Safer Health System, found that about 98,000 Americans die each year because of medical errors, and blames many of those errors on the highly fragmented system of health delivery in the United States.

The new report says the nation’s health are industry has foundered in its ability to provide safe, high-quality care consistently to all Americans and is in need of fundamental change. Research reveled a picture of a system that frequently falls short in its ability to translate clinical knowledge and technology into practice leaving too many Americans with inadequate, outdated, or even unsafe therapy. William C. Richardson, chair of the committee that wrote the report and president of the W.K. Kellogg Foundation in Battle Creek, Michigan said, among other remarks, " The system is failing because it is poorly designed….For too many patients, the health care system is a maze, and many do not receive the services from which they would likely benefit." The committee offered 10 suggestions to make the system more responsive to patients.

If funding is marshaled, the US Department of Health and Human Services is targeted to play a significant role in monitoring and tacking quality improvements in areas such as safety, effectiveness, efficiency, and equity.

For those of you who may have missed the announcement from Morley Kerschner, WWT has moved to its new offices in downtown Chicago. The information included their address and phone numbers of staff members as follows:

Wolcott, Wood and Taylor, Inc.

29 South LaSalle Street, Suite 850

Chicago, Illinois 60603

General phone number: 312.372.1607

Fax number: 312.372.4033

Extension numbers for staff members are:

Angela Allen 1204 Morley Kerschner 1101

Sharon Brown 1203 Lecia Lynn 1501

Adrian Cole 1502 Latonya Miller 1206

Cynthia Ferianc 1201 Joyce Nurenberg 1401

Tanya Gates 1205 Julie Rueda 1202

Margaret Johnson 1301

UIC e-mail addresses should be used and can be found in the UIC directory. Mail can be sent via US mail or campus mail. For campus mail, the mail code is 765. A courier service three times per week on Monday, Wednesday, and Friday mornings to and from certain campus locations, including the MSP office, can accommodate more date-sensitive materials. Call for specific mail drop locations.

Barbara Rabin, who functioned as our principle operations liaison between the health plans and our providers, has left the University to pursue a more patient-oriented role in health care management. Best wishes and much success to Barb from all of us in business development and managed care operations!

Better than warm milk…for those of you who want a little bed-time reading, the National Academy of Sciences, Institute of Medicine (IOM) report on the Quality of Health Care in American Project is available on-line at the IOM web site at http://www.iom.edu/IOM/IOMHome .

If you have a love for numbers and extra time on your hands, visit the Census Bureau site at http://www.census.gov/ for more information on health care expenditures. For extra reading credit, the NEJM weighs in on controlling these costs in their March 8, 2001 issue with an article by Dr. David Blumenthal, Controlling Health Care Expenditures.

The journal, Health Affairs, now available on-line at http://www.healthaffairs.org , has a interesting article on out-of-pocket health care spending trends that gives an additional perspective to health care costs in American. Look for Trends in Out-of-Pocket Spending by Insured American Workers, 1990-1997 by Jon R. Gabel et al. In future issues, time and space permitting, we’ll revisit some of these issues in more detail. Until then…

Mary Gibson, Editor

The Office of Managed Care, University of Illinois at Chicago, presents Managed Care News online. Comments or requests should be addressed to the editor at mgm@uic.edu. Roger Carlson, Director of Managed Care.