Missouri Advantage HMO is a newly developed, small HMO based in a rural area. Strongly committed to local control, Missouri Advantage has a highly decentralized organizational structure. Its four rural hospital owners have built Missouri Advantage's initial enrollment base with hospital employees, capitalizing on their positions as the largest employers in their communities. The HMO's future plans include recruitment of additional rural hospitals and physician organizations as new equity owners of the HMO, and development of new products, including a Medicare risk product. Implications for Rural Providers, Employers and Enrollees. Physicians. In the two communities visited during this study, Bolivar and Osage Beach, the physicians present an interesting contrast in terms of their attitudes toward managed care. Some of the physicians view managed care as an annoyance to be endured, while others are more positive and proactive, attempting to figure out how managed care can be used to the mutual advantage of the physicians and patients. A high proportion of physicians participates in the Missouri Advantage community network. The hospital owners of Missouri Advantage employ a substantial portion of the primary care physicians as well as some specialists in their rural communities. This situation facilitated the initial development of the community network. Development of the regional network has been more challenging for Missouri Advantage. Although the HMO has succeeded in contracting with the two competing systems in Springfield, the absence of the University of Missouri has limited the number of participating specialists in Columbia. At the time of the site visit, the HMO had been operating for less than a year, and Missouri Advantage enrollees accounted for a small percentage of patients, especially in the three newer local markets. Missouri Advantage also had not fully implemented its quality assurance activities. Consequently, participation in Missouri Advantage had not had a significant impact on physicians' practices. While physicians express some concerns regarding reimbursement for specialty care and pre- authorization requirements for certain procedures, they appear to be generally satisfied with their reimbursement arrangements and supportive of local utilization review. Hospitals. The four rural hospitals that developed Missouri Advantage have multiple roles: as owners of the HMO; as participating providers; and as employers that contract with the HMO to serve their employees. The hospitals also employ Missouri Advantage's local marketing staff. From the hospitals' perspective, balancing these roles has not been a problem. They emphasize that each hospital negotiates a provider contract with Missouri Advantage just as it does with other HMOs. Nevertheless, some of the physicians interviewed voiced concern about potential conflicts of interest arising from the hospitals' multiple roles in the HMO. To date, the small number of Missouri Advantage enrollees has precluded any financial impact on the four rural hospitals. The potential for conflict between the hospitals' interests as owners and contracted providers may increase with increased enrollment, especially Medicare risk enrollment because the HMO will have financial incentives to reduce hospitalization. Employers. In contrast to the hospitals and physicians, who identify local control of the HMO as an important feature distinguishing Missouri Advantage from other HMOs, the nonhospital employers interviewed express less concern about the ownership and organizational structure of the HMO. Cost is an important factor in their health plan selection process, and they are unwilling to pay a higher price to obtain a local HMO product. While access to local providers is important, these employers point out that local providers participate in several health plans, including other HMOs, in addition to Missouri Advantage. Currently, hospital employees constitute the majority of Missouri Advantage's enrollment in three of the four local markets. The HMO has focused on developing its provider network in these market areas. Now Missouri Advantage needs to sign up more large employers to build its enrollee base, and also small employers, who make up the vast majority of employers in these rural areas. Many employers in Missouri Advantage's market area have not previously offered an HMO product and may be especially receptive to a point-of-service product if Missouri Advantage succeeds in obtaining an insurance partner to jointly offer this product. Enrollees. Employers with Missouri Advantage coverage indicate that they have received few complaints from employees. The high participation rate of local physicians in the Missouri Advantage network and the comprehensive coverage offered by the HMO are viewed positively by enrollees. One issue bears monitoring in the future: As the HMO more actively manages care and enforces referral requirements, enrollee satisfaction could be affected. The limited size of the regional provider network in the Columbia area also represents a possible future source of enrollee dissatisfaction if that network is not expanded. Future Issues for Missouri Advantage. Missouri Advantage's current equity owners are financially stable, diversified hospitals with strong community support. Missouri Advantage is seeking additional rural hospitals and physician organizations to join the HMO as equity owners. To the extent that Missouri Advantage can recruit providers with similar strengths and resources, expansion of equity ownership will bring the HMO many advantages, including the infusion of additional capital and a broader provider network. The addition of more local providers will allow Missouri Advantage to expand its service area and increase its enrollment, which would spread risk and administrative costs over a larger enrollee base. The addition of more local providers also should improve Missouri Advantage's ability to negotiate with potential regional network providers and with employers. As it expands, will Missouri Advantage be able to maintain its identity as a locally owned and managed plan? Local ownership and local management differentiate Missouri Advantage from the regional and national HMOs that are beginning to serve rural Missouri. Clearly, local control appeals to local providers, as well as to some employers and enrollees. However, Missouri Advantage must not rely too heavily on local character to sell the plan, especially because other HMOs now offer similar provider networks, and most area employers place primary importance on costs in selecting a health plan. To a large degree, the perceptions of local providers, employers, and enrollees regarding the HMO will be shaped by the local market area offices. Missouri Advantage recognizes this, and it plans to develop a local market office in each new service area. The HMO also is emphasizing the importance of the local market office in addressing concerns regarding the central office's move to Jefferson City, Mo. That move is a logical strategy for the future expansion of the HMO, but understandably has raised some concerns about the potential loss of local control in the Bolivar area. Another major challenge that the HMO will face is implementation of its Medicare risk initiative. Few HMOs currently offer a Medicare risk product in rural areas, and less than 1 percent of all rural Medicare beneficiaries was enrolled in a risk plan as of December 1995. Missouri Advantage has several reasons for deciding to offer a Medicare risk product. Medicare beneficiaries comprise a high percentage of the population in its service area, and Adjusted Average Per Capital Costs rates are not as low in the Missouri Advantage service area as they are in many rural areas. In addition, federal changes in Medicare HMO reimbursement may make rural areas more attractive for HMOs to serve in the future, and Missouri Advantage wants to be one of the first HMOs to offer a risk product in its market areas. Medicare beneficiaries enroll in an HMO on an individual basis, rather than as part of a group. Moreover, they have different service needs and utilization patterns than commercial enrollees. Therefore, Missouri Advantage's Medicare risk product will need to differ from the HMO's commercial product in several ways, including the services offered, marketing strategies, enrollment process, and member services. As one of only 14 rural- based HMOs in the nation, Missouri Advantage has had few role models. It may, however, be in a position to serve as a future role model for new provider- owned HMOs based in rural areas if it is able to increase its enrollment and solidify its financial base.
|Original language||English (US)|
|Number of pages||11|
|Journal||Journal of Rural Health|
|State||Published - Jan 1 1998|