by John Barton

At a time when the nation’s health maintenance organizations are among the favorite targets of physicians, politicians and even potential members, M-CARE — the University of Michigan’s HMO — is drawing praise instead of criticism.

Under Executive Director Zelda Geyer-Sylvia’s lead-ership, M-CARE has managed to reverse a frustrating series of annual financial losses.

In recent months, M-CARE has garnered national recognition and high rankings in such HMO-related categories as customer satisfaction, quality of care and overall excellence. Enrollment, which includes about 51,000 members from U-M, has skyrocketed to more than 180,000 since the plan was conceived a little more than 16 years ago by a team of researchers and planners led by John Forsyth (currently chairman and chief executive officer of Wellmark Blue Cross and Blue Shield for the states of Iowa and South Dakota) and George D. Zuidema, M.D.

"We were at a point in 1984 when people were beginning to think HMOs would be the answer to saving the health care system," recalls Zuidema, who lives in his hometown of Holland, Michigan. Zuidema, who was on the U-M Medical School faculty from 1960 to 1964, returned after 20 years as surgeon-in-chief and professor of surgery at Johns Hopkins to become professor of surgery and U-M vice provost for medical affairs.

"There was a general sense that we should somehow get involved," he continued, "but we first had to figure out how HMOs operated. Then we had to figure out what we would have to do to make such a plan acceptable to the medical staff and faculty before presenting it to them and their families."

Two years later, M-CARE was launched from its drawing-board infancy and toddled into reality. Zuidema says he is not surprised at M-CARE’s steady growth in membership or prestige.

George D. Zuidema

"As a matter of fact," he explains, "It appears that many of the things that I had hoped would happen actually did happen. I am pleased with the way things turned out in the same way that you want to be able to say you gave birth to a healthy child."

This particular health-care child may have started out small, but it has grown to include a membership base scattered over 16 Michigan counties. M-CARE holds contracts with nearly 2,000 employer groups and has access to a cadre of more than 5,500 physicians and affiliation with more than 40 hospitals in southeastern Michigan, Flint, Jackson and Lansing.

M-CARE also supports Medicaid and Medicare plans. Medicare is a federal health insurance program for the elderly and disabled. Medicaid is a federal assistance program that pays medical bills for eligible needy persons.

By definition, an HMO is an association that provides a specified package of health care for a fixed sum that is paid in advance and furnishes coverage for a specified period of time. Generally, a patient cannot seek care outside the providers or hospitals under contract with the HMO. Primary care physicians in an HMO provide and coordinate a member’s health care, approving or requesting referrals to specialists in the plan’s network for consultation.

HMOs have drawn the fire and ire of critics because of strictly interpreted coverage limitations, and allegations that patients are frequently deprived of appropriate care because non-medical personnel are making treatment decisions.

"Everyone seems to be beating up on HMOs, although our own M-CARE gets very high marks from members and providers alike," observed Gilbert S. Omenn, M.D., Ph.D., during a recent forum on health policy that was held at the University of Michigan.

Omenn, the chief executive officer of the U-M Health System and the University’s executive vice president for medical affairs, went on to say during the forum: "There is no doubt in my mind that a compromise patients’ bill of rights, more focused on assuring prompt resolution of clinical care coverage disputes and less on generating business for attorneys, would be widely acceptable. Unfortunately, the advocates on each side have staked out extreme positions."

M-CARE’s niche lies somewhere short of those extremes, according to the organization’s executive director, Zelda Geyer-Sylvia. "What we are finding is that our M-CARE members are generally satisfied," she says. "People are aware of the negative images that are out there, but they say, ‘that is an HMO, but it is not my HMO.’

"That means our main focus is on our delivery system, which has as its heart the U-M Health System. We have a lot of relationships with very good health systems throughout our service area, including Beaumont, Oakwood, St. John, Genesys and Providence, but our base is still the U-M Health System."

Those close ties to the U-M Health System give M-CARE an advantage over competing HMOs, she continues. "For example, we use all of the Medical School-developed and faculty-developed clinical guidelines — the guidelines on how to practice. We adopt them, don’t have to develop our own, and it turns out to be a very good partnership for both of us.

"M-CARE is different because the Medical School adds a lot of value in terms of the quality of our programming."

The opposite is also true, according to Omenn, who points out M-CARE’s importance to the U-M Health System. "M-CARE gives us a window on the insurance world at a time of unprecedented changes," he says. "It also gives us an opportunity to experiment with managed care strategies and instruction. And it’s an excellent health plan option for our employees."

It is also an extremely important source for scientific research, with M-CARE members having the opportunity to voluntarily participate in a number of wide-ranging studies involving everything from diabetes to pediatrics and pharmacology.

"We also have an educational mission," Geyer-Sylvia says. "We have a couple of grants — one from the state Medicaid program and another sponsored by the Robert Wood Johnson Foundation to promote interdisciplinary education in managed care for physicians, nurses, social workers and pharmacists.

"We have a real commitment to Medicaid and Medicare and continue serving these populations because they are important to us as part of our mission to serve the community."

Geyer-Sylvia earned her master’s degree in public health from Yale in 1976. She has spent nearly 15 years in the health care plan industry, including a stint as a regional administrator for Vermont Community Health Plan which developed the first HMO in that state.

She came to M-CARE in 1998, after Community Health Plan merged with Kaiser-Permanente, the largest HMO in the country. Under Geyer-Sylvia’s leadership, M-CARE has managed to reverse a frustrating series of annual financial losses.

"There continues to be a need for physicians and educators to work together on the managed care evolution. Managed care is evolving but probably will not go away," she says, "and that’s why it is so important for us to partner with the health care delivery system.

"It allows for all the different pieces of the system — including the physicians and the hospital — to really understand what the financial issues are in relation to health care. It helps them understand that there isn’t an open checkbook out there. There are financial realities, and employers are only going to pay just so much. We bring a consciousness of the need for cost efficiency.

"In addition, a strong partnership with the health care delivery system allows us to focus on providing high quality care. We can demonstrate our quality — in a tangible and measurable fashion — to employer groups and others who want to take a look at our performance."

Omenn says the achievements of the recent past have been impressive, but they have also generated high expectations for the future. "I expect M-CARE to be an increasingly well recognized model of a top quality, financially sound health care program which pays its physicians, hospitals and other providers well while offering employers and members highly cost-effective and innovative benefit programs for clinical care, home services, patient education and health promotion."

Geyer-Sylvia acknowledges the challenges that lie ahead. She says M-CARE will fulfill its future mission through planned, careful and controlled growth. "What we have to do is make people understand that there are differences between us and those big insurance companies who have adopted managed care. We are not an insurance company. M-CARE is a health maintenance organization that believes in prevention and quality services."

The Road to a Successful HMO

1984

The University of Michigan, faced with a national trend toward managed care in medical services delivery as well as rising benefit costs as an employer and the migration of U-M employees to health care delivery organizations other than the U-M, contemplates the establishment of its own HMO. A group of researchers and planners led by John Forsyth and George Zuidema, M.D., begins exploring the feasibility of establishing a non-profit health maintenance organization at the U-M.

1986

M-CARE is created by the University and is licensed by the state of Michigan. With its entrance into the managed care market, M-CARE becomes one of the first University-owned HMOs in the country.

1988

Warner-Lambert (now Pfizer) becomes one of the first major employer groups to offer an M-CARE health plan to their employees.

1993

Recognizing the need to grow in order to meet market demand, M-CARE begins expanding beyond the Ann Arbor service area and introduces two additional service plans — M-CARE Point of Service and GradCare. M-CARE Point of Service allows members access to providers outside of the M-CARE network. GradCare offers a plan with enhanced affordability and accessibility for graduate students at the U-M.

1995

Consistent with the mission of M-CARE and the Health System, M-CARE begins participating in the federally-funded Medicaid program. M-CARE receives one-year Accreditation from the National Committee for Quality Assurance (NCQA).

1996

M-CARE reaches an enrollment milestone of 100,000 members. In the next few years, membership will increase to over 180,000.

1997

Again affirming its mission of providing service across the community and distinguishing itself from other managed care organizations, M-CARE establishes the M-CARE Senior Plan to serve the Medicare-eligible population.

1998

M-CARE works with the U-M Health System in its development of Partnership Health for Ford Motor Company. M-CARE and the Health System go on to develop a similar insurance product, Activecare, in partnership with General Motors. M-CARE receives a four-star national rating for its HMO in US News & World Report’s guide to managed care plans.

1999

M-CARE receives a five-star rating from Health Grades.com, making it the top-rated plan in Michigan. In addition, M-CARE is selected as one of 38 managed care organizations from across the country, and the only one from Michigan, to be included in the first edition of Quality Profiles: In Pursuit of Excellence in Managed Care, produced by the National Committee for Quality Assurance with support from Pfizer, Inc.

2000

M-CARE receives an Excellent Accreditation — the highest possible — from NCQA for its Commercial, Medicare, and Medicaid HMO health plans. In addition, the Health System and M-CARE receive a $150,000 one-year grant — one of only six such grants awarded — from Partnerships for Quality Education and the Robert Wood Johnson Foundation, administered by the U-M Geriatrics Center, to develop interdisciplinary teaching programs for health professionals who provide care to elderly patients in a managed care system. M-CARE’s successful evolution continues as it rolls out a five-year (2000-2005) strategic plan and continues its return to profitability.