Jones & Bartlett Learning Health Blog

    Author Peter Kongstvedt Comments on the New 6th Edition of His Best-Selling Book, Essentials of Managed Health Care

    Posted by admin on Mar 7, 2012 2:58:52 PM

    Kongstvedt - Essentials of Managed Health Care, 6th Ed.

    Reprinted from the Introduction of the new 6th Edition of

    Essentials of Managed Health Care , by Peter Kongstvedt, available on 4/2/2012.  Qualified instructors are invited to request review copies.
    The Sixth Edition is the most significant structural overhaul of this book since the Second Edition morphed into the Third back in 1996. And while it is a hefty volume at just under a half a million words, it remains svelte in comparison to the fourth and, as of 2001 the last edition of its antecedent, The Managed Health Care Handbook, which had three times that. This does not reflect a shrinking health care sector nor a movement from complexity to simplicity, since neither is the case. It does reflect the commitment of the book’s contributors to providing a broad and sufficiently detailed overview of the key elements of health insurance and managed health care to meet the needs of one or more of its types of readers. At the same time, it means that some things are left out. As the editor, I bear full responsibility for any decisions about what to include and what to exclude, as well as any errors that may be contained in this text.
    Who Benefits from this Book?
    This book is much like the original Swiss Army Knife® designed by Karl Elsener in 1891, which had a cutting blade, a screwdriver, a can opener and a reamer (or awl).  That tool served four different purposes depending on the needs of the user, and this book also serves four different purposes, depending on the needs of the reader. Unlike the knife, however, there is considerable overlap in how those purposes are served. The four primary users of this book overlap in many ways, and are loosely categorized as follows:
    Teaching and Academics
    This represents the largest number of users, but there are differences in how it might be used in a graduate program. Some topics will be of considerable use for classroom teaching such as the chapters on history, the types of payers and integrated health systems, network structure, payment, care management, and so forth. But even the operational chapters can be useful since even now it is easier to think we know how these things are done and why, when in fact what we know are assumptions, not reality.
    Day-to-Day Payer Operations and Administration
    Those who work in the payer industry or in other industries that provide services to payers benefit the most from those chapters that focus on operations. As becomes quickly apparent, all operations are interconnected and what affects one part of a payer organization often ripples out to exert an effect on other parts. For example, errors in eligibility affect claims payment, provider services, consumer services and financial management. Beyond the “Tab A goes into Slot B” descriptions of operational business processes, knowing as well the background about why operations are carried out as they are will go a long way in understanding the business as a whole. This is especially the case for those in management, where understanding the whole is a requirement for assuming greater responsibilities.

    Health Policy

    Certain sections of the book are right in the middle of the world of health policy, and overlap with those most useful in academics and teaching. But the book provides something else, something often missing in health policy resources, and that’s a picture of what the world actually looks like as a whole. Policy and theory are valuable and critical for our future, but policy that ignores the incredibly messy and complex reality of the sector, or that is built upon assumptions that “are widely understood” but are in fact thoroughly misunderstood, will produce elegant but ultimately useless results. Like a hand-carved, solid walnut SCUBA tank. The systems and operational processes we have today were not found under a loose board, they all came about in direct or indirect response to policy decisions, including policy omissions, whether intended or not.

    Health Administration

    Those who are preparing to enter the world of health administration or are already working in it, regardless of type of provider, public health or private, and whose organization in any meaningful way interacts with commercial payers will benefit from knowing how payers actually operate, why they do what they do and under what circumstances. Just as there is great heterogeneity in types of providers and provider organizations, even when they fall under the same descriptive type, there is equal heterogeneity not only between payers but between the different business units within any payer organization. By understanding the payer environment better, and knowing at least the basics of certain operations, legal requirements and constraints, the business-to-business relationship has a better chance of working at least a little better.

    There is another reason for those in health administration to know more about the payer sector, and that is the continually evolving sector itself. At the height of the managed health care boom in the late 1980s through the late 1990s, providers sought to take on more risk, and even to “cut out the middle man.” Many did not survive that decision, though some did quite well. Those times are not likely to be repeated, but recently we’ve seen a stronger push to make providers more accountable for costs, and costs are related to risk.

    Health systems, especially those with regional market strength and those that now employ a large number of physicians have been able to negotiate higher prices and not worry much about cost control. That is ultimately an unsustainable model though, and with Medicare leading the charge, the flow of money will over time be affected more and more by overall performance (which is not the same as “Pay-for-Performance” discussed in Chapter 5). And it is managed health care methodologies that will be used to do it, even if they are referred to under a kinder and gentler name.

    Others Who May Benefit

    The book has been useful beyond the four primary constituencies noted above. The legal profession has often turned to it to be better informed both in matters involving litigation or arbitration, and in constructing legal agreements that encompass specific operational aspects between a payer and other parties. Regulators have also used the book, particularly when looking at regulations with a potential impact beyond the intended target. Journalists and non-academic writers may turn to it to gain a better understanding of some aspect of the industry that is the subject of an article or story. It is fair to say that the book has been used by individuals in all parts of the health sector, not just those noted here. It has also been used in a number of other nations around the globe as they look to addressing issues similar to our own, even if their overall system differs.

    How is the Book Structured?

    The book has thirty chapters, divided into six parts. They are:
    Part One: Introduction to Health Insurance and Managed Health Care
    The three chapters that open the book provide a broad overview of the historical roots of health insurance and managed health care in the United States; the different types of insurers, managed care organization and integrated delivery systems; and their basic governance and management structure. They are all updates of prior versions, but the updates found in the first two of these are considerable.

    Part Two: The Network.

    Part Two underwent a major structural overhaul for this edition, and is composed of three long chapters that describe in some detail how payer networks are structured; the astonishing array of provider payment methodologies and payment modifiers, and how different providers respond to them; and the core structural elements of a contract between a payer and a provider that support all of those elements. These topics longer completely separate facilities, professionals and ancillary services, but look at common elements first, and those specific to type of provider second. It also separates payment from all the other aspects of network development, structure and management in order to keep the focus on each. The content within each chapter has been updated as appropriate, and expanded considerably to address new elements and new dynamics because when it comes to payment, we are all endlessly inventive. Finally, the chapters may address these topics from a payer point of view, but in our currently evolving system, much of what they cover may migrate to new types of organizations, including provider organizations.

    Part Three: Utilization and Quality Management.

    Along with Part Two, Part Three makes up what is generally considered to be managed health care. It addresses basic utilization management (UM), a topic that has been significantly restructured and expanded in order to illuminate the varied elements of UM that are interconnected but often treated as though they are not. Part Three also addresses the more advanced and specialized forms of UM, including those focused on specific types of utilization such as behavioral health and the prescription drug benefit.

    Part Three also sees a new contributor addressing a topic that last appeared in the Fourth Edition, which is changing physician behavior, something that has taken on renewed relevance as physicians increasingly are employed by health systems and payers. It concludes with a chapter focusing on quality management (QM) in payer organizations, and on accreditation of health plans and related services, something that is deeply tied to QM. As in Part Two, the topics are addressed from a payer point of view, but they all are relevant to providers and others as our system evolves and greater accountability – and financial performance – are diffused out into the health sector.

    Part Four: Administration.

    The eight chapters of Part Four are the most operationally oriented chapters in the book, describing the nuts and bolts of non-clinical administration. It also includes two entirely new topics never before addressed in this book: Enrollment and Billing, and Fraud and Abuse. The chapter on information technology has been completely rewritten and expanded in scope to better cover multiple elements of what can only be described as the backbone of any payer organization. The material covered in this section may not make up the bulk of the book, but these chapters describe what makes up the bulk of all payer operations.

    Part Five: Special Market Segments.

    Where the book overall looks at the why and how of managed care, Part Five looks at four specific and unique market segments for payers, which are Medicare Advantage, Managed Medicaid, Military Managed Health Care, and Managed Health Care in a Global Setting. Of particular importance, the chapters on Medicare Advantage and Medicaid managed health care have been completely rewritten by new authors, and both are expansive in scope to address all of the most important elements of managed health care in those programs.

    Part Six: Laws and Regulations.

    The three chapters here have been entirely rewritten by a new author, and provide a succinct review of the state and federal legal and regulatory underpinnings affecting health insurance and managed health care, including the Patient Protection and Affordable Care Act (ACA), a law passed but not yet fully implemented at the time this is being written. At nearly 1,000 pages, the ACA affects all health sectors, but its impact on health insurers and health benefits plans is far greater than its impact on any other sector, so that chapter is confined to just those portions of the ACA.

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