Doctors and Patients Feel Squeeze From HMOs : Health: New managed-care approach has disillusioned some, but both givers and receivers of treatment try to find ways to adapt.

The letters arrived in mailboxes across Ventura, quietly heralding the latest wave of health care reform in Southern California.

Four popular family practice doctors had sold their practice to a health maintenance organization’s medical group, but they assured patients they were busy negotiating to hold on to all their current patients.

In Thousand Oaks, Bob Barber had the opposite problem. He was trying to hold on to his doctor, the one he credits with saving his life after a heart attack.

His insurance plan included his cardiologist on its list of doctors. But Barber said his insurer refused to give him an appointment with the specialist and tried to send him to a less expensive physician.

Even as health care reform stalls in Congress, changes are taking hold across Ventura County and California--driven by rising costs and by sheer dread of what could happen if the White House plan succeeds.

“The marketplace itself is reforming the system in California very rapidly,” said David Langness of the Hospital Council of Southern California. “Give us two to three years in California, and we’ll be where the Clinton health plan wanted us to be.”

To be sure, the marketplace reforms do nothing for the roughly 140,000 county residents without health insurance. Unlike Clinton’s universal coverage, the hurly-burly California market offers the uninsured no recourse.

But of those who do have insurance, 85% are now covered by some sort of managed care plan, which scrutinizes the level of care to keep down medical bills. That compares to 10% covered by such a plan a decade ago.

“It’s a revolution in the way health care is practiced in California,” Langness said.

Health maintenance organizations (HMOs), preferred providers organizations (PPOs), individual physician associations (IPAs)--an alphabet soup of health-care arrangements--have overtaken the old-fashioned doctor who ran his own practice.

Now the MDs haggle with the MBAs over how much money they receive for each patient and how much care they give them. The doctors who cling to their independence watch their patients’ charts flow from their file cabinets to other doctors’ offices. All physicians say they no longer make the money they once did.

Doctors are increasingly working in larger groups, forming business organizations capable of wielding more power in price negotiations with HMOs.

At the same time, the HMOs and insurance firms that once existed simply to pay the bills for health care are now hiring doctors to provide medical care. Increasingly, they are buying up doctors’ practices, such as the Ventura family practice group.

“It’s getting harder to remain an independent doctor,” said Edward J. Banman, 45, a Ventura physician who chose not to accept an HMO group’s offer to buy his family practice. “Private, solo, individual practice is shrinking in urban California, and there are no replacements, no troops coming up that want to do what I do.”

For the patients, health care reforms can mean limits on what doctors they see and when they see them. In extreme cases, health managers have been accused of denying needed tests and expensive treatment.

Oxnard attorney Mark Hiepler recently opened a new law firm to intervene in such cases. Hiepler decided to focus on this area of the law after he won an $89-million verdict against an HMO that denied a bone marrow transplant to his sister. She subsequently died of breast cancer.

A more common complaint is that of Bob Barber, who had to fight a physicians group, called an individual practice association or IPA, to continue seeing his cardiologist.

“Everyone flips through those directories looking to find their doctor,” Barber said. “It looks like you have a lot of choice, but in reality the IPAs are telling the primary care physicians to direct patients to only some specialists. They’re funneling the business.”

This is not what the Clinton Administration had in mind when it proposed a seamless health care system to care for all Americans, said Dr. Sam Edwards, medical director of Ventura County Medical Center.

“There’s nothing integrated about this,” Edwards said. “This is a whole bunch of independent people trying to get as much money as they can.

“You have to realize what’s going on here. These numbers are so big. This is a trillion-dollar industry. It’s totally marketplace-driven. They’re giving less care to the patients, and they’re giving less money to the doctors and the hospitals.”

Dr. Robert Dodge sees his decision to sell his practice to an HMO as a way to give more time and attention to patients.

On July 1, Dodge and his three partners ceased being the Brent Street Family Practice and became Foundation Health Medical Group.

They sold their thriving business to a group created by one of the state’s largest HMOs; the physicians then became salaried employees.

“To me, what we do best is we practice medicine,” said Dodge, 42, running his hand over his short reddish-blond hair. “If you talk to most physicians, that’s their expertise. We’re not businessmen.”

Increasingly, the family practitioner found himself dealing with lab certification agencies, workplace safety inspectors, employee relations and mounds of paperwork required by various insurance companies.

“You cannot believe the hassles and the forms,” he said. “It just takes you away from medicine.”

His status as a “primary care physician,” rather than a specialist, put him in demand. All managed care plans require patients to get approval from the general practitioner before surgery or specialized treatment.

Even so, Dodge found his income dropping as insurance companies offered him and his partners less and less reimbursement for their work.

That did not change the payments they had to make on their office space. The four physicians--Dodge, Robert Garrison, Fran Larsen and Geoffrey Loman--moved into the building across from Ventura’s Community Memorial Hospital two years ago.

All around them, primary care doctors were rushing to form even larger groups. Ventura’s largest medical group, Buenaventura Medical Clinic, was considering a merger with a statewide doctors group.

So when Foundation Health offered to buy Brent Street Family Practice this spring and take over the business side of medicine, the partners agreed.

The arrangement also made sense for Foundation Health Corp., the 530,000-member HMO that launched the new medical group that bought out the Ventura practice and is shopping for others, said spokesman Kurt Davis.

“We started the medical group because we found that primary care physicians were leaving private practices and joining other groups that are not necessarily aligned with us,” Davis said.

The Sacramento-based HMO won a contract a year ago to provide services for Ventura County government employees. Officials plan to build a doctors’ office near the county government center.

Dodge and his partners will remain in their Brent Street offices, but be available to patients through the HMO’s medical group.

“To the extent that we’ve got the best physicians in a community, we certainly hope that attracts more members,” Davis said.

Some believe that drawing new patients is the chief motivation behind these new HMO-sponsored medical groups.

Initially, health insurance and HMO plans were sold to individuals, with salesmen sitting at card tables in shopping malls or holding bridge parties at trailer parks. Then they moved on to employers, who could deliver the health care plan to large groups of workers.

Now, some are hiring the most popular doctors and hoping the patients will follow, Edwards said. The doctors receive a lump sum for their practice and then collect an annual salary.

“The doctor thinks it’s wonderful,” Edwards said. “Everyone does, except the poor old patient who gets the letter and has to go somewhere else.”

Dodge and his partners say they hope to keep all the patients in their practice, not just those affiliated with Foundation Health. Already, several insurance companies have signed contracts with the new medical group.

Aetna Health Plans, for instance, should have no problem with the arrangement, said Kurt Hoekendorf, a regional director. “We’re not threatened at this point,” he said. “If, for some reason, they start trying to take the employer groups from us, then we might step in.”

Blue Cross, however, does not plan to keep the doctors on contract. “They now belong to our competitors, and it wouldn’t make good business sense to use them,” said Ferial Bahremand, a California Care Health Plan’s vice president.

Blue Cross plans to hire doctors and set up its own clinic in Santa Barbara in 1995. “The rationale is to create a stable network of doctors for our clients,” Bahremand said. “We’ve had some unstable contractual arrangements.”

The insurance firms and HMOs may have another motive for switching from paying for health care to delivering it, said Langness, from the Hospital Council of Southern California.

The Clinton health care plan, as initially drafted, leaves no role for them.

“The middleman is going to be cut out of the process,” Langness said. “What insurance companies and HMOs are trying to do is link up with doctors and hospitals.”

Bob Barber never gave health care reform much thought until his heart attack in January.

He was taken to Los Robles Regional Medical Center, where Dr. Irving Loh was his attending physician. After keeping him in the intensive care unit for five days, Loh recommended a rehabilitation program, which he could do at Los Robles.

But Oak View Medical Group, his IPA, would only approve the physical therapy program if Barber did it at Westlake Comprehensive Cancer Center.

IPAs are loose affiliations of doctors who group together, often as a means of providing service as similar to traditional private practices as possible. Like all managed-care plans, they assign a primary care physician who then clears the way for patient visits to specialists.

Barber initially won his fight to do his rehabilitation at Los Robles, but soon after he received a letter from Oakview saying they were switching him to a new cardiologist.

“I had no intention of changing cardiologists,” Barber said. “This guy saved my life.” The battle continued until Barber switched to a different IPA.

Marie Kaiser, 63, of Thousand Oaks had a similar problem when she wanted to visit Dr. Loh.

When her husband chose a new HMO plan, she specifically sought Oakview’s IPA because it included the doctor who had helped her through 10 years of heart trouble.

But when it was time for her annual heart exam last October, she could not get approval to go to Loh. Without approval, the health care plan does not have to pay costs for the visit.

After months of calling the IPA, she was told in early March that she had an appointment for an echocardiogram--but with a different cardiologist.

“That really upset me,” Kaiser said. “My only reason for picking the group was that I wanted to see Dr. Loh.”

She too switched to another IPA, but does not understand what happened. “These doctors are in these groups, so why the heck can’t we have our own doctors back?” she asked.

Loh is ready with an answer. He said IPAs often negotiate with certain specialists to limit how much they charge and then steer patients their way.

Under the arrangement, a specialist agrees to a fixed monthly rate per patient that does not vary, whether the patient sees the doctor five times a month or not at all.

Although he said he signed on with the IPA, Loh said he never agreed to be limited to a fixed rate and thus his patients were directed to other physicians.

“These groups do it to save money,” he said. “It’s cheaper for them to send the patient to another cardiologist.”

Loh and three other doctors in the Los Robles cardiac unit who had contracts with Oakview recently demanded to be dropped from its list of specialists because of repeated complaints from their patients that they could not get in to see them.

Furthermore, Loh believes that IPAs wanted him on their lists because he is well-known and might attract new patients, which they could dispatch to other doctors.

“What they are doing is perfectly legal,” Loh said. “But in my estimation it’s not ethical.”

Administrators at Oakview refused to comment, though one employee, who would not give her name, gave several possible reasons for the confusion. “It could have been an error on the patient’s part,” she said. “An HMO directory could have been printed wrong. It could have been a book that was five years old.”

An official from another IPA said that specialists are flattering themselves if they think their names are enough to attract patients.

“You don’t use doctors’ names to get new patients,” said Harris Wasser, medical director of Briarwood Medical Group. “That’s almost comical. It’s more imagined than reality.”

The real problem, he said, is that specialists have seen their patient loads drop with the advent of managed care, and as a result, they are looking for scapegoats.

“Obviously, if you are a neurosurgeon and people have to jump through a hoop to come see you, you aren’t going to be happy,” Wasser said.

Indeed, some say that Ventura County has 25% to 50% more specialists than it needs. Managed care simply takes fewer doctors, according to American Medical Assn. statistics.

The old, traditional insurance program required 224 doctors to treat 100,000 people. Managed care takes only 120 doctors per 100,000, according to the AMA.

The specialists have already begun to feel the pinch, said Gosta Iwasiuk, a surgeon who heads the Ventura County Medical Society.

“There is a tremendous amount of pressure,” Iwasiuk said. “The HMOs are squeezing down the amount of money they’ll pay for each patient, for each procedure.

“The insurance company, the third party who pays the bill, has taken a very active part in making the decision about who is treated. The authority of doctors is being eroded,” Iwasiuk said.

“It drives me crazy.”