ABLEnews Extra

                         Worst of All Worlds

     On August 27 through August 31, the Los Angeles Times reported
     on its seven-month investigation of California HMOs. Excerpts
     from the series of particular interest to persons concerned
     with the impact of managed care on patient care are provided
     below. (Ellipses have been omitted to facilitate reading.)

     [N.B. The entire series may be ordered by calling Times on
     Demand at 800-788-8804. The following file may be freq'd as
     MC50831.* from 1:275/14; and other BBSs that carry the
     ABLEFiles Distribution Network (AFDN) and ftp'd from
     ftp.icdi.wvu.edu on the Internet. Please allow a few days for
     processing.]

Here's what happened when Kaiser Foundation Health Plan and other
managed care companies started discharging mothers from the hospital
as early as eight hours after childbirth.

Legislators in Congress and at least three states, including
California, introduced bills to regulate how many days of hospital
care after delivery insurance companies had to cover. The American
College of Obstetricians and Gynecologists decried early discharge
programs as "uninformed" and called for a moratorium on such
changes.

At Kaiser, which began a voluntary eight-hour discharge program at
its Sunset Boulevard medical facility in April, officials
acknowledged that they had little or no clinical data on how the
early discharges affected such phenomena as maternal bonding,
breast-feeding rates, or patient satisfaction.

The result of this contretemps, many medical professionals complain,
was the worse of all possible worlds: lawmakers trying to legislate
medical practice because the medical insurers appeared to be
changing policy largely to save money.

But the episode also underscores much of what needs to be fixed in
the California HMO industry.

Pressure to minimize costs and increase earnings is growing faster
than clinical data showing how changes in policy affect patients.
The HMO industry's state regulatory agency, the Department of
Corporations, is regarded as so ineffectual that legislators slip
into the breach to micro-manage health care.

Meanwhile, patients face proliferating obstacles when they try to
exercise control over how they are cared for--by bringing official
complaints, appealing HMO denials of care, or suing in court.

In short, there is scant oversight of how HMOs handle their
self-proclaimed mandate to reduce medical costs for American society
as a whole.

"You don't want these kinds of decisions made by a company staring
at its bottom line," said Judith Bell, co-chairwoman of the San
Francisco office of Consumers Union.

Patient care advocates, consumer protection experts, and even some
HMO officials list these as critical elements of a program to bring
HMO decision-making out into the sunshine and level the playing
field between the health plans and their patients:

*Create an Ombudsman*

Bell proposes the creation of a state office of consumer advocacy
staffed by trained advocates representing consumers and reporting on
results.

Health care is "different from going out and buying another service
because there is a big imbalance in knowledge," she said. "The
patient really has to rely on doctors [because] consumers are not
used to having to advocate for themselves, as they have to in
managed care."

HMOs have long resisted such third-party review on grounds that
outsiders are likely to be tainted with the same "empowerment"
philosophy that leads to demands by patients for costly treatment.

"We don't have outsiders review claims unless and until it goes to
court," Kaiser Foundation Chairman David Lawrence said this summer
in an interview with The Times.

*Spread Information*
 
When the HMO's system's constraint on a patient's choice of
physician is compounded by constraints on information, the potential
for abuse is multiplied. Today, most California medical consumers
have access to virtually no useful data allowing them to choose
among the scores of health plans offering managed care services.

Health care professionals say HMOs should be forced to make their
policies on treatment coverage--especially coverage for esoteric or
"experimental" procedures--public and consistent.

HMO critics have long proposed that the state sponsor a standardized
survey of patient satisfaction rates among all HMOs. The HMOs argue
that statewide surveys will overlook subtle differences in practices
among health plans, unfairly skewing the results.

The plans and some employer groups, however, constantly conduct
their own surveys, widely advertising results that ostensibly
demonstrate high patient satisfaction. Professionals say such
informal surveys are untrustworthy for three reasons: Their
methodology cannot be confirmed; they are overly influenced by
subjective elements with no bearing on medical quality, such as
pleasant waiting rooms and amiable receptionists, and they are
easily manipulated.

Critics say HMOs dominate their relationship with doctors--and
therefore the doctor-patient relationship. Doctors fearful of losing
HMO contracts may not forcefully advocate on patients' behalf. Even
those inclined to be outspoken are often limited by "gag rules" in
their service contracts that prohibit them from publicly criticizing
the HMO.

Public interest groups say such provisions should be prohibited.
Moreover, they argue HMOs should be prevented from summarily
terminating doctors from their service rosters, a maneuver that
generates numerous complaints from patients who sometimes discover
in mid-treatment that visits to their preferred doctor will no
longer be covered.

*Limit Mandatory Arbitration*

Public interest representatives say arbitration can be an effective
way of settling disputes, but only if both sides enter the process
as equals. That does not happen when arbitration is a contractual
condition of signing with an HMO, as it is with the Kaiser
Foundation and some other plans. In those cases a member may not
even be aware of the arbitration requirements because the contract
may have been signed only by an employer or a labor union official.

Particularly troublesome are systems such as Kaiser's that are
managed by the HMO itself, rather than an independent firm.

A generation of neglectful leadership has reduced the Department of
Corporations' health care unit to one of the most poorly-financed
and little-known regulatory agencies.

Why the starvation diet?  One reason is that the agency is financed
directly by a per-member assessment on HMOs.  The HMO industry has
frequently lobbied to limit the agency's authority.

Many of the agency's problems, however, arise from poor management.
Department of Corporations' record-keeping is chaotic, say public
interest groups and some department staffers. The agency has long
sided with HMOs in their attempts to withhold information from the
public.

That approach backfired this month when PacifiCare sued the agency
to block it from obtaining patient complaints and other documents in
PacifiCare files.

"They've been taken by surprise," Bell said. "But some state
regulatory agency needs to have the mandate, resources, and desire
to protect 16 million Californians who get health care from managed
care plans."

[Pressure Is Mounting for Better Oversight of HMOs, Michael Hiltzik
and David Olmos, Los Angeles Times, August 31, 1995]

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