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Grand Rounds |
Accepted March 18, 1998. From Cornell University Medical College and The New York Hospital-Cornell Medical Center, New York, New York. Address correspondence to Dr. Goldstein, Payne Whitney Clinic, Department of Psychiatry, New York Hospital-Cornell Medical Center, Baker 16, 525 E. 68 Street, New York, NY 10021; e-mail: mgoldste008362A4wcn{at}nyh.med.cornell.edu
OVERVIEW OF THE STUDY
This study surveyed a sample of Manhattan-based private psychiatrists regarding aspects of their professional activities: general practice characteristics (size of practice, managed care participation), economic factors (yearly gross revenues, fee schedules), attitudes toward managed care, patterns of psychotherapy delivery, and career satisfaction. A questionnaire was sent to 100 randomly selected medical school voluntary faculty with a return envelope designed to ensure anonymity. Forty-three percent of those surveyed returned completed questionnaires.
Gross revenues were nearly level for the years 1993–1995; however, those psychiatrists engaged in managed care averaged approximately 20% lower annual revenues than those not on a provider panel.
Managed care participants were significantly less satisfied with practice than were nonparticipants. Respondents reported diminishing opportunities for the practice of psychotherapy, and the perception that psychiatry was becoming a more difficult profession was widely held across groups.
The study data support anecdotal accounts of demoralization among private practice psychiatrists, specifically documenting lower income and professional satisfaction ratings among managed care participants versus nonparticipants.
BACKGROUND
Few developments in organized medicine have progressed as rapidly as the emergence of managed care in the United States in the 1990s. Although not new, such managed systems have newly dramatic prevalence. The common purpose of all managed care approaches is the control of health care expenditures, theoretically without compromising the quality of care administered and the well-being of patients. As of 1995, more than 58 million Americans were receiving medical care under the auspices of such organized systems.1 Even in New York City, where the establishment of managed care organizations (MCOs) was long resisted and their growth lagged well behind levels in other parts of the country, their recent expansion has been explosive. Between 1993 and 1995, managed care penetration in New York State increased from 23% to 31%, with a greater than 50% increase (from 18% to 29%) in New York City for the same time period.2
Mental health care, long feared as an enormous cost item for insurance companies, has been a featured target of managed care. Initially, cost control efforts were directed toward reducing inpatient expenditures, since hospitalization accounted for the bulk of costs. Later, MCOs targeted outpatient treatment as patients were shifted from hospitalization to community-based management.3,4 In fact, only psychiatry, among all medical fields, has seen the emergence of superspecialized management entities: organizations such as Merit Behavioral Care, American Psych Management, and dozens more, are routinely employed by MCOs to manage the mental health benefits of enrollees.
American psychiatry has met the advent of managed care with combinations of tre-pidation, hysteria, ignorance, and, not unexpectedly, demoralization. The American Psychiatric Association has become polarized by fierce critics and ardent supporters of behavioral health care management within its ranks. The position of the former is well summarized by Inglehart: "The application of managed-care principles to mental health and substance-abuse services has provoked unprecedented turmoil in the profession by eroding the autonomy of practitioners, squeezing their incomes, and forcing them into constricted new roles."5 Conversely, proponents hold that managed care offers enhanced access to care for more people, and they accept the premise that constraints on open-ended care are necessary to prevent abuses. Other psychiatrists support efforts at health care reform, hoping that control over escalating costs will be followed by parity of insurance coverage for treatment of mental disorders.6,7
With as many as 70% of insured Americans receiving mental health care through managed care systems,8 practitioners will inevitably be affected. Yet despite the obvious need to assess the impact of managed care on psychiatry, there is surprisingly little useful information available about the impact of managed care on private practice, which is still the predominant delivery mode of outpatient psychiatric treatment in the United States. The literature currently consists of three types of material: 1) numerous highly subjective tabloid-style articles, 2) a few large informal surveys, and 3) a small number of systematic surveys of heterogeneous groups of mental health professionals.
A large 1988–1989 overview of psychiatrists' professional activities (N = 19, 431) documented a decline in private practice and dramatic diversification of practice settings.9 The authors attributed these trends to economic pressures, principally the growth of MCOs. The proportion of psychiatrists listing private practice as their primary work activity declined from 58%, a majority, in 1982 to 45% in 1988. The same study also documented the extensive prevalence of cost-shifting (in which psychiatrists charge higher fees to their private, non–managed care patients) across a broad range of services.10
A 1995 multidisciplinary survey of psychotherapists (N > 200, including psychiatrists, psychologists, social workers, and others) documented a reduced psychotherapy caseload among 43% of respondents, increased use of time-limited techniques (a managed care hallmark) in 51%, and reduced income among 61% of psychiatrists.11 Sixty-three percent of responding psychiatrists reported an increase in disallowed claims due to managed care.
Another study (N > 100) suggested that psychiatrists' incomes decline as their managed care participation increases.12 The authors (the Medical Group Management Association) noted that "psychiatrists are not expected to do well under managed care because these organizations typically restrict psychiatrists' use to medication management."
Between these few data-based surveys and the subjective diatribes that pour forth ("Managed Care May Save the Profiteers but Kill the Doctors;"13 "Earning a Living: A Blueprint for Psychiatrists;"14 "Reversing Managed Denial;"15 etc.), there exist several informal surveys purporting to reflect the state of psychiatric practice in this age of economic change.
A 1993 survey of the chairs of regional Private Practice Committees of the American Psychiatric Association offered the following dismal impressions:
Psychiatrists as a group have grave misgivings about their future and that of their profession. A sense of anxiety and foreboding was expressed even by those practitioners who personally were doing well. Words such as scared, depressed, anxious, apprehensive, confused, subdued, pessimistic, and demoralized were used in nearly all the returned questionnaires. Many indicated that incomes were declining or were being maintained only by the expenditure of a great deal of extra effort. Most said that professional autonomy had been severely eroded by managed care and other forms of oversight.16 (p. 19)
A 1994 New York Times review of the effects of managed care on the practice of psychotherapy across professional disciplines further reported lowered incomes, diminished autonomy, and general discouragement with private practice.17 A 1995 Wall Street Journal series detailed changes in psychiatric practice wrought by managed care. One article focused on insurers' pressuring psychiatrists and other clinicians to minimize psychotherapy and emphasize medication for patients, virtually regardless of diagnosis:
Managed care companies, with their mandate to cut costs, make no bones about their preference for treating mental health problems with drugs. Not only do they limit coverage for psychotherapy, they often pay psychiatrists more per hour to supervise drug treatment than to provide counseling.18
Another article in the Wall Street Journal series reported the malaise and discouragement of practitioners, detailing the conflicts within the profession described above. Noting the 12% decline in U.S. medical school graduates who chose psychiatry residency training between 1988 and 1994, the authors asserted that one consequence of the economic deterioration of the practice "climate" is diminishing interest in the specialty by medical students.19
Given the conflicting passions aroused by managed care, it is striking that so few data exist to inform the debates that rage among psychiatrists. This dearth of empirical information prompted our study: an attempt to quantify more systematically the state of private psychiatric practice in a part of New York City, and to assay the mood, attitudes, and professional satisfaction of a group of practitioners in the mid-1990s. Our hypotheses: 1) MCO providers would report lower professional satisfaction than non–MCO providers; and 2) changes in practice nature (such as decreased opportunities for performing psychotherapy) and economic changes (such as lower income) would be observed as correlates for differences in satisfaction rating. In other words, changed levels of satisfaction would be linked to MCO-related changes in what practitioners do and what they get paid for doing it.
METHODS
Using the alphabetical faculty directory of the Department of Psychiatry of Cornell University Medical College, Payne Whitney (Manhattan) campus, we selected every third nonsalaried (voluntary faculty) psychiatrist who had been out of residency for at least 3 years and was engaged in full-time private psychiatric practice in Manhattan. If a selected individual did not meet these criteria, the next name in sequence was chosen. This procedure was followed to reach the desired N of 100 (representing a balance of feasibility and statistical adequacy). The total pool of eligible individuals was approximately 300 from a faculty roster of nearly 500.
A mailing was sent in early 1996 to this group of 100 asking that they anonymously complete a two-page questionnaire about private psychiatric practice. A stamped, pre-addressed envelope was included together with a cover letter that explained the purpose of the study and assured the addressees that their responses would be kept confidential. A follow-up telephone call was made 1 month after the mailing in an attempt to maximize returns.
The questionnaire, designed by the investigators, contained 24 items, some of which had multiple components. Areas of inquiry included general aspects of practice (such as duration, participation in managed care and Medicare, numbers of patients in treatment, and prescribing activity for non-MD therapists), economic factors (including gross practice revenues for 1993–1995, referral activity, and fee schedules), satisfaction with aspects of practice, and attitudes about managed care and other issues. Some questionnaire items related to the practice of providing medication backup to nonmedical therapists were drawn from a previously published validating study.20 Overall professional satisfaction ratings for two times periods, "currently" and "in the past," were reported via a Likert scale, ranging from 1 = very dissatisfied to 5 = very satisfied.
Statistical analysis (t-tests for independent and paired samples) of responses was performed by using the Statistical Package for the Social Sciences (SPSS Inc., Chicago, IL).
RESULTS
Forty recipients returned completed or partially completed questionnaires. An additional 7 were returned to the investigators undelivered, yielding an overall response rate of 43% (40/93).
General Characteristics of Respondents' Practices
Forty-six percent of respondents identified themselves as participants in one or more managed care programs. Eighty-seven and a half percent reported that in the past year they had been asked by a prospective new patient whether they belonged to a managed care panel. Seventy-five percent of respondents stated that they treat Medicare patients. Twenty-five respondents (62.5%) identified themselves as providing psychopharmacologic treatment for patients treated by a nonmedical psychotherapist, with 28% reporting that they were doing more medication backup than they had 3 years earlier. General characteristics of the respondents are listed in Table 1.
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Differentiating respondent revenue data according to years in practice revealed a significant diminution in the revenue difference between older, more veteran psychiatrists (those in practice longer than 15 years) and their younger colleagues. Analysis of mean annual revenues by years in practice appears in Table 2.
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Annual average patient care revenues differed considerably according to respondents' managed care participation status (Table 3).
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Satisfaction With Practice
The satisfaction ratings of the respondents are listed and compared in Table 4; as noted above, 5 is the highest level of satisfaction and 1 is the lowest.
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Among non–managed care providers (n = 22), the most common reasons cited for nonparticipation were eroded confidentiality (73%), inadequate fees (55%), and comfort in the solvency and security of their practices (50%).
Thirty-three of 40 respondents (83%) found practice more difficult now than 3 years ago; 70% were happier in practice 3 years ago than currently; and 70% of respondents reported that they would not recommend a career in private practice to a graduating psychiatry resident. Seventy percent of respondents felt that psychiatry as a specialty is worse off in the current economic climate than other medical specialties.
As shown in Table 5, where revenue data are combined with satisfaction scores, the increasing income disparity between MCO participants and nonparticipants parallels an increasing satisfaction rating disparity.
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This study was undertaken to provide more information about the current state of New York City private psychiatric practice in the context of the growth of managed care through the mid-1990s. The investigators hoped to discover whether data support pervasive subjective impressions of pessimism and disillusionment that informal discussions with colleagues and the aforementioned anecdotal literature suggest. Unfortunately, the results appear to support many of the common perceptions.
Although satisfaction scores seem acceptable (mean satisfaction score for all respondents was 3.9 of a possible 5), they may actually constitute a disappointing result when one considers that private practice represents the chosen career activity of these highly trained professionals affiliated with a prominent medical college.
Examining satisfaction ratings according to managed care provider status lent support to the hypothesis that the changes wrought by managed care are indeed affecting the satisfaction of practitioners. Respondents participating in managed care were significantly less satisfied than counterparts who were not MCO-affiliated. Further support for the notion that managed care participation negatively affects professional satisfaction comes from the significant decline in satisfaction ratings of managed care providers compared with their ratings 3 years earlier. This decrease suggests that exposure to managed care takes its toll over time on the satisfaction of practitioners. Again, non-MCO providers reported no significant change in professional satisfaction over the three-year interval.
A major short-term cost-cutting (though not necessarily long-term cost-effective) strategy of managed care involves selectively referring patients for psychotherapy to nonmedical professionals whose rates of remuneration are significantly lower than those of psychiatrists. Thus, MCO psychiatrists are decreasingly providing psychotherapy to managed care patients, their role being often limited to brief "med-check" visits. Increased competition for psychotherapy patients has compelled many psychiatrists to take on more medication backup cases to maintain their incomes. This constellation of circumstances (psychiatrists economically bound to continue providing a service that is less gratifying yet involves greater liability exposure) would seem to yield a climate antagonistic to professional satisfaction.
A study by Simon and Born20 of physicians' 1994 incomes across all specialties revealed a 4% decrease from the previous year. In our study, respondents' incomes increased by 4% during the 1993–1994 interval and subsequently fell by 1% for 1994–1995. Because Manhattan has lagged behind the rest of the country in managed care penetration, a delayed income decline among Manhattan psychiatrists is not surprising. The authors of the national survey suggest that physicians' incomes are a useful barometer for tracking changes in the economic climate in which medicine is practiced; specifically, they suggest that income statistics are valid as a tool for tracking the impact of managed care.20 In our study, even though the finding did not achieve statistical significance, it is striking that non–managed care psychiatrists achieved gross incomes that were 20% to 23% greater than the mean incomes for managed care participants during the 3 years surveyed.
As noted, the increasing income disparity between MCO participants and nonparticipants paralleled an increasing satisfaction rating disparity (Table 5). But those results also show that money alone cannot explain declining satisfaction scores among managed care participants. A revenue disparity existed in 1993, when satisfaction scores were approximately equal, suggesting that other aspects of managed care participation (more clinical oversight, for example) may contribute to declining professional satisfaction.
The implications of our findings for patient care are collectively ominous. Diminished professional satisfaction and economic compensation may lead current practitioners away from patient care and deter promising potential clinicians from establishing practices as they choose less embattled career paths. Over time psychiatric practitioners of psychotherapy may diminish in number, leaving this work to the nonmedically trained and jeopardizing the welfare of patients whose care would lack the relevant and often mandatory medical perspective and expertise. At the very least, declining professional satisfaction can yield a dangerously fertile environment for negative countertransference.
As with most questionnaire surveys, numerous caveats apply to interpretation of these data. The questionnaire, an original construction, appears to meet the requirements of face validity (for instance, individual items manifestly address issues that relate to an assessment of satisfaction with practice),21 but it lacks replication or control through other uses or studies. Especially vulnerable to criticism is the retrospective assay of past satisfaction. However, prior to its distribution the questionnaire was reviewed by experienced researchers, resulting in revisions that achieved consensus acceptability. Another concern involves the response rate and hence the representativeness of the respondents. For mailed surveys, a response rate of 50% is generally considered adequate for data analysis and reporting;21 the current work, with a rate of 43%, falls below that level.
Further reasons for caution in interpreting the generalizability of the results are that this study canvassed a particular geographic region (New York City) and a particular economic market (the upper east side of Manhattan). However, the service delivery region we looked at may represent, for reasons already mentioned, one of the final frontiers of managed care's impact on psychiatry, thereby providing a fertile substrate for assessing managed care's current influence on private practice. Offsetting this shortcoming is the likely representativeness of the respondents. Since the questionnaire was mailed to a randomly selected subgroup drawn from a homogeneous population (voluntary faculty, full-time private practitioners), there is little reason to suspect significant variation among respondents, nonrespondents, and those who were not included in the mailing.
Yet despite these caveats, the dilemma seems clear: without managed care participation, a practitioner may lack an adequate flow of new patients, so the future may mandate a reconciliation to lower earnings and administrative oversight. MCOs have not had difficulty filling their provider panels, suggesting that the fear of declining patient flow with nonparticipation in managed care has so far outweighed the decreased compensation for working in such settings.
Perhaps the greatest irony in this still-evolving saga is that the upheaval may be unwarranted: outpatient psychiatric practice may never have contributed to the runaway expenditures that so alarmed third-party payers.22 As reforms aimed at inpatient abuses spread, the private psychiatrist became caught up in the juggernaut of cost-control mechanisms and oversight. Hymowitz remarked in a Wall Street Journal article:
What's really sad is that outpatient therapy was never part of the rising-cost problem. Even when therapy benefits were very generous, every study showed that 85% of patients ended treatment before the 25th visit on their own. . . . In addition, utilization rates have been steady for 15 or 20 years. There really is no reason to manage outpatient therapy, and the management of it costs almost as much as the therapy itself. . . . The big cost problem was inpatient care. . . . The average number of outpatient therapy visits has been six to eight (per patient) for decades . . . so trying to clamp down on outpatient services to control costs doesn't make sense.8
QUESTIONS AND ANSWERS ABOUT MANAGED CARE TRENDS
Q: What can we as psychiatrists do about the trends you report?
A: Well, on the provider side, if psychiatrists refused to join MCOs, that would have an impact—but there's no sign of that being remotely possible. There is no shortage of psychiatrists willing to join MCO provider panels.
Q: You have focused on provider-side satisfaction. Is there any good information regarding satisfaction on the consumer side?
A: Not much. One reason for this, especially in psychotherapy delivery, is that as quality assessment becomes more data-driven, the issue of patient confidentiality remains a large and unresolved problem. But large numbers of anecdotal reports of dissatisfaction with quality are showing signs of producing effects—for instance, in the form of possible federal legislation leading to better MCO quality assessments (such as HMO report cards) and guaranteeing patient rights.
Q: Satisfaction is a complex concept. Are you sure your survey elicited all the important determinants that affect professional satisfaction for your study sample?
A: No. In fact, we're sure that it didn't. More detailed demographic data, better measurement of putative MCO-related practice effects, and consideration of factors related to the overall medical economic environment are crucial additional points that future studies should incorporate.
Q: Given that we will never go back to the old ways and that cracks are appearing in the managed care system, do you see any signs of going to a single-payer system?
A: It may be on the horizon, but relatively far off. When President Clinton's federal health care initiative was defeated, insurance companies were empowered to create their own product. So given the relatively recent political defeat of a national health plan, and the economic power of health insurance companies, it's unlikely that a federally based single-payer system will arise in the near future.
References
This article has been cited by other articles:
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  P. E. Garfinkel, R. M. Bagby, D. R. Schuller, S. E. Dickens, F. S. Schulte, and L. Fitzgerald Gender Differences in the Practice Characteristics and Career Satisfaction of Psychiatrists in Ontario Acad Psychiatry, December 1, 2004; 28(4): 310 - 320. [Abstract] [Full Text] [PDF]
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 A. Fothergill, D. Edwards, and P. Burnard Stress, Burnout, Coping and Stress Management in Psychiatrists: Findings from a Systematic Review International Journal of Social Psychiatry, March 1, 2004; 50(1): 54 - 65. [Abstract] [PDF]
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