A British-American psychologist on core assumptions of managed healthcare and suggestions for clinical program development

by J. R. Skidmore, Ph.D., C.Psychol.

Published in The Health Psychologist, Spring 1999

©1999 by the American Psychological Association

All Rights Reserved.

Reprinted with Permission


Reference: Skidmore, J. (1999). A British-American psychologist on core assumptions of managed healthcare and suggestions for clinical program development. The Health Psychologist, Spring, 21 (2), 7, 24.


New initiatives continue to emerge from the changing medical landscape of managed healthcare. Integrated Primary Care (IPC) was described in recent issues of The Health Psychologist and, basically, integrated primary care represents one of the latest initiatives within large health maintenance organizations such as Kaiser-Permanente to extend what might be called 'managed care principles' into primary care. It is well-known that managed care has become the shorthand term that subsumes a number of radical changes in healthcare over the last decade or so. Descriptions of this revolution in healthcare have been published in the American Psychologist (Keisler & Morton, 1988), and the benefits of clinical/health psychology and behavioral medicine in American managed healthcare systems are well documented (Cummings, 1991).

The British National Health Service (NHS) is a socialized medical system that for 50 years has provided healthcare that remains free at the point of delivery. But in actual fact, while politicians and commentators tend to highlight differences between 'market-driven medicine' in the USA and 'socialized medicine' in the NHS, there are remarkable similarities. For example, while working Americans routinely have health insurance deducted from their paychecks, likewise 'national insurance' is deducted from the pay of British employees. In both countries, employers transfer this money either to insurance companies, or to the government, for the purchase of healthcare. Whereas Americans have numerous healthcare managers via a myriad of federal and state agencies and private insurers, the British government can ostensibly function as one giant integrated manager. Yet they also are split into regional health authorities and local primary care groups. Historically the de facto mechanism which evolved to control unlimited spending in national healthcare has been the interminable wait-lists. However, political pressures are mounting to the point that managed care concepts of cost-efficiency and evidence-based treatment have become central to the NHS policies that are now emerging.

Health economist Uwe Reinhardt has been credited with saying that "all health systems may eventually converge to a three tier system that offers high quality, fee for service care to the very rich; insurance based managed care for the expanding middle class; and rough and ready care for the poor" (Smith, 1999). The vast majority of the British population obtains all its healthcare from the NHS, and the British public and medical establishment holds the NHS as almost sacred. But there are major cracks in the system. The royal family, the wealthy and the well-connected do not wait in NHS queues. More importantly, there is a small but growing market for people who want the wider choices available with private medical insurance. This is of course similar to the managed care plans that cover most Americans.

While managed healthcare topics have been written about extensively, it is difficult to find a concise description to specify the main ingredients of managed care. Most articles on managed care either tout its inevitability and the attendant benefits, or warn of the iniquities and shortcomings of managed care. Without detracting from the value of these debates, there may be substantial utility in having a clear and concise description of the main ingredients or core assumptions of managed healthcare.

It seems reasonable to generate a list 'core assumptions' by extrapolating from the behavioral contingencies one can observe in managed care practices and policies. In my opinion, managed healthcare proposals all share a few core assumptions which can be summarized as follows:

Core assumptions of managed healthcare:

1.a. Organizations with most at stake in healthcare finances can and should control and manage the healthcare system. These include the health insurance corporations, hospital parent-companies, and large health insurance purchasers (big organizations; state and federal governments).

2.a. Market-driven and outcomes-based management is not only more efficient but also could and should lead to better quality healthcare. In other words, you can have both lower costs and better quality in healthcare with more centralized management.

3.a. Healthcare costs can be cut without harming the quality of healthcare. This can be attained by limiting the fees charged by doctors and therapists, reducing the expenses of hospitals and clinics, and restricting the choices available to patients.

4.a. Better quality healthcare can be attained by offering rewards and incentives to those healthcare providers (doctors/therapists or hospitals/clinics) whose treatments are more effective as defined by outcomes that are more robust and/or longer-lasting. Managers should require empirically-validated treatments or evidence-based practice.

5.a. It is necessary for business and public relations that managed care systems operate within legal standards and socially-accepted ideals of fair practice, accepted medical guidelines, and some degree of apparent compassion for patients/customers.

Note: The basis of numbering with numerals and letters will become apparent and useful for comparisons between the different lists (a, b & c) in this article.

These assumptions are simply one set of logical statements that seem to reflect (in my opinion) the apparent presuppositions of most versions of managed healthcare. It does not matter whether the list above or some other summary is used. The point is that it may be useful to state the presumed core assumptions of managed healthcare in an explicit manner. Admittedly this list of core assumptions is just an approximation. Yet understanding the assumptions (or contingencies) of systems and organizations can potentially allow psychologists and other clinicians to have greater influence in the development and structure of treatment programs and services.

It may be obvious, but still needs to be stated, that psychologists and other healthcare providers may not necessarily share the above managed care assumptions. Frequent complaints by healthcare clinicians are widespread. Sometimes the cries of foul-play represent the self-interest of clinicians whose fees and practices have come under greater scrutiny and control. More often (I think) the concerns of doctors and therapists reflect professional integrity and are offered in defence of compassionate care for their patients. Many of the current dilemmas may be predictable when one examines the assumptions (or, contingencies) which underlie managed healthcare. A common problem might be characterized by the denial of resources by a manager, followed by protest from a psychologist or other clinician. However, an examination of the core assumptions (above) serves as a reminder that healthcare managers operate according to different rules or assumptions. Instead of raising objections based on professional guidelines and clinical standards, which managers may not understand, one can raise concerns in a manner that addresses one or more of the core managed healthcare assumptions. One might present proposals for more resources or additional clinical services by putting such appeals in terms that fit managed care assumptions.

By drafting programs and measuring outcomes in ways that correspond to managed healthcare, one improves the likelihood of garnering greater resources for health psychology and behavioral medicine programs. For illustration, below are suggestions for program development which have been numbered in parallel with the 'core assumptions of managed healthcare' described earlier. None of these clinical suggestions are novel of course, but they serve to illustrate the possible links between the assumptions of managed healthcare and the development of clinical programs.

Suggestions for program development in managed healthcare settings:

1.b. Recognize that managed healthcare organizations will think in terms of all patients with the diagnosis or condition that your program might target (i.e., also described as capitated care). The proposed program will be judged on its suitability for treating the entire population, not just your particular patients. In other words, a primary question becomes: Is this program the best way forward for every patient?

2.b. Highlight outcomes that have obvious cost-benefit implications as well as clinical effectiveness for patients. For example, while one could show that pain management programs lead to reductions in pain severity, decreased emotional distress, and improved physical functioning, it remains important to also show that patients will probably utilize fewer medical resources following their treatment in the proposed program.

3.b. Demonstrate some degree of efficiency in programs and services. While this can seem like an endless demand to constantly 'peddle faster' with fewer resources, one tries to remain assertive about what is needed to do the job while also showing efficiencies in practice. For example, patients may be treated in small groups that actually may provide enhanced therapeutic benefit for many patients (albeit not all) while also offering significant cost savings.

4.b. Develop programs based on clinical interventions with proven effectiveness. Those treatments that fit evidence-based practice guidelines are certainly more likely to be funded in the managed healthcare environment.

5.b. Describe programs in language that demonstrates clinical compassion, but also provides enough business-plan detail to demonstrate some measurable cost savings or (better yet) the generation of income. In market-driven managed healthcare one will be increasingly constrained to justify treatment programs with proven outcomes that benefit most patients and at the same time. At the same time, one can sometimes show that clinical effectiveness and compassion are 'marketable features' that reflect well upon the organization or system.

In the United Kingdom of Great Britain, the NHS 'socialised medicine' seems just as bound to cost-control measures as American healthcare in the private sector. This is not surprising when one remembers that voters do not want increased taxes, any more than shareholders want decreased profits in health insurance companies. Thus, for clinical health psychologists on either side of the Atlantic, the need to work eff h¶` 0 iÅ managed healthcare systems will remain very important for some time.

Nonetheless, one may wish to use social influence or political pressure to change the system or find other mechanisms for funding healthcare. Even in this regard it remains useful to think about the 'core assumptions' of managed care. Another list is offered, again numbered to correspondence with core assumptions. Specifically, one could ask the following critical questions:

1.c. Given that individuals actually pay (with taxes or insurance premiums) for every healthcare system in the United Kingdom and the United States, might it be reasonable for individuals to have more choice in the matter? This kind of question certainly seems relevant to proposals such as 'individual medical savings accounts' that have been discussed in political thinktanks in America.

2.c. Can one really have healthcare both ways, cheaper as well as better? This common assumption may be unrealistic, as well as logically flawed. Indeed that is why people already choose to attend renowned private hospitals in both countries.

3.c. Does the least expensive provider lead to good value for the same treament? Does it matter which surgeon does the operation, and which psychotherapist does cognitive-behavioral therapy? Many people believe, and there are good studies that suggest some therapists are much better than others in providing effective treatment (Luborsky, et al., 1997).

4.c. Do large group studies really offer the best standard to determine the best treatment for individual patients? If not, how are treatment decisions to be made?

5.c. In which circumstances would you as a clinician put compassion over profit, and when might this apply to a healthcare organization or system?

Hopefully it is apparent that one can ask critical questions about the structure of healthcare systems and future options, while at the same time working effectively in managed care organizations. Like most things, there are weaknesses and strengths. Ideally the identification of 'core assumptions' in this article can help illuminate both the shortcomings and the possibilities in managed healthcare.

Author's Note: J.R. Skidmore, Ph.D., C.Psychol. was educated in the USA and held academic and clinical positions in America before accepting opportunities abroad. Currently he serves as Consultant Clinical Psychologist and Head of Specialty for Pain Management at Princess Royal NHS Hospital and King Edward VII Hospital, south of London. Address any correspondence via mail to: j.skidmore@virgin.net.



Cummings, N. A. (1991). Arguments for the financial efficacy of psychological services in health care settings (p. 113-126). In J. J. Sweet, R. H. Rozensky, & S. M. Tovian (Eds.), Handbook of clinical psychology in medical settings. New York: Plenum Press.

Keisler, C. A., & Morton, T. L. (1988). Psychology and public policy in the "health care revolution." American Psychologist, 43 (12), 993-1003.

Le Grand, J. (1998, September 26). US managed care: Has the UK anything to learn? British Journal of Medicine, 317: 831-832.

Luborsky, L., McLellan, A. T., Diguer, L., Woody, G., & Seligman, D.A. (1997). The psychotherapist matters: Comparison of outcome across twenty-two therapists and seven patient samples. Clinical Psychology: Science and Practice, 4 (1), 53-65.

Smith, R. (1999, January 23). The NHS: Possibilities for the endgame - think more about reducing expectations. British Journal of Medicine, 318: 209-210.


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