HMOs Healthcare Of The Beast Essay, Research Paper

HMOs: The Health Care of the BeastMany people are concerned about rising health care costs. In reaction to this, some individuals and companies are gravitating

toward the assumed lower prices of Health Maintenance Organization (HMO) health plans. HMOs spend billions of dollars

each year advertising their low cost services. While these savings look good on paper, there are many pages of small print. The

explanation after the asterisk indicates that not only do the HMOs lack lower costs, but they also short-change the patient in

quality care. Much of the money spent on premiums goes directly into the pockets of stockholders and less is then available for

patient care. In addition, the main clinical decisions are made not by doctors, but by a board of directors more interested in the

bottom line than in little Jennie’s cough. When the facts are considered, HMOs should not be permitted to assume the role of

the primary medical care-givers.Traditional insurance companies and HMOs have comparable premium rates. HMOs are too profit oriented and, because of

this, their patient care lacks in quality. One way that HMOs cut their costs is to spend less on direct care. As opposed to

fee-for-service (FFS) companies, patients relying on their HMO spend 17 percent less time in the hospital regardless of the

degree of their illness. This said, patients in Medicare HMOs also spend about 17 percent less time than they would in a

traditional setting. It is surprising that, in spite of this fact, Medicare patient risk contracts actually cost Medicare 6 percent

more than they would have if done in a fee-for-service setting. (Rice, 79-80) The lack of savings is not limited to Medicare

recipients. Spending on health care in California, which has one of the highest concentrations of HMOs of any state in America,

is about 19 percent higher than the national average. There has only been one year since HMOs became so prevalent, 1994, in

which employers nationwide saw a drop in their health insurance costs — and it was an almost imperceptible 1 percent. These

companies’ earnings continue to skyrocket, and the HMO executives are always on the lookout for ways to increase profits by

reducing care to their members. It is troubling that while cost remains nearly the same, the deficiency in quality service continues

to increase.Most of the money generated by FFS insurance goes directly to patient care and physicians’ salaries. In recent years, the idea

of physician owned clinics has gained new ground in the industry. A group of doctors band together to create their own private

corporation. These businesses, being privately owned, have the luxury of not having to deal with the fiscal demands of

stockholders and other investors. Thus, the doctors have the ability to use the generated funds to care for their patients. Yet

with volume purchasing of gauze, needles, and other medicating implements, they are able to compete favorably with the

HMOs.Part of the monies generated by HMOs is used to pay stockholder dividends; the demands of the investors must be met. In

1994 salaries and stock awards to the heads of the seven largest HMOs averaged $7 million each. Shareholder-owned

companies saw earnings increase by as much as 20 percent each quarter (”News”). Because of this, the corporation rather than

the physician becomes the patient care decision maker. In other words, the medical decision making process is subject to

approval by a board of directors. In some cases these individuals go to great lengths to save money. For instance, some HMO

doctors are forced to sign a “gag order,” which forbids them to advise their patients about expensive medical care which their

HMO does not want to pay for. Doctors may actually be penalized by their HMOs because, in violation of a gag order, they

discussed with their patients the option for a procedure the HMO did not want to pay for. Equally maddening is that HMOs

sometimes give their doctors financial bonuses for not ordering tests or referring their patients to specialists. Some HMOs pay

doctors according to a “withhold” system, in which some of the money the doctors are owed is held back and paid only at the

end of the year, and only if the doctors have not ordered too many tests or referred too many patients to specialists (”Did You

Know”).HMOs are not the only answers to cost control. Most physicians practicing in the United States consider their profession to be

very much a form of art (Kleinke). The definition of art infers that within its sphere there are many variations and preferences.

After all, one should not ask Picasso to carve like Michelangelo. Physicians too differ in their methods of treating patients.

However when needless tests and procedures are done the treatment will cost more. This is waste. Many suggest that cutting

waste will lead to a cut in quality. This is not necessarily true. Consider the following: an otherwise healthy forty-year-old male

comes to a clinic complaining of a sore throat. This is a good nonspecific symptom, so naturally some tests are done. Some

blood is drawn, a culture taken, and an electrocardiogram performed. An EKG in this case is not medically necessary, but

many physicians still do not hesitate to order one. By eliminating useless procedures, lower cost can be maintained. To

determine which procedures are useless, scientists would need to perform ongoing studies of patients that fall under their

investigative categories. For instance, every year about 80,00 Americans get a carotid endarterectomy, a kind of Roto-Rooter

job on the clogged neck arteries. Typically costing $9,000, counting the bill for the hospital stay, the operation is designed to

prevent strokes. Another triumph of modern medicine? Or an overly risky, overdone alternative to cheaper drug therapy?

Incredibly, no one knows for sure, and no one is tracking the patients on a systematic basis to find out (Marmor 90).Eliminating waste from the health care system is imperative. However it is not good to make “expensive” synonymous with

“medically unnecessary.” In this struggle to contain cost, four areas of waste have been identified: ineffective or harmful, of

uncertain effectiveness, ethically troubling, and allocationally ineffective (Marmor 89). No one disagrees that harmful care

should be done away with, and almost everyone would like to see more cost effective care. It is when the argument reaches the

categories of “uncertain effectiveness” and “ethically troubling” that things get interesting. Most physicians are likely to resent an

intrusion upon their clinical judgement, patients would be unlikely to accept denial of a procedure they think to be beneficial,

and the world can never seem to agree on what is morally correct. “While many physicians will refrain from performing

procedures known to be ineffective, most will not be willing to unilaterally cut [sic] other ‘wasteful’ activities” (Marmor 106).HMOs are overly concerned with profit margins. The physicians employed by them work under a system of capitation through

which a physician receives a certain amount of money per patient no matter the frequency of office visits. Dr. Ronet Lev, an

emergency physician at UC San Francisco Hospital, states: “When I was in medical school, which wasn’t that long ago, you

would do the best for the patients. Now, with the capitated system, the pendulum has swung the other way and instead, you do

the least” (Uche). In order to increase profits, the doctors employed by HMOs are continually having to take on cases they are

not wholly prepared to deal with. Practices such as psychiatric evaluations and even minor surgery are now found within the

realm of the primary care physician. Some HMOs give doctors monetary benefits and financial incentives to reduce the number

of patient referrals to specialists and to ensure the care given comes at the least expense. “These financial incentives create what

many doctors see as an ethical conflict: the less care they give patients, the more money they make” (Uche). Some HMOs are

actually using a new technique called “telemedicine.” In these programs, sick patients are encouraged to call a phone service

through which nurse practitioners, rather than doctors, receive the individuals’ complaints and make diagnoses and prescribe

treatments without physical examination. The drawbacks of this practice should be obvious — but the bottom line is that it is

cheaper to pay a nurse practitioner to prescribe on the telephone, rather than to pay a doctor to examine the patient (”Did You

Know”).With the lure of alleged inexpensive care, many poorer families and individuals are drawn to the HMOs. The elderly are being

especially hard hit. The federal government sees the HMOs as a way to cut back on medicare spending. Thus, medicare and

medicaid subscribers are forced into substandard care. A study done by a group of individuals and published in the Journal of

the American Medical Association concludes that the subgroups of poverty stricken families and the elderly are affected most

by the HMO healthcare practices. One of the results was that for elderly patients (those aged 65 years and older) treated under

Medicare, declines in physical health were more common in HMOs than in FFS (fee-for-service) plans (54 percent vs 28

percent; P

“Did You Know . . . ?: Some Disturbing Facts About HMOs.” http://www.hmoabuse.com/hmo/didyou.htmKleinke, J.D. “The Industrialization of Health Care” JAMA 17 Nov. 1997 (278):1456- 1457.

http://www.ama-assn.org/sci-pubs/journals/archive/jama/vol_278/no/17/pu145601.htm (12 Apr. 1998).”The List of Cases Continues to Grow.” http://his.com/~pico/1-25.htmMarmor, Theodore R. Understanding Health Care Reform. New Haven: Yale UP, 1994.”News About the HMO Crisis.” http://www.hmoabuse.com/hmo/news.htmRetchin, Sheldon M., Dolores Gurnick Clement, and Randall S. Brown. “Care of Patients Hospitalized with Strokes Under the

Medicare Risk Program.” HMOs and the Elderly. Ed. Harold S. Luft. Ann Arbor: Health Admin. P., 1994. 167-194.Rice, Thomas. “Responses and Discussion.” HMOs and the Elderly. Ed. Harold S. Luft. Ann Arbor: Health Admin. P, 1994.

79-83.Uche, Ijeoma. “Advent of Managed Care Raises Criticism-Praise.” UC San Francisco.Ware, John E., et al. “Differences in 4-Year Health Outcomes for Elderly and Poor, Chronically Ill Patients Treated in HMO

and Fee-for-Service Systems.” JAMA Abstracts 2 October, 1996 (276): 1039-1047.

http://www.ama-assn.org/sci-pubs/journals/archive/jama/vol_276/no_13/oc5b28.htm (12 April, 1998).