OT Article on HMOs & profitability

[Guest guest]

I guess this is what my ped meant when he told me was not profitable.

3. " That cheap HMO you signed up for pays me only $8, or maybe $10 to $12 a

month to treat you, so I hope you don't come around too often. " Under a

system called capitation, many HMOs pay primary-care doctors a set amount

per month for each patient assigned to them. Even that amount can drop if a

doctor orders too many expensive referrals or hospital stays. So, sick

patients become a financial burden.

> ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

> Link to story on SmartMoney.com:

> http://www.smartmoney.com/smt/consumer/index.cfm?story=200008301

>

> SmartMoney.com: CONSUMER ACTION- August 30, 2000

>

> 10 THINGS YOUR HMO DOCTOR WON'T TELL YOU

>

> Smartmoney Table/Image - Go here to view:

> http://www.smartmoney.com/smt/consumer/index.cfm?story=200008301

>

> ROSEMARY DUDLEY TRUSTED her HMO doctor. After all, she worked in his

> office

> as his nurse. So, in late 1997, when he told her a CAT scan showed no

> recurrence of the cancer she'd battled for two years, she believed him.

>

> And she wasn't surprised when he insisted that a referral to a cancer

> specialist for the knot on her jaw wasn't necessary. Her health

> maintenance

> organization paid him thousands in bonuses for holding the line on such

> costs.

>

> About four months later, Dudley came to know something else. Her cancer

> had

> returned, crawling beneath the skin on her face. A January 1998 CAT scan

> --

> ordered by another physician -- showed it had moved to her lungs and to

> the

> bones in her ribs, hips and legs. It was terminal.

>

> The 67-year-old Texas woman is now suing her doctor and former employer --

>

> who's fighting Dudley's suit and who testified that the reason he didn't

> like referring to the oncologist was because she interfered with his

> patients' care. Dudley, along with a separate group of patients and a

> group

> of Fort Worth-area physicians, also sued the HMO that offered docs the

> financial incentives, Methodist Health Plan. paid almost $6

>

> million to settle those two class-action suits, plus resolved Dudley's

> case

> in an undisclosed settlement. Meanwhile, the Texas Department of

> Insurance

> fined $100,000, citing a state law banning financial incentives

> that

> provide an inducement to limit necessary care. It ordered the HMO to pay

> another $3.4 million to doctors financially penalized under the plan.

> While

> it's generally difficult to sue HMOs for malpractice, the cases against

> instead focused on treatment incentives and disincentives, which

> can

> be illegal under Texas law.

>

> But this summer, ruling in another case, the U.S. Supreme Court said such

> incentives don't violate an HMO's fiduciary duty under federal law. " In

> an

> HMO system, a physician's financial interest lies in providing less care,

> not more, " Supreme Court Justice Souter said. " No HMO organization

> could survive without some incentive connecting physician reward with

> treatment rationing. "

>

> That ruling calls into question the various laws against incentives and

> disincentives in Texas and 22 other states. It also raises the issue: If

> such incentives are legal, how could they affect your care?

>

> Following are some things your doctor won't tell you as you sit across

> from

> him on the examining table, backside to the breeze. He may not even admit

>

> them to himself -- or if you're lucky enough to have a conscientious

> doctor,

> they may not matter much. Not every HMO uses all these measures to

> pressure

> docs into limiting care. But you can bet the contract your doctor signed

> with your HMO contains a few.

>

> 1. " If I order expensive treatments for you, the cost might come out of my

>

> pocket. " In the Texas case, ranked physicians based on how much

> their

> patients cost the HMO. It then withheld up to 50% of the base pay of

> doctors who ordered a lot of care, with the holdback dangled as an

> incentive

> to get their numbers in line. Otherwise, they'd lose the money. Plus,

> doctors who prescribed more than a set limit for drugs had to make up as

> much as 35% of the excess, deducted from their pay.

>

> 2. " On the other hand, if I order up less care, your HMO might send me a

> bonus check. " Herdrich, the Illinois patient in the Supreme Court

> case, waited 14 days after going to her HMO doctor for pain in her groin

> before getting the expensive test that diagnosed her problem.

> Unfortunately,

> by then her appendix had burst, infecting her abdominal cavity. After

> finding out that her HMO gave year-end bonuses to doctors who, among other

>

> things, economized on the use of diagnostic tests, she sued it, claiming

> it

> had violated its fiduciary duty to her as a patient. The Supreme Court

> held

> that an HMO's fiduciary duty doesn't stretch that far under federal law.

>

> 3. " That cheap HMO you signed up for pays me only $8, or maybe $10 to $12

> a

> month to treat you, so I hope you don't come around too often. " Under a

> system called capitation, many HMOs pay primary-care doctors a set amount

> per month for each patient assigned to them. Even that amount can drop if

> a

> doctor orders too many expensive referrals or hospital stays. So, sick

> patients become a financial burden.

>

> Just ask Dr. Beatrice Murray, a pediatrician in Grand Rapids, Mich. She

> got

> a good reputation for treating the many problems of children born

> prematurely. That's what put her out of business.

>

> " The number of our special needs cases just exploded, " she explains. But

> the monthly stipend from the HMOs didn't. The amount varied by the

> child's

> age and the HMO contract, but for a two-year-old, she says she usually got

>

> $6 to $9 a month. Which might be fine if the child was healthy. Her

> patients weren't.

>

> Dr. Murray says she tried to explain to the HMOs, but they seemed all too

> willing to lose her and her patients. The 52-year-old doctor lost her

> private practice this past May. She's now a salaried employee for a

> federally funded clinic for the poor.

>

> 4. " If you become too much of a financial drain, I have ways to make you

> walk. " Some doctors head off the problem by saying they don't treat a

> certain type of (read expensive) patient. Dr. Murray recalls the mothers

> who brought their triplets to her, complaining they couldn't find another

> pediatrician who treated multiples.

>

> But sometimes the doctor already has a patient before he develops diabetes

>

> or cancer, or contracts AIDS. For those situations, there's " turf and

> surf, " says a Texas lawyer representing seven patients who claim their

> health-care group discriminated against them because of their disabilities

>

> -- illnesses like cancer, rheumatoid arthritis and heart problems.

> Doctors

> use tactics to grind unwanted patients into the turf, then surf them out

> to

> other doctors, says attorney J. Provan, himself disabled from a

> bout

> with polio at age five.

>

> In a lawsuit and separate complaint to the U.S. Department of Justice,

> Provan's clients say they were left alone in exam rooms for more than an

> hour, forced to come to the office to pick up prescriptions that had been

> phoned in to their pharmacists before and made to wait inordinately long

> periods to get an appointment. The San clinic involved denies

> their

> claims, as well as those of a former doctor who's also a plaintiff in the

> case. The doctor alleges the medical group fired him because he attracted

>

> disabled patients, then refused to cut corners on their care. Which

> brings

> us to...

>

> 5. " If I treat you too aggressively, I could get kicked out of the HMO. "

> Those contracts doctors sign with HMOs expire every one or two years.

> Plus,

> many have clauses allowing the HMO to terminate them without cause. A

> doctor with many contracts doesn't have to worry about losing one. But in

>

> areas where one HMO is dominant, a physician can watch his practice -- and

>

> income -- shrivel if the HMO deselects him.

>

> 6. " HMOs have sophisticated computer programs that let them track exactly

>

> how much my patient care is costing them. And they let me know. " Many

> doctors receive monthly report cards from HMOs they do business with,

> pointing out how much care they ordered for each patient, or spent for

> hospital stays, tests and specialists. Those who rack up more than the

> average -- or more than some predetermined target -- may get a call from

> the

> HMO. Or maybe they'll get pinched by the methods described above.

>

> 7. " Ordering expensive treatments for you could tie me and my staff up on

> the phone for hours with your HMO to get approval. " Dr. Peeno used

> to

> be on the receiving end of such calls. Working as a medical reviewer for

> giant Humana, she admits she looked for reasons to reject coverage. After

>

> years of turning down treatments -- including a heart transplant for a

> Nevada man who later died -- she now works as head ethics consultant at

> the

> University of Louisville Hospital and as a paid consultant for

> Boies,

> a lawyer better known for representing the government in its antitrust

> suit

> against Microsoft, but who's fast gaining a reputation for suing HMOs as

> well.

>

> Dr. Peeno remembers the early days of HMOs when doctors " would rant and

> rave

> and call me names. They were much more strongly patient advocates than

> they

> are now, " she says. Docs " became slowly compliant out of fatigue and

> utility. "

>

> 8. " You might rate less of my time if you're with one of those

> penny-pinching HMOs. " Kenna Nevill, a 45-year-old Dallas woman, remembers

> asking her doctor to call her after office hours with a test result she

> was

> worried about, and being struck by his response. " He said, 'You know, I

> wouldn't do that for my HMO patients. But I'll do it for you.' " She had

> recently switched from an HMO to a PPO, or preferred provider

> organization.

> " I remember feeling like a second-class patient with an HMO. "

>

> How conscious is your doctor of the kind of medical coverage you have when

>

> he sits across from you? The Texas doctor who treated Dudley said each of

>

> his patients' charts had a large stamp on the front indicating HMO, PPO or

>

> old-fashioned indemnity-type coverage.

>

> 9. " The drug I prescribe may not be the best one for you -- but it's what

>

> your HMO will cover. " HMOs give doctors lists of the drugs they want used.

>

> And those lists can change in the middle of a patient's treatment, says

> Dr.

> Joe Cunningham, an internist in Waco, Texas.

>

> That can mean a drug that's working might be replaced by one that won't,

> at

> least until the HMO can be convinced the more expensive medication is

> necessary. While this may not pose much of a problem for most patients,

> for

> those with life-threatening conditions -- like seizures -- it's

> potentially

> fatal, says Dr. Cunningham.

>

> 10. " If you have to go to the hospital, I may turn your care over to a

> doctor who works directly for the HMO. " The use of doctors called

> hospitalists to manage patients once they're in the hospital began in the

> early '90s, says Dr. Peeno. These specialists have even more incentive to

>

> deny you admission or hustle you out. They're on the payroll of the HMO

> and, explains Peeno, " It doesn't take anybody with much sense to figure

> out

> where the incentives are there. "

>

> Of course, it's naive to think that health care has ever been free of

> financial considerations. Under the old fee-for-service system, doctors

> had

> an incentive to provide more -- perhaps harmful -- care, says Dr.

> M.

> Cutler, chief medical officer with the American Association of Health

> Plans,

> a trade organization representing managed-care plans. HMO incentives, he

> argues, are designed to " encourage physicians to think more critically

> about

> what it is that we do and to avoid waste -- not to limit care. "

>

> Adds Dr. Reardon, past president of the American Medical

> Association,

> " I think a doctor generally does what is right for the patient and if it

> hurts his income, he just absorbs that. "

>

> But Dr. Cunningham, who worked on a Texas task force that studied such

> incentives, isn't sure that is always the case. " You don't want to walk

> in

> as a patient to a physician who is thinking, 'You know, I've spent all my

> allocation for this month.' "

>

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