blank.gif (51 bytes) Medicine

Managed Care:
The Camel

by Diane Alden

ccording to an ancient fable, the camel was once a fine Arabian Horse, the very embodiment of spirit and intelligence. Then one day an evil genie placed a curse on the equine animal, declaring that henceforth all Arabian horses would be subjected to creation by committee. A few of the enchanting creatures escaped. The rest were twisted into disagreeable beasts with foul breath, difficult natures—serviceable, but capable of mischief on a grand scale.

Like a fine Arabian horse, health care in the United States was once the envy of people worldwide. Today it is a camel, subject to the whims and manipulation of corporations, government, politicians and anyone with an ax to grind—serviceable, but able to do major damage to the health and well-being of the citizens of the United States.

The Process of Becoming a Camel

The response to high medical costs in the 1970s and ‘80s was increased government involvement and the creation of health maintenance organizations (HMOs). At first they appeared to be a panacea for skyrocketing medical costs. The consolidation of health care brought certain efficiencies of scale. However, as time passed, the institutional dynamics of HMOs began to place cost containment above the doctor-patient relationship and in many instances the quality of patient care suffered. Corporations put the doctor in the position of gatekeeper. In addition to trying to decide what was best for the patient, he also was asked to base those decisions on cost factors.

All too often the doctor became an accountant as well as a caregiver. This untenable position led to compromise with medical ethics and placed a immense strain on one of life’s most crucial relationships—between doctor and patient.

"Managed care, as we know it, is inherently unethical in its organization," declared Lynda Peeno in testimony before the U.S. House of Representatives. "I exemplified the ‘good’ company doctor," she said. "I saved half a million dollars by denying a man heart surgery. I felt little pain and remorse at that time. According to the HMO I was not denying care. I was only denying payment."

As medical director of an HMO, Dr. Peeno was trained by the corporation to use the denial process to keep costs down. Dr. Peeno feels she was asked to make medical decisions by figuring out how to give patients minimal services.

Eventually, Dr. Peeno questioned the moral dilemma involved in her relationship with the HMO and quit.

Will the numerous legislative and executive branch responses to the managed care and health-care quandary be what the doctor ordered? Or are all these good intentions and the flurry of legislative activity merely rearranging deck chairs on the Titanic?

A Nose Here, A Hump There

By championing the patient against the HMO, Congress appears to be responding to a need. However, it is most probable that legislative edicts will only further burden the health care system. One of the most serious casualties will be the private group practice which delivers some of the best care in the country.

Cuts in reimbursement from Medicare and insurers are making it financially untenable for doctors in private practice to continue. Higher administrative costs—often imposed by government-required paperwork—are driving many private practitioners out of business. Currently proposed legislation does nothing to address this serious problem.

One Las Vegas physician, who asked not to be named, has had his own problems with HMOs. After doing a complicated C-section on an emergency basis, the patient’s HMO reimbursed the doctor 37 cents— because in trying to save the mother and baby’s lives, he had exceeded the limit his HMO had stipulated was available for surgery. Such stories are not merely anecdotal; they show why the current effort to reform managed care has such force.

The likely consequence of more government interference will be the incremental federalization of national health care. The Health Insurance Portability Act, Kid Care and the Patient Bill of Rights of 1998 are merely efforts at fine tuning the ugly health-care beast. Current administration efforts to reform health care are nothing more than Clinton’s Health Security Act of 1993—and its accompanying bureaucratic entity, the National Health Board—recycled under different names. The National Health Board is renamed the Health Advisory Board, and in the context of legislation like Kennedy-Kassenbaum, is another step toward nationalization. But merely changing the names on bad policy does not turn a frog into a prince.

Bad policy means pages and pages of rules and regulations, which will become expensive mandates, exacting immense amounts of data from every interaction between doctor and patient. Under the new regulations, patients would be able to choose their own doctors, but the government would be demanding and setting treatments, determining fees for service and criminalizing ordinary interactions between caregiver, the patient and the source of medical payment. Even though it was defeated, the 1993 health care act is being reintroduced one ponderous counterproductive section at a time.

Robert Goldberg of the Medical Science Society Project in Washington asserts, "For the politicians, health justice as defined by their proposed legislation means creating the right to sue everyone in the business who isn’t already exposed to liability."

According to Goldberg, because of a quirk in present laws, health care plans and employers are immune from lawsuits by patients. That leaves only the physician’s malpractice coverage to be targeted, and that, in turn, makes it even more difficult for the private practitioner to survive in the new order.

Current congressional proposals will require complex grievance systems, mandated benefits, added rules and compliance processes. Increased legal liability will drive up costs and most likely prevent the formation of new initiatives. As a result, HMOs will merge into larger but still unresponsive entities, cutting off competition more than they do now.

Possible but Improbable Solutions

New health care initiatives, such as the recent development of direct contracting to employers and medical savings accounts, are the HMOs’ worst nightmare.

In 1997, a group of Minnesota employers including Cargill, Dayton Hudson, 3M, General Mills, Pillsbury and others formed the Buyers Health Care Action Group. The concept at the heart of this group’s effort is to have health care providers compete based on quality as well as cost.

Its subscribers receive cash to purchase insurance from 26 doctor-formed care entities collectively called ChoicePlus. The new approach appears successful and HMOs are losing subscribers in increasing numbers. The doctor-formed system is succeeding because it is built around the patient as well as the bottom line.

According to Steve Wetzel, director of the group, "Federal legislation would force us to contract with HMOs. Smaller systems could not afford to stay in business under proposed regulatory requirements."

Goldberg observes that because of the current mix of managed care attempts at self preservation, politicians in an election year and the Clinton administration trying to get their agenda passed piecemeal, "a successful free market approach to health-care is probably not in the cards."

Conclusion: The Camel

Many free-market observers recognize that what was formerly the finest health care system in the world is going to be subjected to even more layers of bureaucratic control and government micro-management than at present. Most likely, little will be done to control costs and improve the quality of care. The doctor-patient relationship will continue to deteriorate as each action between doctor and patient is subjected to administrative scrutiny and mountains of paperwork, and the doctor will continue to be the fall guy when things go wrong. Ominously, normal procedures will be open to criminal prosecution.

Once the envy of the world, U.S. health care—the Arabian horse—is in for a further round of creation by committee. Most of the large managed care systems, in conjunction with the government, seem in a rush to turn our already bad-tempered camel into an even more grotesque and cantankerous dromedary than the one we have now. u

Diane Alden is a contributing editor of Nevada Journal.

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