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The Impact of Practice Setting on Physician Perceptions of the Quality of Practice and Patient Care in the Managed Care Era
Eric L. Chehab, BA;
Neethi Panicker, BA;
Philip R. Alper, MD;
Laurence C. Baker, PhD;
Sandra R. Wilson, PhD;
Thomas A. Raffin, MD
Arch Intern Med. 2001;161:202-211.
ABSTRACT
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Background Managed care is practiced in both traditional institutional health maintenance
organization (HMO) settings and in a variety of complex and decentralized
office-based arrangements. This study examines how practice setting affects
physician perceptions of the quality of professional practice and patient
care in a managed care environment.
Participants and Methods A survey was conducted in 1998 of 1081 physicians in San Mateo County,
California, who practice in either a traditional staff group model HMO (SGM-HMO)
(n = 113) or office-based independent practice (OBIP) (n = 250). Respondents
were surveyed about current and past practice characteristics, income changes,
current satisfaction with professional and patient care matters, utility of
treatment guidelines and formularies, and general perceptions of managed care.
Responses were compared between practice settings using bivariate comparisons
and logistic regression analyses.
Results Physicians in the SGM-HMO and those in OBIP reported similar hours worked
per week, time spent with patients during office visits, and total patient
encounters per week. Declining income was more frequent in OBIP (61% vs 47%)
and relatively more substantial (27% with income declines >25% vs 4% in SGM-HMO).
Adjusting for income changes, practice setting, years in practice, and sex,
SGM-HMO physicians were significantly more satisfied with a variety of professional
and quality of care issues (P<.001), viewed more
favorably the utility of treatment guidelines and drug formularies (P<.001), and held more positive general perceptions
of managed care (P<.001) than OBIP physicians.
Conclusions In a managed care environment, SGM-HMO physicians are significantly
more satisfied with the quality of practice and patient care than physicians
in OBIP. This study suggests that the myriad managed care contracts, formularies,
and guidelines received by physicians in OBIPs may lead to more negative perceptions
of the quality of professional practice and patient care.
INTRODUCTION
MANAGED CARE has emerged since the 1980s as the premier vehicle for
containing soaring health care costs. However, as managed care has evolved
from traditional staff group model health maintenance organizations (SGM-HMOs)
into increasingly decentralized and complex networks of providers who serve
a steadily larger proportion of the population, the notion that the current
forms of managed care can provide high-quality, cost-effective care has been
challenged.1, 2, 3, 4, 5
There is evidence that the evolution of managed care has had a number
of unintended effects. These include an erosion of physician career satisfaction,6, 7, 8, 9, 10, 11, 12, 13
decreased patient satisfaction with overall care,14, 15
restricted delivery of charity care,16 and
limited funding for academic medical centers.17, 18, 19, 20
There also appear to be ethical dilemmas inherent in a transformed role for
previously non–SGM-HMO physicians regarding cost-of-care issues, patient
advocacy, and individual vs population-based care.5, 21, 22, 23, 24, 25, 26, 27
Based on these unintended effects, this study examines the role of different
practice settings in managed care and its effect on physicians' perceptions
of the quality of their professional practice and the quality of patient care.
The study is based on the results of a survey conducted in 1998 of physicians
practicing in San Mateo County, California. The goal of the study was to understand
better the impact of the growing presence of managed care from 1993 to 1998
on the practices of all San Mateo County physicians.
San Mateo County is an excellent setting for this study as it is a geographic
area that has experienced managed care from its inception and in its various
forms. Managed care in San Mateo County began in 1852 when a voluntary prepaid
health plan, La Societé Française de Bienfaisance Mutuelle,
was created to care for people of French descent arriving primarily in San
Francisco and extending to nearby San Mateo County during the Gold Rush.28 The "French Hospital Plan" functioned continuously
until it was absorbed by Kaiser-Permanente (KP) in 1989.
Managed care rapidly expanded in California during World War II, when
KP grew to serve 100 000 patients with 100 physicians.29
After a brief period of postwar decline, KP embarked on a program of steady
expansion, opening 2 medical centers within San Mateo County in the 1950s
opened. Kaiser Permanente remains the sole traditional SGM-HMO in the county
(Stephen A. Gilford, oral communication, February 1999).
Community physicians seeking to better compete with KP entered into
managed care in 1978 with the founding of the San Mateo Independent Practice
Association (IPA). Currently, there are 7 separate IPAs and myriad preferred
provider organization (PPO) plans in San Mateo County. In recent years, managed
care plans throughout San Mateo County have moved from a position of prominence
to one of dominance. Notably, patient enrollment in exclusively HMO plans
has increased from 34.6% in 199530 to 58.7%
in 199831 in San Francisco–San Mateo
County. Nearly all nongovernmental and noninstitutional physicians in San
Mateo County now work with managed care plans, whether as members of a SGM-HMO
or as physicians in office-based independent practices (OBIPs) who devote
varying portions of their practice time to managed care patients.
The present analyses focus on differences in perceptions between physicians
practicing in SGM-HMOs and those in OBIPs, which involve substantial managed
care exposure through IPAs or other managed care organizations. While previous
literature has examined the effects of managed care on satisfaction and quality
of care generally, it is quite plausible that the perceptions of physicians
in SGM-HMOs may differ from the perceptions of physicians working in other
types of managed care organizations. Practice specialty, income changes, years
in practice, and sex also may be important determinants of physicians' perceptions,
and these factors were investigated. Identifying differences in the effects
of these forms of managed care may help identify policy strategies to alleviate
some of the dissatisfaction associated with managed care.
PARTICIPANTS AND METHODS
SAMPLE
The survey population consisted of 1081 actively practicing doctors
of medicine and doctors of osteopathy who were members of the San Mateo County
Medical Association (SMCMA) in 1998. Membership in the SMCMA comprises 80%
to 85% of the physicians actively practicing in San Mateo County, according
to Medical Association surveys, and includes 222 (79%) of the 281 KP physicians
who practice in San Mateo County. Primary care physicians32
(defined as internal medicine, family practice, pediatrics, and obstetrics-gynecology)
constitute 36% of the SMCMA. Membership of the SMCMA appears to be reasonably
representative of all San Mateo County physicians, including KP physicians.
San Mateo County is an affluent community adjacent to prosperous Silicon
Valley and ranks in the top 1% of all counties in the United States in per
capita income.33 A health and quality-of-life
survey released in 1999 revealed, in 1997, the median housing cost was $430 000,
among the highest in the nation, and had risen 34% in only 3 years. The economic
growth in San Mateo County accelerated and outpaced the state of California
and the nation. The inflation adjusted gross regional product rose 7% in 1996
alone. The unemployment rate in 1997 was 2.8% in San Mateo County vs 6.2%
throughout California.34
SURVEY QUESTIONNAIRE
The survey was conducted in 1998 by a self-administered mailed questionnaire.
An identification code was assigned to allow for follow-up, while protecting
confidentiality. One primary and 2 follow-up mailings were conducted, with
the third mailing preceded by telephone contact to encourage return of the
questionnaire. Surveys were mailed to the members of the SMCMA and were accompanied
by a cover letter written by P.R.A., member of the SMCMA; T.A.R., Co-Director
of the Stanford University Center for Biomedical Ethics; and R. Jay Whaley,
President of the SMCMA.
All questionnaires returned with forwarding addresses were resent. A
total of 381 completed questionnaires were returned, for an overall response
rate of 35.3%. Of this group, 18 did not indicate their current practice setting.
Among the remaining 363 respondents, 113 (31%) indicated a SGM-HMO practice
setting. Assuming only KP physicians indicated practicing in a SGM-HMO, this
is a response rate of 51% for the SGM-HMO physicians in the SMCMA and approximately
40% of all SGM-HMO physicians practicing in the county. The remaining 250
respondents practiced in OBIPs (defined as solo practice, single specialty
groups, multispecialty groups, or urgent care clinics). A total of 861 physicians
in the SMCMA practice outside a SGM-HMO, giving a response rate of 29%, which
is an estimated 24% of actively practicing OBIP physicians in the county.
The questionnaire defined managed care as follows:
"Managed care is care based on networks of providers, ie, HMOs, PPOs, and
IPAs, with selective contracting, pre-negotiated fees, oversight of MD decision-making,
and often, sharing of insurance risk."35, 36
The questionnaire was 4 pages. It inquired about demographic and practice
characteristics including principal specialty, practice setting, managed care
contacts, number of patients seen in an average week, sources of practice
revenue, relative changes in income, sex, and years in practice. When appropriate,
respondents were instructed to provide this information for "now" (1998) and
"5 years ago." Using 5-point Likert scales, physicians indicated (1) their
current degree of satisfaction with practice and patient care issues (from
very dissatisfied to very satisfied); (2) the utility of treatment guidelines
and drug formularies with regard to their effect on physician workload (from
very much harder to very much easier) and on the quality of patient care (from
very strong decrease to very strong increase); and (3) their general perceptions
of managed care and its impact on several practice and patient care issues
(from strongly disagree to strongly agree). The topics covered were derived
from the perceptions of both proponents and opponents of managed care as gleaned
from the literature, and the statements were worded so that neither view was
dominant.
STATISTICAL ANALYSIS
The principal comparison was between physicians practicing in a SGM-HMO
or in OBIPs, either solo, single specialty, or multispecialty.
Demographic information and current practice characteristics were compared
by practice setting (SGM-HMO vs OBIP) as means or proportions, as appropriate.
Practice characteristics in 1998 and 5 years prior were compared within each
practice setting, and physicians not in practice 5 years prior were excluded.
Differences in means and proportions were evaluated with 2-tailed t tests and  2 tests, respectively.
Items that related to the quality of professional practice and items
that related to the quality of patient care were grouped into 2 summary sets.
Both summary sets were composed of subset items relating to professional satisfaction,
the utility of specific tools of managed care, and general perceptions of
managed care—each with its own 5-point Likert scale.
Descriptive statistics for each item in the survey were calculated by
collapsing the 5-point Likert scales to 3 categories: "very dissatisfied/dissatisfied,"
"neutral," and "satisfied/very satisfied" (similar categories were used for
the other Likert scales). Response frequencies for each item are displayed
separately for SGM-HMO and OBIP physicians. The relative odds of SGM-HMO vs
OBIP physicians being satisfied as opposed to neutral or dissatisfied were
calculated for each item. (Again, similar analyses were used for the other
Likert scales.)
Within the quality of professional practice and patient care summary
sets, the average of the 5-point Likert scale responses was calculated for
each of the 3 subsets of items (satisfaction, tools of managed care, and general
perceptions of managed care). The average responses for SGM-HMO and OBIP physicians
within each subset of items were compared.
Overall averages were computed for the quality of professional practice
and the quality of patient care summary sets and were compared by practice
setting using a multivariate analysis of variance. Income change, practice
specialty, years in practice, and sex were included in the analysis to control
for potential confounding factors. Although the overall averages included
items from the 3 different 5-point scales, all of the scales ranged from negative
to positive. The direction of the scale was reversed, when necessary, in order
for a positive view to be consistently represented by a higher score. Cronbach
coefficient  for the quality of professional practice set (
= .89) and the quality of patient care set ( = .90) were sufficiently
high to justify grouping the items in this manner. For an item to be included
in the overall average, we required answers from at least 80% of respondents.
Sixteen items in each set met this criterion. We included in the overall average
only individuals who answered at least two thirds of the items in each summary
set. The average number of items completed for each respondent was greater
than 15, and their individual averages were based on only the items to which
they responded (ie, missing items were excluded). For both of the quality
of professional practice and patient care sets, 309 and 305 respondents, respectively,
met all the criteria outlined above to be included in the multivariate analyses.
RESULTS
DEMOGRAPHIC AND PROFESSIONAL CHARACTERISTICS
The demographic characteristics of the respondents in SGM-HMO and OBIP
groups were generally similar (Table 1),
except that SGM-HMO physicians had been in practice on average 4 years less
than those in OBIPs (since 1982 vs 1978; P = .005).
Correspondingly, the proportion who had been in practice more than 10 years
was lower among SGM-HMO physicians (69%) than physicians in OBIPs (78%).
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Table 1. Demographic and Practice Characteristics*
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Approximately 90% of the respondents who were in practice in 1993 were
in the same setting in 1998. Only 5% of 1998 SGM-HMO physicians had moved
to the 1998 setting from another practice setting, and less than 2% of OBIP
physicians had moved there from an SGM-HMO practice setting. Hence, any changes
reported during the 5-year interval would appear to reflect changes within
the respondents' practices as opposed to changes due to movement between practice
settings.
No significant differences were found (Table 2) between SGM-HMO and OBIP physicians in the number of patient
encounters per week in 1998 (93 vs 87), hours worked per week (48 vs 48),
minutes spent with patients in an average office visit (17 vs 19), percentage
of time spent giving primary care (44% vs 43%), or the annual number of major
surgical procedures performed (60 vs 68). The SGM-HMO respondents experienced
changes in practice characteristics during the preceding 5 years that were
of smaller magnitude and generally opposite in sign compared with OBIP physicians.
The OBIP physicians indicated significant increases between 1993 and 1998
in the number of IPAs to which they "now" belong (up by approximately 2; P<.001), the percentage of patient encounters that are
"now" with HMO patients (up 17%; P<.001), and
the percentage of patients who are seen through capitation (up 22%; P<.001). In addition, OBIP physicians reported a small
but significant decrease in minutes spent in an average office visit (down
1.4; P<.001). The SGM-HMO physicians also reported
a decrease in minutes spent per patient visit (down 0.5), but the decrease
was not statistically significant. Differences between 1993 and 1998 in the
number of patients seen per week, the number of hours worked per week, the
number of surgical procedures per year, and the percentage of practice time
spent giving primary care were not statistically significant in either group.
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Table 2. Reported Practice Characteristics in 1998 and Change From
1993 for Staff Group Model Health Maintenance Organization (SGM-HMO) and Office-Based
Independent Practice (OBIP) Physicians*
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A decrease in practice revenue was much more prevalent among OBIP physicians
than SGM-HMO physicians (61% vs 47%; P = .08), although
a substantial proportion of both groups experienced decreases (especially
when the effect of inflation is considered for those whose income remained
constant) (Figure 1). A significantly
higher proportion of OBIP physicians reported declines in income greater than
25% (27% vs 4%; P<.001). The major shift in primary
revenue source for OBIP physicians from 1993 to 1998 (Figure 1 inset) was from fee-for-service (down from 56.1%-29.4%)
to HMOs and PPOs (up from 36.5%-63.1%).
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Figure 1. Percentages of respondents reporting
income changes between 1998 and 1993 in various ranges by practice setting.
The figure inset indicates the primary sources of revenue in 1998 for office-based
independent practice (OBIP) physicians and their sources of revenue in 1993
(as reported in 1998). SGM-HMO indicates staff group model health maintenance
organization; PPOs, preferred provider organizations.
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PHYSICIAN PERCEPTIONS OF THE QUALITY OF PROFESSIONAL PRACTICE
When average scores for the subsets of items pertaining to the quality
of professional practice were compared (Figure
2), SGM-HMO physicians were significantly more satisfied than OBIP
physicians (mean, 3.3 and 2.7, respectively; P<.001),
had more positive views of the effects of treatment guidelines and drug formularies
on workload (mean, 3.5 and 2.2; P<.001), and had
more favorable perceptions of the professional impact of managed care (mean,
2.6 and 1.7; P<.001). Both SGM-HMO and OBIP physicians
were most satisfied with the trust patients had in them (71% and 61% were
satisfied, respectively) and most dissatisfied with their freedom to spend
time with patients (47% and 65% dissatisfied, respectively), and their freedom
to care for patients who require heavy use of time and resources (42% and
69% dissatisfied, respectively). The SGM-HMO physicians were particularly
more satisfied than OBIP physicians with time spent on administrative matters
(41% satisfied/24% dissatisfied vs 9% satisfied/79% dissatisfied; odds ratio
[OR], 7.0); their ability to establish long-term relations with patients (72%
satisfied/10% dissatisfied vs 39% satisfied/42% dissatisfied; OR, 4.0); and
ethical stresses related to patient care (48% satisfied/25% dissatisfied vs
21% satisfied/53% dissatisfied; OR, 3.5).
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Figure 2. Quality of professional practice:
comparison of item response frequencies for staff group model health maintenance
organization (SGM-HMO) and office-based independent practice (OBIP) physicians.
Data were based on a 5-point Likert scale indicating physicians being very
dissatisfied/dissatisfied (1 or 2), neutral (3), or satisfied/very satisfied
(4, 5). Similar simplifications were used for other data based on the Likert
scales (harder/easier and disagree/agree). The asterisk indicates unadjusted
odds ratios (ORs) computed by the proportion of SGM-HMO to OBIP physicians
who indicated satisfied/very satisfied (or easier/very much easier, agree/strongly
agree) vs all other responses; dagger, the average Likert response for each
set of related items (compared by univariate analysis); and double dagger,
items reflected so that a more favorable view is indicated by a higher Likert
score.
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Treatment guidelines and drug formularies were viewed differently in
terms of their effects on physician workload. Treatment guidelines made work
easier for SGM-HMO physicians (56% easier to 12% harder) but relatively harder
for OBIP physicians (4% easier to 39% harder). Likewise, drug formularies
made work easier for SGM-HMO physicians, who confront only 1 formulary (42%
easier to 18% harder) and harder for OBIP physicians, who confront many formularies
(1% easier to 64% harder).
The OBIP physicians clearly had more negative perceptions of managed
care than did SGM-HMO physicians, but negative views were common in both settings.
Both groups disagreed with the assertion that managed care improved economic
and social standing compared with other types of professionals (86% OBIP and
62% SGM-HMO). However, OBIP physicians were much more likely than SGM-HMO
physicians to agree with the statement that managed care reduces physician
satisfaction (93% OBIP and 60% SGM-HMO) and to disagree that it improves professional
relationships with other colleagues (86% OBIP and 37% SGM-HMO). Only 11% of
OBIP physicians and 22% of SGM-HMO physicians agreed that their circumstances
had improved compared with 5 years ago; 75% and 50%, respectively, disagreed.
To summarize the information in the item responses in Figure 2 and to facilitate investigation of the relationship of
practice setting, income change, practice specialty, years in practice, and
sex to responses, an average "summary score" for the quality of professional
practice items was calculated as previously described. Scores for the quality
of professional practice were independently associated with practice setting
and income decreases, but not with practice specialty (primary care vs specialty
care), or years in practice and sex (Table
3). The SGM-HMO physicians had higher quality of professional practice
scores than OBIP physicians (adjusted means, 3.0 and 2.2, respectively; P<.001). Physicians whose income had decreased had lower
scores (mean, 2.3) than physicians whose income had increased (mean, 2.6)
or remained the same (mean, 2.7) (P<.001). The
2-way interactions among practice setting, income changes, and practice specialty
were not significant.
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Table 3. Quality of Professional Practice and Patient Care Summary
Scores by Practice Setting, Income Changes, Practice Specialty, Years in Practice,
and Sex*
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PHYSICIAN PERCEPTIONS OF THE QUALITY OF PATIENT CARE
When average scores for the subsets of items pertaining to the quality
of patient care were compared (Figure 3),
SGM-HMO physicians were significantly more satisfied than OBIP physicians
(mean, 3.7 and 2.8, respectively; P<.001), had
more positive views of the effects of treatment guidelines and drug formularies
on the quality of patient care (mean, 3.5 and 2.5; P<.001),
and had more favorable perceptions of the impact of managed care on patient
care (mean, 3.2 and 2.0; P<.001). Considering
the items individually, SGM-HMO and OBIP physicians were most satisfied with
the quality of care they personally offered (71% satisfied and 44% satisfied,
respectively). The SGM-HMO physicians were more satisfied than OBIP physicians
with their ability to provide the care patients want (44% satisfied/27% dissatisfied
vs 14% satisfied/70% dissatisfied, respectively; OR, 4.8) and their ability
to obtain the care patients need (69% satisfied/14% dissatisfied vs 19% satisfied/62%
dissatisfied; OR, 9.5).
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Figure 3. Quality of patient care: comparison
of item response frequencies for staff group model health maintenance organization
(SGM-HMO) and office-based independent practice (OBIP) physicians. The data
are based on a 5-point Likert scale indicating being very dissatisfied/dissatisfied
(1 or 2), neutral (3), or satisfied/very satisfied (4, 5). Similar simplifications
were used for other data based on the Likert scales (harder/easier and disagree/agree).
Asterisk indicates unadjusted odds ratios (ORs) computed by the proportion
of SGM-HMO to OBIP physicians who indicated satisfied/very satisfied (or easier/very
much easier, agree/strongly agree) vs all other responses; dagger, the average
Likert response for each set of related items (compared by univariate analysis);
and double dagger, items reflected so that a favorable view is indicated by
a higher Likert score.
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Treatment guidelines and drug formularies again were viewed differently
by the 2 groups of physicians in terms of how they affect the quality of patient
care. The SGM-HMO physicians indicated that treatment guidelines increased
the quality of patient care (58% increased/6% decreased), whereas OBIP physicians
overwhelmingly believed treatment guidelines had no effect on patient care
(83%). Drug formularies were generally considered to increase the quality
of patient care for SGM-HMO physicians (33% increased/11% decreased) although
more than half believed they had no effect. The majority of OBIP physicians
viewed formularies as having a negative effect on the quality of patient care
(1% increased/55% decreased).
The OBIP physicians had more negative perceptions of the impact of managed
care on the quality of patient care than did SGM-HMO physicians. In particular,
OBIP physicians agreed that managed care reduces the quality of care for well
patients (51%), reduces patient satisfaction (86%), decreases access to specialists
(88%), and overemphasizes the needs of populations over the needs of individual
patients (78%). They disagreed that managed care, as practiced in 1998, improves
the quality of care for sick patients (81%), increases access to care for
covered patients (76%), improves preventive care for covered patients (41%),
and improves the level of care offered by most physicians (84%). The SGM-HMO
physicians tended to be neutral or more equally divided between positive and
negative views of the impact of managed care, except they tended to believe
managed care improves preventive care and the quality of care for well patients.
Only 5% of OBIP but 23% of SGM-HMO physicians agreed that their patients are
better cared for today than they were 5 years ago; 70% and 32%, respectively,
disagreed.
A summary score for the quality of patient care items in Figure 3 was calculated as previously described. Scores for the
quality of patient care items were independently associated with practice
setting, income decline, and practice specialty, but not with years in practice
and sex (Table 3). The SGM-HMO
physicians had a higher quality of patient care score than OBIP physicians
after controlling for the other variables (adjusted means, 3.3 and 2.3, respectively; P<.001). Physicians whose income had decreased had a
significantly lower quality of patient care score than physicians whose income
had increased (adjusted means, 2.5 and 2.8, respectively; P = .002). Primary care physicians had a higher score than specialty
physicians (adjusted means, 2.7 and 2.5, respectively; P = .01). The 2-way interactions of practice setting, income changes,
and practice specialty were not significant.
COMMENT
This study found that physicians in a SGM-HMO had more positive perceptions
of the quality of their professional practice and of patient care than did
physicians practicing in OBIPs in the same county. The influence of practice
setting on physician perceptions persisted even after controlling for changes
in income. The SGM-HMO physicians were specifically more satisfied than OBIP
physicians with time spent on administrative matters, ethical stresses in
practice, and with their ability to obtain care patients need and want. Physicians
in primary care and specialty practices did not view differently the quality
of their professional practice although primary care physicians had more positive
perceptions of the quality of patient care than specialists.
As expected, physicians who reported income declines between 1993 and
1998 had more negative perceptions of the quality of their professional practice
and of patient care than physicians whose income had increased or stayed the
same. Decreases in income were widespread, especially for OBIP physicians,
but decreases had the same effect regardless of practice setting (ie, the
interactive effect of practice setting and income was not significant). The
magnitude and prevalence of a decline in real income is further seen in the
proportions whose income remained unchanged, since these groups would have
experienced some decrease in purchasing power due to inflation between 1993
and 1998. Considering that San Mateo County is prospering economically and
is one of the wealthier counties in California, the decoupling of physician
income from that of the rest of the community is striking. Furthermore, a
marked increase in income for nonrespondents would have to be present to discount
this finding as the product of a respondent bias.
Practice setting also significantly affected how physicians viewed the
utility of tools commonly adopted by managed care, ie, treatment guidelines
and drug formularies. The SGM-HMO physicians saw these as positive contributors
to easing physician workload and increasing the quality of patient care. In
contrast, OBIP physicians, unlike SGM-HMO physicians, deal with multiple,
conflicting guidelines and formularies typically developed without their input.
They held strikingly negative views, particularly of drug formularies. Though
little is known about the application of guidelines in practice37, 38
and many physicians have mixed feelings about them,39
there is a preference for guidelines that are internally developed.40
Between 1993 and 1998, OBIP physicians reported significant increases
in the proportion of patients they saw who were insured under various managed
care plans (IPAs, PPOs, and HMOs) and, consequently, in the proportion of
revenue derived from these plans. These reported changes were consistent with
documented developments in the San Mateo County health care marketplace. Neither
group of physicians indicated increases in hours worked per week or the number
of patient encounters per week. Neither group, therefore, appears to have
succeeded in "trading discounts for volume," at least per physician, as originally
envisioned under managed care.41 Even the small
mean decrease in minutes spent with patients, per visit, by OBIP physicians,
without significant offsetting changes in the number of patient encounters
or in hours worked per week, suggests that administrative time increased at
the expense of time spent in patient care. Indeed, OBIP physicians were highly
dissatisfied with the amount of time spent on administrative matters, whereas
SGM-HMO physicians were generally satisfied. Unfortunately, the allocation
of professional time was not objectively assessed in this study.
Physicians in an SGM-HMO work within a single, centralized organization
with uniform rules and geographic proximity; however, OBIP physicians, belong
to IPAs with up to a dozen HMOs, each of which may offer many different contracts
and benefit packages with patients. The aggregate number of differing HMO
contracts with patients approached 2000 in 1 IPA, requiring significant time
and expense to manage (Brian Roach, MD, oral communication, January 1999).
It has been hypothesized that the myriad managed care contracts, approvals,
formularies, and guidelines affecting physicians who do not practice in a
traditional SGM-HMO would result in a less satisfied group of physicians with
more negative perceptions of the quality of patient care provided through
decentralized managed care.42 The present results
are consistent with this hypothesis.
We believe the degree of physician distress we have found in San Mateo
County for physicians in OBIP is real. It may also be significant for patient
care in 2 respects. First, these physicians are claiming to be currently dissatisfied
with the quality of patient care being provided. Second, their distress may
affect their ability to care for patients and advocate on their behalf. Grumbach
et al43 have stated "high quality care is unlikely
to flourish in an environment that leaves physicians demoralized." Poor work
satisfaction has been associated with careless prescribing patterns.44 Kassirer13 adds that
the extent of discontent among physicians has not been widely studied nor
does there appear to be much interest in doing so on the part of payers, insurers
and legislators, who must "stop pretending that doctor discontent doesn't
matter." It is well known that "a happy staff leads to happy customers,"45, 46 but neither managers nor consumers
seem to have considered physician discontent as an explicit threat to their
own well-being.14, 47, 48
Physician criticism of managed care has been portrayed as economically self-serving,49 and physician reports of reductions in the quality
of care may be dismissed as biased by their own loss in income, as is often
done. However, physicians do have an important proximity to the clinical situation
and a valuable perspective to contribute. It could be argued that the handling
of physicians under managed care to date has violated one of Drucker's50 cardinal precepts for dealing with knowledge workers:
"To find out how to improve productivity, quality, and performance, ask the
people who do the work."
The decoupling of physician income from the general economy has taken
place in San Mateo County during good times in a wealthy county. This may
raise the question of how physicians and patients will fare under managed
care in bad times and in poorer locales with typically sicker patients who
have greater social and medical needs. In the present forms of managed care,
the traditional SGM-HMO model may produce happier physicians with a better
perception of the state of patient care and with greater allegiance to managed
care itself. However, the present study obviously cannot address the objective
similarities or differences between practice settings in the actual quality
of care provided. Although SGM-HMO and OBIP physicians both experienced income
declines, OBIP physicians were more vulnerable to market pressures and experienced
a higher prevalence and more substantial income decline than physicians in
SGM-HMOs. Powerful employer groups such as CalPERS (the state employee retirement
fund) and the Pacific Business Group on Health exerted a strong downward pressure
on health insurance premiums during the study period.51
Financial pressure was also increased by physician participation in multiple
IPAs, which rose on average more than 75% for OBIP physicians in this study.
A peculiar form of competition can result from such pressures in which physicians
essentially compete against themselves. This occurs when IPAs with overlapping
physician membership negotiate for the same contracts with payers. One IPA
would refuse to sign only to have another IPA accept the contract for either
the same or lesser reimbursement.52 Antitrust
considerations do not permit collective action by the IPAs. "Fair Capitation"
legislation, introduced in 1998 in California as Senate Bill 317 (SB-317;
Senator Calderon, D, Montebello), which would have required capitation rates
to be based on an actuarially sound basis rather than "bottom-fishing" for
the lowest attainable price, was opposed by the managed care industry and
ultimately vetoed by former Governor Pete Wilson.53, 54
We did not ask OBIP physicians why they joined multiple IPAs. Though
disadvantageous in contract negotiations, multiple IPA participation provides
access to more insurance plans and increases access to patients because HMOs
typically contract selectively. Presumably, access to patients was the principal
motivation, given the stated level of dissatisfaction with managed care. This
interpretation is consistent with one national study that found noninstitutional
HMO participation to be motivated primarily by a desire not to lose patients
rather than by more positive reasons.55
Kaiser-Permanente, however, was not immune to the managed care climate
affecting the rest of San Mateo County. In 1993, KP lost members for the first
time.56 In 1997 and 1998, KP experienced its
first-ever financial losses57 and a downgrading
of the investment quality of its debt.58 In
response, new construction projects were stopped before completion,59 a moratorium was declared on inducting new physicians
into partnership, and salaries of some physicians were reduced. Kaiser-Permanente
also terminated unprofitable East Coast plans. The interdependence of the
KP SGM-HMO and the OBIP economies has been previously discussed in terms of
shared benefits during the period of medical prosperity that followed World
War II.60 This study supports the notion that
the economic hardship produced by competitive pressures is shared as well.61
Our results suggest that physicians working in the traditional managed
care model with its mixture of professional inputs and oversights are happier
than those who are subject to conflicting externally imposed guidelines, formularies,
and approval processes over which they have no meaningful input. Would all
physicians, therefore, be more satisfied in SGM-HMOs? Since KP physicians
are self-selected, it is not known whether others in the community would react
as they do. Physicians in SGM-HMOs may be individuals who are more comfortable
with the current mix of freedoms and controls that are inherent in a SGM-HMO62, 63; and OBIP physicians may have opposite
biases.64 In addition, it is unclear that the
public would favor SGM-HMO practice as the only alternative.
Our study has a number of limitations regarding response rate and selection
bias. The response rate of 113 of SGM-HMO physicians (51%) and 250 of OBIP
physicians (24%) in the SMCMA places limits on confidence in the generalizability
of the results. We note, however, that responses in the first 2 waves of questionnaires
were not appreciably different from the third wave, as might be expected if
the likelihood of response were strongly related to the views expressed. Furthermore,
the nonresponding OBIP physicians would need to be much more content with
their practices than their responding colleagues to alter significantly the
results. The 189 additional OBIP respondents needed to match the 51% response
rate of SGM-HMO physicians would require a mean quality of professional practice
score of approximately 3.7 (vs 2.2 for those who responded) and a mean quality
of patient care score of 4.2 (vs 2.3) to negate statistically significant
differences found in this study. This possibility is remote. It is also possible
that higher levels of disaffection among OBIP physicians may have been partly
responsible for their significantly lower survey response rate. The rate disparity
may be in part a reaction to the proliferation of burdensome practice surveys
used by managed care organizations, pharmaceutical benefit managers, and oversight
agencies such as the National Committee for Quality Assurance and its Health
Plan Employer Data and Information Set. Kaiser-Permanente physicians, working
with only a single health plan using a single drug formulary, are less subject
to such intrusions. The OBIP physicians also indicated much more dissatisfaction
with their administrative burdens, perhaps making them less cooperative in
responding to yet another detailed survey. If this is true, the present results
may actually underestimate the level of dissatisfaction among OBIP physicians.
The KP Medical Group is the only SGM-HMO in San Mateo County. It is
conceivable that different SGM-HMOs may affect physician satisfaction differently.
However, as the largest such organization, the views of KP clinicians are
an important benchmark in looking at other organizations and practice settings.65
This study did not gather actual income data or try to establish what
is appropriate physician compensation. Conceivably, physician earnings in
San Mateo County were abnormally high in 1993, thereby negating some of the
significance of the relative income decline during the next 5 years. However,
anecdotal evidence of young physicians now leaving San Mateo County for economic
reasons argues otherwise. Furthermore, West Coast physicians' net income averages
10% to 15% lower than elsewhere in the country.66
Actual work time and how much of that was spent seeing patients vs doing administrative
tasks were also not measured directly. There was no breakdown of the frequency
of new patient visits as compared with follow-up appointments in the 5-year
comparison. Finally, it is likely, based on basic research on the ability
to estimate change, that perceptions of changes that have occurred from 5
years ago are more influenced by present satisfaction than by the actual circumstances
5 years ago.67 When evaluating changes in physicians'
practices, we therefore cannot assume that the reported changes are valid
estimates of the true differences between present and past perceptions as
would have been measured in a survey done in 1993.
In conclusion, a comparison of physician perceptions of professional
and patient care issues in a climate of increasing managed care showed considerable
difference in response among those practicing in a SGM-HMO and those in OBIPs.
The former are more satisfied, view the utility of treatment guidelines and
drug formularies more positively, and perceive managed care more favorably
than physicians who deal with managed care in a decentralized fashion. Although
decline in income also negatively affects perceptions of the quality of practice
and patient care, the effect of practice setting is not eliminated by adjusting
for differences in income change. Within an otherwise robust local economy,
more than twice as many physicians reported a decrease rather than an increase
in income during the past 5 years despite working approximately the same number
of hours per week and seeing about the same number of patients. Physicians
outside a traditional SGM-HMO were dissatisfied with the time spent on administrative
matters, the ethical stresses related to patient care, and their ability to
obtain care that patients need and want. These results suggest that the structure
of managed care plans for physicians not in a traditional SGM-HMO is suboptimal
and negatively affects physician perceptions of the quality of their professional
practice and the quality of care offered to patients.
AUTHOR INFORMATION
Accepted for publication July 20, 2000.
This work was supported by the Stanford University Center for Biomedical
Ethics and the San Mateo County Medical Association, and funded by the Li
Ka Shing Foundation Limited, the Stanford Center for Biomedical Ethics, and
the San Mateo County Medical Association.
We thank Diane McGrew, MD, for her valuable editorial comments and Carolina
Mejia for her help with the statistical analysis.
From the Departments of Medicine (Mr Chehab, Ms Panicker, and Drs Wilson
and Raffin), Health Research and Policy (Drs Baker and Wilson), and Center
for Biomedical Ethics (Drs Alper and Raffin), Stanford University School of
Medicine, Stanford, Calif; Department of Medicine, University of California
at San Francisco (Dr Alper); Palo Alto Medical Foundation, Research Institute,
Palo Alto, Calif (Dr Wilson); and San Mateo County Medical Association, San
Mateo, Calif (Dr Alper).
Corresponding author and reprints: Thomas A. Raffin, MD, Division
of Pulmonary and Critical Care Medicine, Center for Biomedical Ethics, Room
H3151, Stanford University School of Medicine, Stanford, CA 94305-5236.
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