JAMES O. HILLMAN, Executive Director, Unified Medical Group Assn.
It’s the difference between a la carte and prix fixe . Add a measure of bureaucracy and put human health at stake, and you get the difficulty of converting from traditional medicine to health maintenance. Unified Medical Group Assn. helps existing groups of doctors convert some of their practice to health maintenance after they contract to see HMO patients. The association’s executive director, James O. Hillman, has begun to receive membership applications from across the country. He spoke with Times staff writer Anne Michaud.
This is one of the most competitive areas in the country for HMOs. How does that affect the patient?
We think it’s wonderful for the patient. When the smoke clears, the HMO that does the best job of providing service to the patient will be the one that’s the long-range success story.
Is there a down side to the competition?
Certainly, in the point-of-service product (which allows an HMO member to seek services outside of the HMO’s group of doctors, creating administrative problems for the HMO). Most of the HMOs go into it reluctantly, because it’s being driven by another HMO that’s doing it.
Do you think the competition will force some HMOs out of business?
We’re seeing that now with the merger of Lincoln National (Health Plan) and (Oakland-based) Take Care; with the merger of Health Plan of America and PacifiCare.
How have HMOs changed medicine?
For instance, if you were going to have elective surgery on your foot or your knee, the traditional thing you would do is check into the hospital on a Sunday night. Surgery was done on Monday morning, you’d have three days for recovery, then a physical therapist would come in, and you’d have three days of crutch training. That was all fine for everyone. The hospital liked it because they made more money (and) it was very convenient for the doctor.
The way it works now is you bring the patient in when he’s healthy and give him crutch training in the medical clinic. You hospitalize him on Monday morning. He spends three days in the hospital, and he can go home. Everybody except the hospital wins with that situation.
If HMOs have to make sure they care for a person within a certain amount of money, doesn’t that give a physician a dollar incentive to limit care?
No, what really happens is that if the physician limits care, it’s going to cost more. What we find is if he’s limiting the care, the patient gets worse, and the physician still has the responsibility for taking care of the patient.
So, it’s almost the opposite. The physician has a terrific incentive to provide the appropriate level of care, and he has no incentive to provide unnecessary care. (That incentive exists) when the only way you can make money is by delivering care.
HMOs are still a very controversial method of health care delivery. If it were going to give the best result every time, there wouldn’t be much argument, would there?
Well, we think it’s the best, and we’re now collaborating with American Group Practice Assn. on an outcome study. The association is doing outcome studies with 33 medical groups across the country. We’re just getting started on it.
How did your association get its start?
The federal government decided (in 1973) that HMOs might be a good thing, so it mandated that any employer with more than 100 employees must offer that option.
I was the administrator of Harriman-Jones Medical Clinic in Long Beach, and McDonnell Douglas was one of our largest customers, and we knew that they would be in the mandated group. So we met with Blue Cross of California for about a year to form an HMO, which we called HealthNet.
And you’ve evolved into a trade association?
Yes. Today, we have 54 medical groups in four states, the bulk of them being in Southern California. These medical groups represent well over 2 million prepaid health care enrollees; it’s almost 1.4 million in Southern California. And we represent about 1,900 physicians here.
What do you do?
The medical group goes to the HMO to get a contract, then they come to us to help them administer the contract.
What kind of services do you provide that they need?
Primarily educational, teaching them how to effectively practice prepaid health care.
What’s unique about our organization is we can take medical groups that are already in business and convert them to a different way of delivering the care. Kaiser (Permanente Health Care Program), for example, is tremendously successful, and the only thing that’s holding it back is the capital expenditure it takes to build their hospitals and other facilities and hire physicians.
Do you think Kaiser will change?
I don’t think Kaiser has any need to change. They’re very, very successful. Right now, they’re taking the (doctors) they want (as they graduate from) training. I don’t want to do a commercial for Kaiser, they’re not a member. They’re our competition.
Your members serve six to 10 different HMOs. Why would a medical group want to work with more than one?
They don’t want to be beholden to any one. It’s the company store philosophy. If they’re dealing with only one HMO, and that HMO starts to do things that the medical group is not happy with, they’d be locked in.
A perfect example is a lot of our medical groups had contracts with MaxiCare, which went bankrupt a few years ago. So they were able to survive that because they had (multiple) contracts to replace that.
On a doctor’s move from traditional to managed health care. . . .
“It’s not an easy transition (to HMOs). Physicians don’t want to give up making all the decisions.”
On presidential support for managed care. . . .
“Moving toward HMOs is going to be a major part of the Bush program.”
On traditional medicine. . . .
“The only way (doctors) could make money was by delivering care. So a lot of unnecessary care was delivered.”
On the need to limit health care costs. . . .
“Health care was 12.8% of the GNP last year. It is critical that we get some containment on it.”
On the success of Kaiser Permanente. . . .
“The one group that they couldn’t throw out at Security Pacific (during a recent consolidation of health plans) was Kaiser. Those employees . . . would have been very unhappy.”
