HMOs Fight the Sick Instead of the Sickness

Some weeks ago, a doctor I know received a mail solicitation from a company that promised to help him manage managed care. The secret to success? Physicians need to learn how to pick the right patients--healthy people who rarely, if ever, visit their doctor--and shun the unprofitable sick.

In the growing competition for health care market share, it is becoming clear that there is a group of customers the nation’s managed care companies definitely don’t want to attract. If patients are too sick and vulnerable, health maintenance organizations would prefer that they stay out of their marketplace.

One of the most effective ways to dump such patients is to drive the most ethical and compassionate physicians out of practice. A recent article in the New England Journal of Medicine explained why so many California physician groups are going bankrupt. Today, many HMOs use a system of “capitated” payments to control costs. Under capitation, physicians receive a small fixed rate per patient per month, no matter how sick the patient is and how much treatment and care he or she needs. Under this system, sick patients can literally bankrupt their physicians.

In Grand Rapids, Mich., pediatrician Beatrice Murray and her three partners devoted part of their practice to caring for children paralyzed in accidents or suffering from metabolic diseases, cancer, cystic fibrosis, cerebral palsy and kidney failure. These children must take multiple medications, may have breathing or feeding tubes, often need frequent visits to the hospital and will be severely, chronically ill for the rest of their lives.

Over the years, the HMOs in Murray’s area began to capitate her practice. With variations based only on sex and age rather than disease severity, all now pay fixed fees for all patients. Murray and her partners received from $6 to $30 per child per month to provide for all their out-patient needs.

To become more efficient, Murray’s practice hired a nurse to help coordinate care. The doctors also scheduled longer visits to provide more comprehensive and, they hoped, less costly care. Patients and their parents loved these additional services. But this very customer satisfaction and loyalty was, as Murray puts it, “the knife to the heart” of her practice. Parents of sick children told the parents of other sick children about the practice. More sick children came as patients. All these satisfied customers were bankrupting the group.

Under even the most generous health care system, caring for sick people is a difficult job. Doctors can’t always figure out what’s wrong with a sick patient and aren’t always certain about the proper course of treatment. Even under the best of circumstances, sick people can be angry, afraid, irritable, in pain or denial and resistant to following their doctors’ advice. This makes them a drain on the empathy of the most compassionate doctor.

Add to this managed care micromanagement of every clinical decision and you have a recipe for turning the care of the sick from a difficult mission into an intolerable burden. Under the 1-800-Mother-May-I system of HMO utilization review, doctors must get pre-approval for every treatment they prescribe and action they take. To really care for their patients, they must spend hours on the phone arguing with insurance company bureaucrats.

After a while, many doctors just burn out. “A sick patient comes into my office, and I wonder how much time it will take to care for them,” one doctor told me. Some physician practices refuse to fight insurance company denials of care for their patients. Some are unwilling to accept HMO patients and will take only those who can pay for their services out of pocket--a strategy that rewards HMOs and punishes the sick.

A recent PBS “Frontline” show about a group of physicians in Boston, “Dr. Solomon’s Dilemma,” chillingly documented just how HMOs turn physicians against the sick. HMOs now send physician groups weekly accountings of the cost of every pill a patient takes, test he receives, day in the hospital he uses or home care or physical therapy session he consumes. Any cost that is not covered by the increasingly parsimonious rates physicians receive for each patient comes directly out of the groups’ coffers. Not surprisingly, doctors begin to view a patient who has diabetes or heart disease or cancer not just as a sick person who needs compassionate care but as a financial loss.

In a truly remarkable feat of financial alchemy, insurers and other advocates of market health care argue that there isn’t enough money in the $1.2-trillion American health care system to care for the sick. The U.S. spends $4,600 per person per year on health care--four times as much as we do on national defense and twice as much as is spent by Western European nations, most of which have better health outcomes. A publicly coordinated universal system is the only way this country will ever save money on health care. As health care economists like Alan Sager at the Boston University School of Public Health have demonstrated, the administrative and clinical savings and cheaper drug prices that result are more than enough to buy care for everyone.

Which is why action on universal health care is increasing at the state level. Legislative or ballot initiatives supporting universal health care are being considered in Massachusetts, Maryland and Washington. Also, U.S. Rep. John F. Tierney (D-Mass.) has introduced in Congress a bill that would encourage states to develop their own systems of universal care by removing federal regulatory obstacles and providing planning and implementation grants.

Americans have a clear choice. We can continue using our premium dollars and taxes to finance an ever-increasing war against the sick. Or we can create a health care system that does what it’s supposed to do: Keep us healthy as long as possible and then care for us when we get sick.