Doctors not charities before managed care Making profits the norm in most of medicine

December 28, 1997|By David Hyman and Vikram Khanna

Once upon a time, health care was high quality, affordable and widely available. Patients got conscientious care from well-trained, compassionate physicians. The major health institutions were nonprofit and did not exploit patients for money.

Then Managed Care arrived with a new arrangement: services to patients who paid for health "protection." Because most people were healthy, Managed Care did well and attracted many patients. When someone became ill, Managed Care usually avoided responsibility, or worse, squashed those who challenged it.

Doctors under the old system didn't know what hit them. Some cut deals with Managed Care. Others quit the profession. A few tried to make it on their own.

Then a small band of brave physicians and medical students rose up to tell the country folk that Managed Care had its own interests at heart. It didn't care whether the people lived or died. Eventually, the people drove Managed Care out, and everyone lived happily ever after.

Stories like this are usually called fables, but you wouldn't know it from the essay written by five medical students at Johns Hopkins Medical School that appeared recently in The Sun. The article decried the growth of profit-driven health care and marketplace medicine, and warned that doctors and nurses are "being prodded by threats and bribes to abdicate allegiance to patients and to shun the sickest."

The authors called for a statewide moratorium on the take-over of any Maryland not-for-profit health care institution by a for-profit company, and an "active and public dialogue so we can formulate an equitable and caring vision of health care." They also listed principles for defending health care, such as unrestricted access to the physician of one's choice, and eliminating financial incentives for overtreatment and undertreatment.

They offer few details about implementing these reforms, or their costs. Nor do they seem to understand why managed care arose in the first place: Because fee-for-service medicine could not deliver health care of consistent, measurable quality at affordable prices. The authors disdain profits.

But doctors did not operate as charities before managed care. As Uwe Reinhardt of Princeton University once observed, "What, in the history of the American medical profession, aside from that profession's own rhetoric, should lead a thoughtful person to expect from physicians a conduct significantly different from the conduct of other purveyors of goods and services?"

The evidence that nonprofit health care institutions are particularly virtuous, or offer services of higher quality is problematic at best.

The animosity these students have for making profits might be more understandable were it not the norm everywhere else in the economy, and in most of medical care.

Johns Hopkins is an excellent institution, but students at such schools tend not to become rural family physicians. Many will choose high-tech, high-cost, procedure-oriented specialties -- exactly the fields whose lack of accountability in cost and quality helped push us into the arms of the giant. These physicians will benefit greatly from the profit-driven development of new drugs and devices that daily increase the range of things they can do, even while compelling evidence for benefits and cost-effectiveness is slim, or slow to develop.

There are some reforms that would constitute true consumer protection. True reform involves better disclosure of information about providers and health plans, the uncoupling of insurance from employment, honest discussions of cost/quality trade-offs, and better alignment of incentives among plans, patients and physicians. These reforms would improve the health care that is available, without unduly enriching providers or insurers.

Those who want to turn the clock back to fee-for-service land should reread the article by RAND Corp. researchers criticizing the quality of American medical care, which appeared on the same page as the students' article. The health policy problems we grapple with today (no insurance, inconsistent quality, spiraling costs, and uncompensated medical harm of consumers), did not start with managed care. They have existed for decades, but were generally ignored in the pursuit of professional and institutional self-interest. Managed care is far from perfect. But its convenience as a target does not diminish the fact that it alone is not responsible for what was and is wrong with American health care.

We suggest these idealistic medical students have focused on the wrong "p." Rather than targeting "profits," they need to consider "performance."

Health care providers and insurers must document clearly the value of the services they provide, so consumers can make well-informed choices of plans and providers, rewarding the top performers and driving the laggards from the system. In a performance-driven, outcomes-based system, those who provide the best and most efficient care, and are willing to have their performance measured, critiqued and publicized, will be rewarded.

Those who offer only rhetorical flourishes and a wishful longing for days gone by are part of the problem, not the solution.

David Hyman, M.D., J.D. is associate professor of law at the University of Maryland School of Law. Vikram Khanna of State Health Policy Solutions L.L.C. in Columbia is the author of "Managed Care Made Easy: Survival in the HMO Era."

Pub Date: 12/28/97

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