The less they treat, the richer they get

January 10, 1996|By Joan Beck

CHICAGO -- What's happening in health care isn't like a giant new Wal-Mart or Target coming to town and driving out Mom and Pop competitors with efficiency, huge selection and low prices. At Wal-Mart you can still choose what you want to buy and pay for.

In the fast-growing managed health-care plans you must pay (or be paid for) before you are allowed to enter and then you get only what the management types decide you need. The less they let you have, the more money they make.

Too much treatment

Millions of people are being herded into managed care -- pushed by employers and insurers who hope to save money, by government which is burdened with the steeply rising costs of Medicare and Medicaid and by theories that Americans have been getting too much unnecessary medical treatment.

But the savings may turn out to be illusory. Undertreating patients, sometimes with disastrous results, is inevitable. Medical decision-making is shifting from physicians to management. Patients will find it more difficult to trust their doctors, who may not be acting in their best interests.

What is now the best health care in the world is beginning to erode. And the money that's being wrung out of the health-care system won't be going to provide care for the poor or relief for taxpayers but as profits for investors and bonuses for administrators.

Individual patients will find it difficult to insist on the care they need and will be forced to turn, increasingly, to state legislatures and to Congress for new laws governing managed-care services. Political pressures to require that health-maintenance organizations pay for more than a single day of hospitalization after normal childbirth may be the start of a new pattern of political involvement in what used to be medical decisions made by doctors supposedly in their patients' best interest.

Physicians have been slow to act on the dangers to themselves and to their patients as they are pressured to sign up with HMOs or lose patients who are forced into managed care.

Some doctors are trying to compete by expanding physician-owned group practices. But most can't grow fast enough to command enough capital to compete long-term with managed-care corporations determined to dominate the market.

The New England Journal of Medicine last month carried two surveys of managed care and an editorial warning about the consequences of its rapid development. They're scary stuff.

Managed-care plans do differ in how they recruit doctors, pay them and monitor their work and in other respects.

Incentive bonuses

In the late 1980s, when enthusiasm for managed care was growing rapidly, most HMOs paid their physicians a straight salary.

Today, according to the Journal, more than half tie doctors' pay to bonuses, incentives and penalties designed to reduce care and increase corporate profitability.

The earlier plans based on salaries or fee-for-service pay did not ''sufficiently squeeze care or expand profits,'' comments the editorial by Steffie Woolhandler and David U. Himmelstein. That's why an increasing number of managed-care plans now ''tie doctors' incomes to curtailing service,'' they explain.

Physicians whose incomes are linked to reducing care put a smaller percentage of their patients in the hospital and give them less outpatient treatment than doctors who work on a salary, the editorial points out. Such systems ''pressure doctors to exploit patients' trust for financial gain,'' they say.

Norms ratchet down

There is also danger to physicians, says the editorial. Some doctors ''will boost their incomes by suppressing the use of services -- an ever more difficult proposition as norms ratchet down. Many more, if their practice styles (or their patients' illnesses) are too costly, will become unemployable in the midst of a glut of physicians that grows as utilization falls (and unmet needs mount).''

In the future, predicts the editorial, there will be ''fierce competition among doctors to avoid sick patients. Doctors who attract sick patients -- for example, experienced surgeons, minority-group physicians, medical school faculty members and those who care for the poor -- risk being ostracized from plans and even physician groups.

''The gulf between clinical excellence and professional success will widen.''

Drs. Woolhandler and Himmelstein quote their own HMO contract with U.S. Healthcare, which provides that physicians must not say anything or do anything that could undermine the confidence of patients, potential enrollees, employers, unions or the public in U.S. Healthcare or the quality of its coverage.

They must also keep all financial and utilization review procedures confidential.

Their editorial points out that U.S. Healthcare spends only 74.4 -- percent of its revenues from 2.4 million enrollees on medical care, that it has a $1.2 billion cash reserve, that it makes $1 million a day in profits and that its chief executive officer got $20 million in a single year and has $534 million in company stock.

''It is hard to be a good doctor,'' the editorial says. ''The ways we are paid often distort our clinical and moral judgment and seldom improve it. Extreme financial incentives invite extreme distortions. . . . But if we shun the sick or withhold information to benefit ourselves, we conspire in the demise of our profession.''

A footnote to the editorial says that on December 1, Dr. Himmelstein was notified that U.S. Healthcare terminated his contract without cause, effective February 26, 1996.


Joan Beck is a columnist for the Chicago Tribune.

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