Flatlinining.

• Author: GLASSER, RONALD J.
• Position: Practices of managed care plans - Statistical Data Included

The coming collapse of managed care and the only way out

EVERYONE KNOWS THE HORROR STORIES of managed care: the denied treatment, the preauthorizations, refusals to allow sub-specialty care, etc. So there is little reason to mention the motorized wheel chairs denied for patients with spina bifida--"our evaluation team has determined that your patient can walk assisted with braces or walker the prescribed twenty meters in under the approved ninety seconds." Nor is there need to remind of the termination of skilled nursing care for adolescents with cystic fibrosis--"home nursing care will be discontinued at the end of the month due to the plan's determination that there has been stabilization of your patient's clinical course."

Even as I write this, my home state of Minnesota's largest HMO is refusing to approve a discharge order to transfer a quadriplegic 18-month-old gift to the city's most respected and accomplished rehabilitation medical center because it isn't on the HMO provider list. Try to justify that to your conscience or explain it to traumatized, desperate parents. But these are only the everyday skirmishes. As a pediatric nephrologist and rheumatologist in Minneapolis, I've been on the front line of these battles for 15 years, and I've experienced first-hand the insanity of managed care.

Under managed care, physicians have fared no better than the patients. Despite what the managed-care industry would like you to believe, there is no real competition out there, no real choice. In any urban population of less than a million people, one dominant health plan usually covers more than 50 percent of the areas enrollees. In the larger cities, there are usually only four plans that cover more than 70 percent of the residents. These big plans nm the show, shadow each others' prices, and do not easily tolerate criticism.

Steve Benson, a well-respected pediatrician for over 20 years worked in a clinic recently taken over by a health plan. After questioning the appropriateness of the plan's insistence on scheduling patients every 10 minutes, he was told that he was not a team player. But he continued to complain that ten minutes per patient was not enough time to perform an adequate exam, much less counsel young mothers. More pointedly, after he complained that such a draconian patient-care policy was detrimental to the family and demeaning to the doctor, the medical director took Benson aside and told him that he was disruptive. If he wanted to continue at the clinic, he would have to seek counseling with the plan's psychiatrist. When Dr. Benson refused, he was fired.

The plan was determined to make an example of the good doctor. The separation clause of his contract stated that if he left the clinic, he could not practice within two miles of the facility. The plan interpreted "facility" to mean anything owned by the health plan, including depots, warehouses, parking lots, machine shops, and administrative buildings. That meant virtually the whole metropolitan area and most of the rest of the state. Daunted by the prospect of endless lawsuits, Dr. Benson, at the age of 56, was forced to leave his practice as well as the state. There were no more complaints from the other physicians.

Cherry Pickers

The lunacy of managed care began with the passage of the 1973 HMO Act. Within a decade, that craziness had grown into a full-blown catastrophe. It is fair to say that, back in 1973, no one had a clear vision of exactly what these organizations were, how they were to be run, what precisely they were supposed to do, or how they were to become profitable and remain fiscally sound.

The original idea was simple enough: Health-care costs were rising for employers and some method had to be devised to control them. What better way than to put together a whole new health-care delivery structure that would focus on keeping people healthy and that would place each patient into a health care "network," based on sound medical and economic principles?

Not surprisingly, though, patients wanted to stay with their own doctors and were reluctant to sign up with a health plan that wouldn't let them go to hospitals not in the plan. The imposition of whole new structures and delivery systems would have their own unique costs and unexpected problems.

Still, the health-maintenance organizations had enormous built-in advantages that allowed them to quickly overcome patients' doubts while overwhelming both physician resistance and the skepticism of the business community. First of all, as the name implied, HMOs were never set up to care for the sick--a problem if you intend to be in the health-care business. In addition, HMOs only offered medical care through employers, which virtually guaranteed them a healthy population. The insurance industry calls this tactic "cherry picking"

Full-time employees are the perfect demographic for any health-care company. Eighteen-to-55-year-olds are universally the healthiest cohort in any society; but the real "cherry picking" lay in selling...