John A. Talbott, M.D.

"Health care in the United States has been profoundly affected by managed care over the past two decades. As someone who has been active in consulting and teaching in Europe during this period, I was curious why government officials and practitioners were asking so many questions about length of stay, staffing, and costs in America. Over the past three years, the questions have been about managed care itself. Therefore, when I was offered the opportunity to spend a year in Europe, I decided to look at what inroads managed care has made," says Dr. Talbott.

Europe faces the same globalization and cost pressures as the U.S. With 250 million people, managed care should have been as appealing to the European CEOs as to their counterparts in the U.S. At least that was what Dr. Talbott had thought. But, first he had to face the reality that there was no "Europe," and "not everyone agrees with every thing….It was impossible and dangerous to generalize." His second mistake was to start with an erroneous assumption. "We are all children or grandchildren of immigrants, many of them from Europe, and we assume that the Europeans are like us. They are not.” According to Dr. Talbott, there is a great deal of suspicion of things American and of American "imperialism." There is great diversity in Europe-- in religion, ethnic background, politics and culture. In many areas, however, Europeans emulate Americans. For instance they build "American" houses, eighteen-year-old Europeans are the same as eighteen-year-old Americans; and yet they don't want "American money-grubbing capitalism" or American work hours or American "culture."

The same is true for health and mental health care, where there is great diversity. Many systems are government-owned and operated; others have private insurance. Some are hurriedly modernized, others are outdated. In general, there are fewer community services, less accreditation and quality assurance processes, fewer practice guidelines, slower development of services research, and psychiatrists practice differently. These diversities do not even include Eastern or Central Europe.

According to Dr. Talbott, some things American do work "in translation" in Europe's business world, but others don't. He considers health and mental health care as to be part of that business world. "Coke franchised and succeeded; Pepsi tried to do it themselves and was plagued by bad management. McDonald’s changed the product to fit the cultures. Disney blindly assumed that what worked in the strawberry fields of Anaheim would work 40 miles outside Paris and they failed". On the one hand, American managed care companies figure that American-style managed care will work in Europe because of global economic pressures. They assume that the Europeans will respond to facts-- not philosophy, values or contexts. On the other hand, they assume that it will not catch on in Europe because there is a long tradition of governmental administration and universal health coverage, and because the polls show that the Europeans don't want to go that way.

To explain this point, Dr. Talbott wants us to understand how mental health services on both continents developed. The American system evolved through care in poorhouses and workhouses to the dominance of psychiatric hospitals largely administered and financed by the states. Later, there was the development of psychiatric units in general hospitals, expansion of outpatient clinics, as well as private office treatment, financed by multiple sources including insurance companies. In the 1960's, American community mental health centers expanded as a result of federal dollars. Currently we have a system with "private," "not for profit," and "public" hospitals, clinics and practitioners. The European mental health services, according to Dr. Talbott, also evolved through the stages of "no systematized care" to psychiatric hospital care to the development of alternatives, which included general hospitals and community care. But at least since the 1930's, it has been powered by national financial and regulatory support. Thus the mental health workers in Europe usually bill or work for the state. Therefore the history, language and consequences of health care reform are often impossible to translate from their system to ours.

Dr. Talbott describes managed care in America as consisting of four elements. It is a way of providing care, a philosophy of care, a way to finance care, and a way to control costs- all intertwined. It provides care by using provider groups, provider networks, and in the case of mental health, mental health carve-outs. Its philosophy of care involves health maintenance, prevention / limitation of hospitalization and emphasis on alternatives to hospitalization. It is a way to finance care through contracting providers at fixed rates to those who agree to use these providers and it is thus better able to predict costs than the traditional insurance plans. Finally it is a way to control costs, by covering some but not other illnesses, by utilizing guidelines for treatment and by employing reviewers to determine the "medical necessity" for the proposed care.

What has been happening recently in Europe, according to Dr. Talbott, sounds to Americans like the "hoof beats" of managed care. They have started formulary restrictions, they are limiting the number of drugs prescribed, they are encouraging generic substitution and promoting over-the-counter remedies. Every western European government is concerned with the rising cost of health care and its share of the GDP, but very few countries, excepting Switzerland, have tried HMOs a la Americaine. While the data are poor, there does seem to be a decrease in the portion of the health dollar going to mental health, the same trend as was noted in the U.S. Some purely monetary changes have also been made in the European system. What used to be "full care for everyone at whatever cost" has changed, and the concept of reduction in coverage and supplementary deductions or co-payments has been introduced. The rationing of care and long waiting periods for procedures have become problems. Fees are controlled and unions have been established to negotiate them. Many countries overtly or covertly control the numbers of physicians produced and what specialties they may enter. Many changes have also affected psychiatric clinical practice. Hospitals have been closed and there is a conscious attempt to shift towards primary care, including primary care gate keeping. There is an insidious tension between the patient and the physician as insurance companies come increasingly between them. In Switzerland, there is decreased autonomy for the physician and in Italy there is increased effort to introduce practice guidelines.

According to Dr. Talbott, universal coverage in Europe is far superior than in the U.S. Their governments are more involved in national health planning and provision than ours. Whereas we have a bottom-up system in which managed care makes many decisions, they have preserved physician decision-making for the most part, although we both use carved-out service groups. We both utilize many of the same purely financial techniques, but we are pioneers in restricting benefit packages, using private insurers, utilizing deductibles-- including additional ones for mental health-- co-payments, annual/lifetime limits and case management of high utilizers. While in Europe they have recently started pharmacy restrictions, we are way ahead in limiting coverage based on "medical necessity." In addition our reviews of patient care are far more developed.

Dr. Talbott believes that while both sides of the Atlantic have been active in improving quality and standardization, we have more standards, protocols, treatment guidelines and credentialing.

In conclusion, Dr. Talbott says "My project was to determine whether American-style managed care had been adopted in Europe, and whether such techniques would be adopted in the future. The answers seem to me clear: No, American-style managed care has not been adopted in Europe, and yes, these techniques are and will be adopted in Europe in the future."