Physicians Divided Over Prospect of Managed Care

Dr. Daniel Ein, a Washington internist and allergist, typically sets aside two hours of office time to conduct annual physicals. He spends the first hour just talking to his patients, finding out what has been happening in their lives, looking for things that could bear on their health but that no laboratory test would detect.

With health care reform looming, Ein is girding for the worst: If he is forced to discount fees and accept lower reimbursements from insurance companies and Medicare, he says, “I can either close my office and go work somewhere else or change the way I practice.”

In his mind, that means “I’ll have to make up in volume what I lose in income. I can do what a lot of HMOs do--I can see patients every 5 or 10 minutes, even for the complicated problems. . . . But it’s not the way I want to practice medicine.”

Dr. Neil Schram, on the other hand, a primary care physician and nephrologist who works in Harbor City, Calif., for Kaiser Permanente--one of the oldest and largest health maintenance organizations in the nation--sees the future differently. He is already there--and he likes it.

Schram works within a closed system of health professionals, and says--because its doctors initially are carefully screened--he never feels that someone is looking over his shoulder, questioning his medical decisions. Also, he earns a straight salary, which he calls “competitive,” so his income is the same, regardless of how many patients he sees in a day.

Of his HMO, he says: “I think it works beautifully.”

As the Clinton Administration struggles with the various elements of its health reform package, the prospect of an accelerated national move toward some form of “managed care” or “managed competition” is driving a wedge deep into what has traditionally been one of the tightest, most unified groups in the country: the nation’s doctors.

To physicians like Schram, the future seems rich with the promise of professional satisfaction, economic well-being and abundant opportunities to bring high-quality medical care to all Americans.

For Ein and many others, current approaches to health care reform raise the specter of reduced incomes, increased patient loads and compromises in the quality of patient care that they fear will strike at the moral heart of their profession.

It is too early to tell which vision of the future will prove correct, if indeed either does. But it is already clear that the effort now getting under way to redesign America’s health care system is setting off shock waves that will leave almost no one untouched--including the time-honored world of doctors.

And while it would be easy to see the concerns of physicians such as Ein purely in terms of economic self-interest, that would miss issues that may affect patients as well as physicians.

“The biggest thing on the minds of doctors is the loss of their autonomy,” says Robert Blendon, professor of health policy at the Harvard University School of Public Health. “They feel incredibly hassled. They feel that their (professional) lives are more restrained. Even if they are doing fine economically, they feel the reasons they went into medicine--their independent judgment-making--is being constrained, and that it is going to get worse.”

The depth of doctors’ concerns and the cross-current within the profession were illuminated in a recent survey conducted by the Gordon S. Black Corp. for the American Society of Internal Medicine.

It showed that two-thirds of the nation’s internists were opposed to price controls and ceilings on health care expenditures, although they said they would be willing to accept such restrictions if the fees were fair and there was less intrusion into their medical decision-making.

The same poll found that a small majority (53%) would support managed competition, which typically refers to the grouping of consumers into large purchasing pools staffed by professionals with the expertise and market leverage to bargain with doctors, hospitals and other providers. Support increased to 63% when the internists were asked if they would favor managed competition if it meant no “global budgets” or price controls.

However, the survey also turned up an overwhelming lack of confidence that the government would stick to its end of such an agreement.

“There’s no denying that internists want fair pay, less red tape and greater autonomy in their practice,” said Dr. Alan R. Nelson, executive vice president of the society.

“But (we) have learned the hard way how Washington works. Policy-makers said Medicare payment reform would mean more appropriate pay for primary care services and less hassles, but the opposite has been true. Why would (we) believe that a system of global budgets and price controls would mean fair pay and less micro-management?”

Global budgets are a technique in which the government sets an annual target or cap for all of the nation’s health care expenditures. There could be a national limit, as well as state-by-state limits, and each state would then apportion spending among doctors, hospitals and other health care providers. It differs from price regulation, which normally regulates individual fees, not total expenditures.

Many physicians say the public perception of them as greedy is a bad rap, arguing that what they fear most is not loss of income but loss of freedom.

“I am comfortable, and if I never had anything more than I have now, I would be extremely happy,” Ein says. “I didn’t go into medicine to get rich. If I wanted to be rich, I’d have gone into my father’s import-export business. Comfortable, yes; rich, no.”

The salary gap between self-employed doctors and those in managed care programs is significant but not astronomical. The average self-employed non-federal physician earned about $185,600 after expenses in 1990, the American Medical Assn. reported last year. Recently, another study said that the average staff physician employed on a salary by a hospital, HMO or group practice in 1992 earned an average of $139,732.

Many health professionals actually believe--and will acknowledge--that managed care systems can work, and that most doctors will be able to live with them, if the plans are put together carefully and well.

But many see that as a big “if.” And some warn that the good experiences many doctors report with HMOs and managed care may have more to do with the selected patient populations they now treat than the realities of such systems extended across the whole range of the population--including the millions now too poor to have any health insurance.

“There will be real pressures on physicians on decision-making if it has economic consequences,” Blendon says.

“There are real dangers, but not all managed plans are a doctor’s worst nightmare,” medical ethicist Art Caplan says. “The toughest challenge of health reform will be to create plans that don’t put doctors in a moral double bind, meaning that they will have to choose between advocating zealously for their patients or saving money.”

One of the biggest risks, Caplan believes, is that physicians will find themselves “accountable to all manner of bureaucrats--people doing quality review or utilization review--who are not involved with patients but are only involved with telephones and fax machines. You, the doctor, see Ms. Smith in your office, you think she needs a test, and you spend the next 45 minutes trying to justify it to a bunch of people you would normally not give the time of day to in terms of discussing their views about clinical medicine.”

Many doctors have already begun to experience this. And, not surprisingly, they hate it.

Ein, for example, sits on a committee for a national allergy organization that fields grievances from allergists over claim denials. He finds it extremely frustrating and worries that the worst is yet to come.

“It’s not only intrusive, but it’s not always rational,” he says. “They will say a particular set of tests is experimental when it’s been in the textbooks for 20 years. These are ignorant people--not even physicians--who don’t understand allergy or immunology, presuming to tell me these tests are not appropriate. It’s crazy. I’m the one they should be consulting.”

Nevertheless, other physicians who participate in managed care programs insist they can succeed without shortchanging either physician or patient.

“I happen to think a well-run HMO will give you cost efficiency and accountability without compromising care. I believe that 100%,” says Dr. Mervin Shalowitz, a practicing internist in Skokie, Ill., who is also medical director of an HMO.

His is a private doctor’s practice of seven internists who perform fee-for-service medicine, but which, at the same time, has “consciously converted about 80% of our practice to managed care contracts,” Shalowitz says.

Moreover, he insists that their fees are uniform and “all our patients are treated exactly the same,” meaning their medical approach is not dependent on whether their patients are enrolled in a managed care plan or are covered by private insurance.

He believes strongly that a good managed care program avoids duplicative services, which raise health care costs, and that patients benefit because “doctors are aware of the whole medical picture of the patient.

“If you go from internist to orthopedist to gynecologist and nobody talks to each other, there’s no accountability,” he says. “An HMO provides an accountable system, and the public, as patients, have some place to call, to question or to complain, if necessary.”

Shalowitz feels it is appropriate for managed care plans to ask questions, and designate hospitals and specialists. “But they shouldn’t be in my office making treatment decisions,” he says.

Dr. Harvey Simon, an internist who practices at Massachusetts General Hospital, believes that “managed care is already a reality, and I suspect the coming reforms will simply make it more so.” He is resigned to what lies ahead and says he has no plans to make up for lower fees by adding patients or by using a different approach.

“My practice is quite busy and full, and I can’t imagine seeing any more patients. I don’t see any choice. I’m not going to compromise care. I’m not going to work more hours. I think my compensation will probably suffer from these changes, but most people expect this. Nobody likes it. But if it were part of overall cost containment, and the quality of my professional life is not compromised, it would be acceptable.”