Practice Guidelines: Managed Care Plans Customize Guidelines to Meet
Local Interests (Letter Report, 05/30/96, GAO/HEHS-96-95).

Pursuant to a congressional request, GAO reviewed how managed health
plans make use of existing clinical practice guidelines.

GAO found that: (1) clinical practice guidelines promote greater
uniformity within physician networks, encourage improved efficiency and
clinical decision-making, and eliminate unnecessary care; (2) several
health plans have adopted clinical practice guidelines to control costs,
improve performance on standardized measures, receive accreditation, and
comply with regulatory requirements; (3) due to time and fiscal
constraints, many health plans customize published clinical guidelines
rather than generate original guidelines; (4) physicians are more likely
to use a clinical practice guideline if it is developed by local health
providers; (5) managed health plans customize existing clinical practice
guidelines to suit alternative treatments, available resources,
population needs, and format and currency concerns; (6) while health
plans modify existing clinical practice guidelines to varying degrees,
extensive changes could jeopardize the guidelines' effectiveness; and
(7) some health plans would prefer that the federal government publish
and update evidence on medical conditions and services, develop useful
practice guideline tools, and perform outcomes research and medical
technology assessments that would help them to develop, modify, and
update their guidelines.

--------------------------- Indexing Terms -----------------------------

 REPORTNUM:  HEHS-96-95
     TITLE:  Practice Guidelines: Managed Care Plans Customize 
             Guidelines to Meet Local Interests
      DATE:  05/30/96
   SUBJECT:  Institution accreditation
             Health care cost control
             Patient care services
             Managed health care
             Health services administration
             Health resources utilization
             Health maintenance organizations
             Physicians
             Medical economic analysis
IDENTIFIER:  Medicare Program
             Medicaid Program
             
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Cover
================================================================ COVER


Report to the Chairman, Subcommittee on Health, Committee on Ways and
Means, House of Representatives

May 1996

PRACTICE GUIDELINES - MANAGED CARE
PLANS CUSTOMIZE GUIDELINES TO MEET
LOCAL INTERESTS

GAO/HEHS-96-95

Practice Guidelines

(108243)


Abbreviations
=============================================================== ABBREV

  AHCPR - Agency for Health Care Policy and Research
  HEDIS - Health Plan Employer Data and Information Set
  HIV - human immunodeficiency virus
  MCO - managed care organization
  NCQA - National Committee on Quality Assurance
  NIH - National Institutes of Health
  USPSTF - U.S.  Preventive Services Task Force

Letter
=============================================================== LETTER


B-265993

May 30, 1996

The Honorable William M.  Thomas
Chairman, Subcommittee on Health
Committee on Ways and Means
House of Representatives

Dear Mr.  Chairman: 

Inappropriate use of medical services can be costly and raise quality
of care concerns.  For example, a 1988 study found that 14 percent of
bypass surgeries were performed inappropriately.  To narrow the gap
between current and optimal practice, some federal agencies and other
organizations develop clinical practice guidelines on the best
practices for effective and appropriate care. 

Although much has been written about the process of guideline
development, little is known about how practice guidelines are used. 
Because managed care plans, which employ various techniques intended
to reduce inappropriate care, are likely sites of guideline use, you
asked us to examine (1) what purposes clinical practice guidelines
serve and (2) how health plans make use of already published
guidelines developed by federal agencies and other organizations. 

To develop this information, we interviewed the medical directors at
19 individual managed care plans.  We used a judgmental sample to
select plans that varied in total enrollment, geographic region, and
organizational characteristics.  The combined enrollment of the 19
health plans we contacted was about 7 million members, with
individual plan membership ranging from 5,100 to 2.2 million members. 
The plans are located in California, Florida, Illinois, Maryland,
Massachusetts, Minnesota, Virginia, and Washington.  The health plans
represent different types of health maintenance organizations,
including staff and group, independent practice association, and
network or a mix of models.  We also contacted two corporate health
plan chains.  Because this was not a representative sample of managed
care organizations, our results cannot be generalized to the entire
managed care community.  (See the appendix for a list of managed care
plans we contacted.)

We also reviewed the professional literature on clinical practice
guidelines, including user surveys sponsored by public and private
organizations.  In addition, we consulted with representatives from
medical specialty societies, condition-specific organizations, the
Agency for Health Care Policy and Research (AHCPR) of the Public
Health Service, and national quality of care experts on issues
relating to guidelines.  We conducted our review from July 1995 to
March 1996 in accordance with generally accepted government auditing
standards. 


   RESULTS IN BRIEF
------------------------------------------------------------ Letter :1

At the managed care plans we reviewed, guidelines served as a tool to
help the plans manage physician practice.  In selecting aspects of
physician practices that could be improved through the use of
guidelines, plans identified "problem areas"--that is, those services
or conditions that are high cost, high medical liability risk, and
high incidence for their patient population.  Plans also identified
conditions for which practices varied widely among their network
physicians.  Guidelines selected using these criteria may help plans
moderate expenditures and improve their performance across key
quality measures in comparison with other plans. 

Health plans cited their reliance on federal and other published
guidelines as references for producing their own guidelines. 
However, most plans did not adopt published guidelines--whether
federal or from other sources--"as is" but modified them for a
variety of reasons.  Because published guidelines lacked local
clinical input, nearly all plans involved their network physicians in
the process of adapting guidelines.  Plans also customized guidelines
to meet other organizational needs.  First, guidelines may not always
recommend the most cost-effective therapeutic approaches.  Second,
some published guidelines were tailored to fit local resource
constraints.  Third, guideline recommendations may not always apply
to the demographic characteristics of the plan's enrolled population. 
Fourth, some published guidelines were too long or included graphics
and algorithms that were too complex to be useful to busy physicians. 
Finally, guidelines may need to be updated to reflect the most
current information. 

For these reasons, plans assert that local adaptation of published
guidelines is largely inevitable and may be useful.  As a result,
some plans changed the guidelines' presentation, whereas others
customized aspects of the recommended treatment.  Some experts point
out that certain modifications may compromise the integrity of the
guidelines and undermine intended improvement in how specific
conditions are managed. 

Plan managers we contacted commended federal agencies for issuing
guidelines.  However, they cited concerns about the usefulness of
multiple guidelines on the same topic that contain conflicting
recommendations.  They also stressed the need for more assessments of
medical technologies' impact on patient outcomes.  They suggested
that the federal government assume a greater role in funding outcomes
research and providing summaries and evaluations of scientific
evidence to support local plan guideline development. 


   BACKGROUND
------------------------------------------------------------ Letter :2

The Institute of Medicine, chartered by the National Academy of
Sciences, has defined practice guidelines as systematically developed
statements that assist practitioners in making decisions about
appropriate health care for specific clinical conditions.  For
example, guidelines are available on such topics as the length of
hospital stay for maternity care, the need for back surgery, and the
management of pediatric asthma.  Guidelines are intended to help
physicians and others by crystallizing the research in medical
literature, evaluating the evidence, applying the collective judgment
of experts, and making the information available in a usable form. 
They are more often written as acceptable therapy options than as
standardized practices that dictate specific treatments.  Unlike
standards of care that have few accepted variations in
appropriateness, most guidelines are expected to have some variations
because improved outcomes are not necessarily linked by definitive
scientific evidence.  Where there is a lack of scientific evidence,
some organizations make recommendations that reflect expert opinion,
while others recommend tests or procedures only when convincing
scientific evidence of benefit exists. 

Many public and private organizations have been developing guidelines
for decades.  About 75 organizations have developed over 2,000
guidelines to date.\1 The federal government supports the development
of clinical practice guidelines through AHCPR,\2 the National
Institutes of Health (NIH), the Centers for Disease Control and
Prevention, and the U.S.  Preventive Services Task Force (USPSTF).\3
Private guideline efforts have been undertaken by physician
organizations, such as the American Medical Association; medical
specialty societies, such as the American College of Cardiology;
private research organizations, such as RAND Corporation; and private
associations, such as the American Heart Association.  Guidelines are
also developed commercially by private companies, such as Milliman
and Robertson and Value Health Sciences, which market them to health
care organizations. 

Given the multiplicity of sources for guideline development, it is
not uncommon for more than one guideline to exist for the same
medical condition or for recommendations to vary.  For example, at
least four organizations have issued a guideline on prostate cancer
screening.  In addition, guidelines tend to reflect the specialty
orientation of the guideline developers.  In the case of the prostate
screening guideline, for example, the American Urological
Association, the American College of Radiology, and the American
Cancer Society recommend using a prostate-specific antigen test for
all eligible patients aged 50 and older, whereas the USPSTF
recommends against the routine use of this test. 

Recent national surveys indicate that a majority of managed care
plans have adopted guidelines and made them available to providers. 
For example, a 1994 survey sponsored by the Physician Payment Review
Commission found that 63 percent of managed care plans reported using
formal written practice guidelines.\4 The results also showed that
the use of guidelines was least common among less structured managed
care plans because of their more limited ability to influence
physicians' practice.  Specifically, 76 percent of the responding
health maintenance organizations reported using practice guidelines,
compared with 28 percent of preferred provider organizations. 


--------------------
\1 For a compendium of available guideline titles, see American
Medical Association, Directory of Practice Parameters (Chicago: 
American Medical Association, 1996). 

\2 This issue was discussed in Practice Guidelines:  Overview of
Agency for Health Care Policy and Research Efforts,
(GAO/T-HEHS-95-221, July 1995). 

\3 USPSTF merged with AHCPR in December 1995. 

\4 The Physician Payment Review Commission is charged with advising
and making recommendations to the Congress on methods to reform
payment to physicians under the Medicare program.  The survey was
conducted for the Commission in 1994 by Mathematica Policy Research
and the Medical College of Virginia.  The survey of 108 health care
plans included 29 group and staff models, 50 network and independent
practice associations, and 29 preferred provider organizations.  See
Physician Payment Review Commission, Arrangements Between Managed
Care Plans and Physicians:  Results from a 1994 Survey of Managed
Care Plans (Washington, D.C.:  Physician Payment Review Commission,
1995). 


   CONTROLLING COSTS AND IMPROVING
   PERFORMANCE ARE LEADING
   INFLUENCES IN GUIDELINE
   ADOPTION
------------------------------------------------------------ Letter :3

Health plans we reviewed had three strong motives for adopting
guidelines:  pressure to moderate expenditures, to show a high
performance level across key quality indicators when compared with
other plans, and to comply with accreditation and regulatory
requirements.  These plans view practice guidelines as tools to
achieve these ends by promoting greater uniformity within their own
physician networks and by helping physicians increase their
efficiency, improve clinical decision-making, and eliminate
inappropriate procedures. 

In selecting aspects of physician practices that could be improved
through the use of guidelines, most plans we spoke with identified
those services or conditions that are high cost, high medical
liability risk, and high incidence for their patient population. 
They reviewed the provision of such services as hospital inpatient,
pharmacy, and ambulatory care--as well as variations in utilization
across physicians--to identify such conditions.  For example, one
plan identified pediatric asthma as a condition for guideline
adoption because it is among the most frequent causes of hospital
admission and repeat emergency department visits.  Human
immunodeficiency virus (HIV) infection and high cholesterol are also
among the plan's top 10 topics for guideline selection. 


      CONTROLLING COSTS
---------------------------------------------------------- Letter :3.1

Several plans we contacted reported cost savings from implementing
guidelines that specify the appropriate use of expensive services. 
In one case, a plan adopted a guideline for treating stroke patients
that recommended physical therapy early in the patient's hospital
stay.  This practice resulted in shortened stays as well as improved
outcomes.  Another plan adopted a guideline on non-insulin-dependent
diabetes to help physicians identify when to provide intensive
management rather than routine care to patients with this low-cost
condition that can lead to high-cost complications.  Another plan
used a low back pain guideline that generated savings from the
selective use of high-cost diagnostic imaging services. 

Plans have also reported cost savings from implementing guidelines
that reduce the incidence of acute conditions and the need for more
expensive care.  One managed care chain we contacted increased the
percentage of Medicare enrollees receiving flu shots from 27 to 55
percent in 1 year.  The chain reported a reduction of about 30
percent in hospital admissions for pneumonia, savings of about
$700,000, and fewer lives lost. 


      IMPROVING PERFORMANCE
---------------------------------------------------------- Letter :3.2

Practice guidelines were also heavily used by plans that were being
evaluated by employers buying health care for their workforce. 
Standardized measures for assessing health plan performance are set
forth in the Health Plan Employer Data and Information Set (HEDIS),
which many employers and other payers view as a report card.\5

Purchasers can use HEDIS to compare plans across several preventive
services measures, including childhood immunizations, cholesterol
screening, breast cancer screening, cervical cancer screening,
prenatal care in the first trimester, diabetic retinal examination,
and ambulatory follow-up after hospitalization for depression.  Of
the 19 plans we contacted, 14 collected performance data using HEDIS
measures.\6

The adoption of practice guidelines may help plans improve their
performance on HEDIS measures.  For example, through the use of
pediatric and adult preventive care guidelines, one plan claimed that
it raised to 95 percent the number of its physicians meeting
appropriate childhood immunization schedules and to 75 percent the
number of its physicians meeting mammography screening goals.  The
plans also reported reducing the percent of breast cancers identified
at advanced stages from 30 to 10 percent. 


--------------------
\5 HEDIS sets specifications for health plans to collect data on 63
indicators that describe performance in five areas:  quality, patient
access and satisfaction, membership and utilization, finance, and
health plan management.  HEDIS was developed in 1993 by a committee
of health plan representatives and corporate purchasers under the
auspices of the National Committee on Quality Assurance. 

\6 In addition, plans are likely to adopt guidelines that they
believe will help them perform better when measured by Medicaid
HEDIS, which is tailored to the special needs of the Medicaid
population.  Medicaid HEDIS allows states to monitor plan performance
on a number of additional preventive care services, such as
well-child visits, substance abuse counseling, blood screening for
diabetes, and post-partum visits. 


      COMPLYING WITH ACCREDITATION
      AND REGULATORY REQUIREMENTS
---------------------------------------------------------- Letter :3.3

In addition, plans' adoption of guidelines is encouraged indirectly
through health plan accrediting organizations.  Although plans are
generally not required to be accredited, many seek a review to
satisfy purchasers' demands and enhance their marketability.  The
National Committee on Quality Assurance's (NCQA) accreditation
standards require that plans have guidelines for the use of
preventive health services.\7 The Joint Commission on Accreditation
of Healthcare Organizations also has standards that encourage the use
of practice guidelines, but not specific guidelines. 

States are also influencing plans' guideline use.  For individuals
covered under workers' compensation, for example, Florida specifies
guidance on the use of diagnostic imaging to treat low back pain.  As
states increasingly require plans to meet certain treatment
standards, plans are likely to adopt guidelines that will help them
comply with these requirements. 


--------------------
\7 The standards further specify that these guidelines must be based
on reasonable medical evidence, be developed or adopted with the
participation of the plan's providers, be periodically reviewed for
updating, and apply to the full spectrum of the enrolled population. 


   PLANS CUSTOMIZE FEDERAL AND
   OTHER PUBLISHED GUIDELINES FOR
   LOCAL APPLICABILITY
------------------------------------------------------------ Letter :4

Few of the plans we visited had the resources to devote to developing
an original guideline, since such an effort can be time consuming and
expensive.  They preferred instead to customize guidelines that had
already been published to ensure local physician involvement and
acceptance of the guidelines and to accommodate their individual plan
objectives. 

In general, health plans customized guidelines by modifying their
scope or recommendations or emphasizing one of several therapy
options presented.\8 Because adapted guidelines differ from original
guidelines to varying degrees, some experts in the guideline
development community caution that certain modifications, when made
to accommodate local self-interests at the expense of patients, may
compromise the integrity of the guideline. 

Some of the plans we visited also expressed a need for more medical
technology assessments and outcomes data; however, they lack the
resources to assume these activities.  They suggested that the
federal government enhance its role in these areas. 


--------------------
\8 If such adaptations have the effect of reducing competition,
antitrust issues may arise.  See Antitrust Issues Relating to
Physicians and Third-Party Payers (GAO/HRD-91-120, July 10, 1991). 


      PHYSICIAN INPUT NECESSARY
      FOR GUIDELINE ACCEPTANCE
---------------------------------------------------------- Letter :4.1

Among the most important reasons for not adopting published
guidelines strictly as written is the need for local physician
involvement and acceptance.  Plan managers we interviewed noted that
published guidelines usually lack the input of their local physician
community.  They recognized that some plan physicians are reluctant
to put aside their own practice patterns in favor of those
recommended by outside sources, particularly when guidelines are
based more on expert opinion than on conclusive scientific evidence. 
Physicians have confidence in guidelines that they or their peers
take part in developing or that are developed by their professional
organization.\9 Therefore, guidelines adopted by a consensus of local
physicians are more likely to be accepted. 

In one plan manager's view, without the physicians' participation in
approving the final product, physicians would not be likely to follow
the guideline.  In citing the need for physician acceptance of
guidelines, one plan manager put it this way:  "The practice of
medicine is parochial." Similarly, one large plan's medical policy
specialist told us that published guidelines need to be modified
because they are often not consistent with local standards of
care--that they are not "in synch" with how plan physicians are
practicing.  This position was corroborated by the American Medical
Association's Director of Practice Parameters, who said "a guideline
can be developed at the national level, but it has to be
localized .  .  ..  [I]t comes down to local areas developing the
recommendations that suit them."

Plans selected practice guidelines from a variety of sources,
including federal agencies and medical specialty societies, such as
the American College of Physicians.  Among the health plans we
contacted, few had documentation on the methods they used to adapt
guidelines.  However, some described their approach as typically
including some combination of physician consensus\10 and a review of
outcomes of clinical studies.  When there was controversy or lack of
strong clinical evidence, plans reported making greater use of local
physician opinion and often performed independent literature reviews
to provide additional information.  This was particularly likely with
a guideline on a rapidly changing treatment method, such as treatment
for heart attacks, since clinical developments may overtake the
publication of existing guidelines. 


--------------------
\9 To obtain a more "home grown" product, some plans relied on
private regional organizations, such as the Unified Medical Group
Association in the western states or the Institute for Clinical
Systems Integration in Minnesota, that are governed by physicians
drawn from medical groups affiliated with local plans. 

\10 Some plans we contacted said they involved both primary care and
specialty physicians, and others said they included nurses and allied
health professionals. 


      CUSTOMIZATION ALSO DRIVEN BY
      LOCAL ORGANIZATIONAL
      CONSTRAINTS
---------------------------------------------------------- Letter :4.2

Plans have a number of other reasons for customizing clinical
practice guidelines.  These issues include cost considerations,
resource constraints, demographic characteristics of enrolled
population, simplicity of guideline presentation, and the need to
update information contained in published guidelines. 


         COST-EFFECTIVENESS
         CONCERNS
-------------------------------------------------------- Letter :4.2.1

Plans we visited noted that clinical practice guidelines often fail
to provide needed information on what is cost-effective care.  In its
1992 report, the Institute of Medicine recommended that a clinical
practice guideline include information on both the health and cost
implications of alternative treatment strategies.\11

However, many guidelines produced by federal and private entities do
not routinely include cost-effectiveness analysis in the
recommendation-making process, often because the information needed
to conduct cost analysis is not available.\12

Plans we visited often consider the costs of alternative treatments
in deciding how to implement a guideline.  In some instances, a
guideline may allow choices among equally effective therapeutic
options.  This was the case with AHCPR's guideline on the treatment
of depression in primary care settings, which stated:  "No one
antidepressant medication is clearly more effective than another.  No
single medication results in remission for all patients." Instead,
the guideline listed several types of drugs that were considered
equivalent in clinical effectiveness.  In implementing this
guideline, one plan we contacted chose the least expensive class of
drugs from AHCPR's recommended list as its first-line treatment.  The
plan also noted that the selected drugs were older and their side
effects were better known to its physicians. 

Some plans we visited also noted that guidelines may not recommend
the most cost-effective health care.  For example, some plans adapted
a published guideline on total hip replacement that recommended that
patients be admitted to the hospital the night before their surgery. 
The plans changed the recommendation so that patients were admitted
the morning of their surgery, even though most of these patients were
elderly and lived far from the hospital.  One guideline expert argued
that this was done to lower the cost of care with little regard for
the inconvenience to or impact on the patient. 


--------------------
\11 Institute of Medicine, Guidelines for Clinical Practice:  From
Development to Use (Washington, D.C.:  National Academy Press, 1992). 

\12 USPSTF does not typically include cost as a criterion for their
recommendations regarding appropriateness.  According to AHCPR
officials, when its guideline panels can obtain sufficient
information, cost-effectiveness analyses are performed. 


         AVAILABLE RESOURCES
-------------------------------------------------------- Letter :4.2.2

Local customizing is also influenced by the amount and type of health
care resources available to the plan.  For example, the USPSTF's
colorectal cancer screening guideline recommends a periodic
sigmoidoscopy or an annual fecal occult blood test or both.  Plans
with a sufficient number of physicians who are trained to perform
sigmoidoscopies are more likely to choose the recommendation of
screening with a periodic sigmoid test and may also perform the fecal
occult blood test.  However, those without enough trained physicians
may decide to select only the fecal occult blood test. 


         LOCAL POPULATION NEEDS
-------------------------------------------------------- Letter :4.2.3

Some plans noted that guidelines may need to be tailored to allow for
population differences in each locality.  They cited research showing
that differences in patients' health need to be taken into account
since socioeconomically different populations may have different
incidence and prevalence rates of the disease.  In particular, the
research showed that Native American women required more frequent
mammography screening due to their above-average incidence of breast
cancer.\13

Plans may also decide to recommend a wider application of diabetes
screening services when their members are identified as having higher
risk factors.  The USPSTF guideline on diabetes states that there is
insufficient evidence that routine screening is necessary.  However,
members of certain ethnic groups (Hispanics, African-Americans,
Native Americans) are among those likely to benefit from screening
tests.  Therefore, plans may need to adapt guidelines to serve the
needs of their more vulnerable populations. 


--------------------
\13 See P.  Nutting, "The Danger of Applying Uniform Clinical
Policies Across Populations:  The Case of Breast Cancer in American
Indians," American Journal of Public Health, Vol.  84, No.  10,
(1994), pp.  1631-36. 


         FORMAT ISSUES
-------------------------------------------------------- Letter :4.2.4

Plans also cited the need to customize to make the information in a
guideline available in a more usable form.  Guideline documents vary
in length, from a three-page brochure to a two-volume manual.  Some
guidelines consist largely of decision-tree charts, called clinical
algorithms, while others are predominantly text, providing a
synthesis of scientific evidence, expert consensus, and references to
specific research studies. 

Sometimes published guidelines are broad in scope and cover not only
a full range of medical practices--including diagnosis, treatment,
and follow-up care--but also the guideline development methodology
and areas for future research.  The comprehensiveness of such
guidelines, designed to reach the broadest audience of practitioners
as well as clinical researchers, may require a book-length
presentation.  Therefore, plans typically adapted such guidelines to
focus on a narrower set of clinical needs, such as the
pharmacological management of patients with heart failure.  Several
plans pointed to AHCPR's 327-page guideline on primary care
physicians' treatment of depression as being too long and complicated
for busy clinicians.  One plan reduced it to 44 pages,\14 another to
20 pages, and a third to 4 pages.  (AHCPR has issued a shorter
quick-reference version of this guideline, as it does with all its
guidelines.)

Format may also be an issue with practice guidelines developed by
health plans.  A prominent expert on guideline development noted that
a mathematically based cholesterol screening guideline could not be
implemented because the plan's primary care physicians did not have
time to follow the complicated guideline model. 


--------------------
\14 This plan's adapted depression guideline also contained
plan-specific referral information, including phone numbers for
specialists and information on sites for care. 


         DATED MATERIAL
-------------------------------------------------------- Letter :4.2.5

Sometimes the information in existing guidelines is not current. 
Medical information and technology, such as pharmacological
management of a condition, is continually evolving.  Yet, published
guidelines may not be reviewed and revised on a timely basis.  For
example, NIH guidelines, called consensus statements, are not
reviewed for at least 5 years after issuance.  In fact, only about
half of the plans we contacted reviewed and updated their guidelines
annually.  However, one plan published guidelines with an expiration
date, forcing the plan to review the guidelines at least once
annually. 


      LOCAL CUSTOMIZATION OF
      GUIDELINES CAN LEAD TO A
      RANGE OF VARIATION
---------------------------------------------------------- Letter :4.3

The extent of modifications that resulted from plans' customizing
published guidelines varied from minimal to substantial.  Sometimes
the differences between the local and published guidelines were
cosmetic.  For example, some individual medical groups prepared
shortened versions of regionally developed guidelines on plastic
cards for quick physician referral.  They also removed the original
source's name and applied their logo to the documents to further
enhance physicians' sense of ownership. 

Other modifications were more than superficial.  One plan customized
AHCPR's HIV guideline by adding drug treatments that were not covered
in the original guideline, specifying when primary care physicians
should refer patients to a specialist, and providing information on
state reporting requirements. 

Finally, some changes could be considered substantial.  For example,
one plan we contacted relaxed the recent chicken pox vaccination
guideline from the American Academy of Pediatrics.  The Academy
recommended that chicken pox vaccinations be given to all healthy
children.  The plan adapted the guideline by recommending that its
physicians discuss the extent of immunity that the vaccine could
confer and let parents decide whether they want the vaccine given to
their children.  The plan maintained that, because the immunity
offered by the vaccine might not last a lifetime, it could result in
more adult cases of chicken pox, an outcome that could result in
serious harm or death.  The plan held that it is better for children
to contract chicken pox to ensure lifetime immunity than to get the
vaccine.  An Academy spokesperson commented that no significant loss
of immunity has been demonstrated in healthy children who were
vaccinated. 

At another plan, we found that a customized guideline recommended
treatments specifically not endorsed by AHCPR.  In its low back pain
guideline, the plan recommended that physicians perform an invasive
treatment to control pain and an invasive test to diagnose the extent
of disc damage.  However, AHCPR's guideline stated that the benefits
of this treatment and test were unclear and not worth the potential
risk of infection to patients.  A plan representative told us that
their guideline was adapted to address the concerns of the plan's
orthopedists, who felt that the invasive treatment and test should
have been included in the original guideline. 

The Institute of Medicine cautions that adaptations can be done
locally for improper reasons, such as to perpetuate insupportable
local practices or to further economic self-interest.  According to
an Institute official,

     ".  .  .  to the extent that local adaptation, broadly defined,
     moves in the direction of excluding certain types of
     practitioners .  .  .  or of weakening a guideline document
     fundamentally by allowing for the provision of marginally
     beneficial services in situations in which guidelines would
     probably say `this is inappropriate for this class of people'
     --then you have what looks to me like a self-serving change."\15

Some practice guideline experts we contacted agree and warn that
adaptations may compromise the integrity of published guidelines. 
According to one guideline authority,

     " .  .  .  guidelines that recommend the best care practices to
     optimize outcomes for patients may not necessarily be
     cost-effective or easy for MCOs [managed care organizations] to
     implement.  MCOs, with a commitment to the bottom line, may make
     modifications to guidelines to achieve their best interests and
     not those of patients."


--------------------
\15 Paul M.  Schyre, "Reasonable Expectations:  From the Institute of
Medicine," interview with Kathleen N.  Lohr, Quality Review Bulletin
of the Journal of Quality Improvement, Vol.  18, No.  12 (1990), pp. 
393-96. 


      PLANS SUGGEST A NEW FOCUS
      FOR FEDERAL GUIDELINE
      EFFORTS
---------------------------------------------------------- Letter :4.4

Most plan managers we contacted applaud the various guidelines
published by public and private entities.  The availability of such
guidelines makes plans' guideline development efforts easier and less
costly.  Plans consider published guidelines to be useful summaries
of the literature and science, written for a diverse audience. 

However, given the multiplicity of guideline sources, many plan
managers told us they would prefer to see some federal agencies
assume an alternative role in the guideline movement.  Plans noted
that having many federal and private-sector guidelines on the same
topic is an inefficient use of limited resources.  Furthermore, some
of these guideline recommendations conflict, creating confusion for
plan managers and practitioners.  Plan managers also told us that
their needs for medical technology assessments and outcomes data
remain unmet. 

Some plan officials suggested that some federal agencies would
provide a more useful service to managed care plans by not continuing
to produce guidelines.  Instead, they should publish and update
summaries and evaluations of evidence on medical conditions and
services so that plans could use this information to develop and
update their own guideline recommendations.  Other plans proposed
that the federal government increase funding to develop useful
practice guideline tools, such as methods to incorporate cost
assessments and patient preferences into practice guidelines. 
Furthermore, several plans asserted that federal guideline funds
should be used for outcomes research and technology assessment from
which plans could develop their own guidelines.  One plan manager
said, "This is an area that health plans do not have the resources or
expertise to adequately address."


   CONCLUDING OBSERVATION
------------------------------------------------------------ Letter :5

Managed care plans' growing interest in practice guidelines is driven
by their need to control medical costs, ensure consistency of medical
care, and demonstrate improved levels of performance.  By using
practice guidelines, plans are making a conscious decision about the
care they intend to provide, reflecting the trade-off between costs
and benefits. 

When published guidelines differ from a plan's clinical and financial
objectives, they are typically customized with the active
participation of the network physicians.  Since published guidelines
can be inconsistent, outdated, or too complex, local adaptation may
be useful.  Yet some changes may compromise the quality of patient
care.  Moreover, local adaptation may undermine the goal of clinical
practice guidelines, which is to make medical care more reliant on
evidence-based recommended practices and less a function of where a
patient receives care. 


   COMMENTS AND OUR EVALUATION
------------------------------------------------------------ Letter :6

Comments on a draft of this report were obtained from the American
Association of Health Plans, AHCPR, and two experts on guideline
development and use.  The American Association of Health Plans
generally agreed with the draft, but suggested language changes where
the report addressed the goal of reducing cost.  They stated that
practice guidelines are intended primarily to improve the quality and
outcomes of care and secondarily to contain costs.  We agree that
plans use guidelines for quality improvement as well as cost
management.  AHCPR noted that managed care plans' views on the
federal role of guideline activities were similar to the agency's
views and its plans for the future.  The agency also provided
technical comments, and we have incorporated its suggested changes
and those of the expert reviewers as appropriate. 


---------------------------------------------------------- Letter :6.1

As arranged with your office, unless you publicly announce its
contents earlier, we plan no further distribution of this report
until 30 days after its issue date.  At that time, we will send
copies to interested parties and make copies available to others on
request. 

Please call me at (202) 512-7119 if you or your staff have any
questions.  Other major contributors include Rosamond Katz, Donna
Bulvin, Mary Ann Curran, Hannah Fein, and Jenny Grover. 

Sincerely yours,

Sarah F.  Jaggar
Director, Health Financing
 and Public Health Issues


MANAGED CARE PLANS CONTACTED
DURING REVIEW
==================================================== Appendix Appendix

                                            HMO model        Enrollment
Name                    Location            type(s)        (as of 1995)  Tax status
----------------------  ------------------  -------------  ------------  ----------------
Individual managed care plans
-----------------------------------------------------------------------------------------
Allina Health Plan      Minneapolis, Minn.  IPA\a               542,000  Nonprofit

CAC-United HealthCare   Coral Gables, Fla.  IPA; staff;         204,000  For profit
Plan                                        network

California Care         Woodland Hills,     Network             725,000  For profit
                        Calif.

Care America            Woodland Hills,     IPA                 216,000  For profit
                        Calif.

CIGNA Health Care of    Virginia Beach,     IPA                  38,000  For profit
Virginia\b              Va.

CIGNA Mid-Atlantic      Columbia, Md.       IPA                 110,000  For profit

George Washington       Bethesda, Md.       IPA; staff;          73,000  Nonprofit
University Health                           group
Plan, Inc.

Group Health            Seattle, Wash.      Staff;              510,000  Nonprofit
Cooperative of Puget                        network
Sound

Harvard Community       Wellesley, Mass.    Staff; group        479,000  Nonprofit
Health Plan

Health Partners         Minneapolis, Minn.  Staff; group;       471,000  Nonprofit
                                            network

HMO Illinois            Chicago, Ill.       IPA; network        383,000  Nonprofit

Kaiser Mid-Atlantic     Rockville, Md.      Group               342,000  Nonprofit

Kaiser Southern         Pasadena, Calif.    Group             2,200,000  Nonprofit
California

M.D.-IPA                Rockville, Md.      IPA                 423,000  For profit

Optima Health Plan      Virginia Beach,     IPA                  72,000  Nonprofit
                        Va.

PacifiCare              Mercer Island,      Group                56,000  For profit
                        Wash.

Potomac Health          Baltimore, Md.      Network               5,100  For profit

Prudential Health Care  Fort Lauderdale,    IPA                  65,000  For profit
Plan, Inc.              Fla.

Prudential Health Care  Jacksonville, Fla.  IPA                  65,000  For profit
Plan, Inc.


Corporate health plan chains
-----------------------------------------------------------------------------------------
Aetna Health Plans      Hartford, Conn.     IPA; network      1,100,000  For profit

Humana, Inc.            Louisville, Ky.     IPA; network;     1,600,000  For profit
                                            staff
-----------------------------------------------------------------------------------------
\a Independent practice association. 

\b Consolidated with CIGNA Healthcare of Richmond, Va. 


*** End of document. ***