COLUMN ONE : Cutting Medical Costs--or Corners? : Joyce Ching’s death from cancer at 34 is about to put HMO payment practices on trial. Lawsuit claims system rewarded her doctors for skimping on tests; they deny wrongdoing.

The doctor was heading out of the examination room when Dave Ching blocked the door.

“I asked him to stop,” recalled the soft-spoken purchasing agent, “and I said: ‘I’m not leaving this room until . . . you prescribe some kind of a test--anything, any test.’ ”

It was October, 1992, nearly three months since Ching’s wife, Joyce, first had visited Dr. Elvin C. Gaines’ Simi Valley office seeking treatment for persistent abdominal and pelvic pain and rectal bleeding.

The pain was only getting worse, yet Gaines--her doctor through Metropolitan Life’s health maintenance organization--kept turning down the Chings’ requests that he refer her to a specialist.

But now, on her third visit, with Dave in his doorway, the physician ordered a $261 barium enema X-ray exam and, a few days later, sent her to a gastroenterologist.

The diagnosis was devastating. Joyce--a health-conscious mother of a 3-year-old son--had colon cancer. Twenty months and seven operations later, she was dead at age 34.

Her husband contends that it was greed that killed Joyce Ching.

In a malpractice suit scheduled for trial this summer, he alleges that the financial incentives in their contracts with the HMO prompted his wife’s doctors to place their interests ahead of hers.

As HMO membership soars nationwide--California has 12 million members--legal experts say the case is among the first to directly address the issue of HMO payment practices and their effects on the doctors who deliver care.

At issue: Are “gatekeeper” physicians in managed care systems withholding treatment because providing it takes money from their pockets? Are doctors’ judgments being colored by shifting financial incentives? Or do the hard realities of medicine today simply give distraught families new openings to second-guess doctors’ care?

Gaines and Dr. Daniel Engeberg, who also treated Ching and is a defendant in the Ventura County Superior Court lawsuit, deny any wrongdoing.

“These are caring people who care about their patients,” said Michael D. Gonzales, the physicians’ Los Angeles lawyer. The accusation that greed played a role in their decisions about Ching’s medical care, Gonzales said, is “an ugly allegation with no facts to support it.”

The doctors contend that they were doing what primary care physicians are paid to do in managed care settings: coordinate the patient’s care and provide whatever treatment is appropriate. They did not send Ching to a specialist or order extra tests sooner because--given her symptoms, age and medical history--they believed it was unlikely that she had cancer, according to Gonzales and court papers.

“Doctors aren’t perfect, and sometimes their best efforts prove wrong,” the attorney said.

The lawsuit alleges that the HMO industry’s preferred system for paying doctors--known as “capitation”--provided a strong incentive for Gaines and Engeberg “not to provide necessary medical care in order to further their own personal financial interests.”

Under capitation agreements, a doctor or hospital agrees to accept a fixed monthly fee per patient from an HMO, no matter how many or how few services that patient receives. The doctor gets paid the same for a healthy young patient who visits the office once a year for a sore throat as for a very sick patient who requires lots of care.

HMO critics worry that such financial arrangements are influencing even some ethically minded doctors to do less, not more, in medical situations where the course of treatment is not clear-cut. Lawyers anticipate a flood of lawsuits like Ching’s as HMO membership--already 50 million nationwide--continues to climb.

“We are entering a new era with respect to managed care and the responsibilities” of doctors and other providers, said Michael Zellers, a Los Angeles lawyer. “We’ve seen an increase in these types of cases, and we will continue to see them in California and across the country.”

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The Ching case comes amid a growing clamor about HMOs.

Proponents tout the plans as promoting preventive care while reining in runaway health care costs. Many employers have steered workers into HMOs by eliminating other types of health plans or requiring workers to pay a lot more to join non-HMO plans. The Chings chose MetLife’s HMO over less restrictive plans offered by Dave’s employer because it was a lot cheaper.

But many physicians, nurses and consumer advocates say some HMOs are putting profits before the needs of patients.

In Washington, House Speaker Newt Gingrich has called for a congressional investigation into the practices of the managed care industry. The Justice Department recently appointed a task force to look into possible abuses in managed care involving the denial of necessary services.

The suspicions reflected in those inquiries drive to the very heart of health care reform.

Many HMOs and other managed care plans are designed to hold down costs by discouraging unnecessary use of specialists and surgical procedures.

Besides designating gatekeeper physicians, they try to trim costs by negotiating discounts from medical groups, hospitals, laboratories and other providers in exchange for delivering big blocks of patients. In this respect, a managed care doctor’s business could be compared to the high volume car dealer who accepts a thinner profit on each car sold but makes up for it by selling more.

Roughly half of the nation’s 550 HMOs, including most in California, use capitated payment systems--arrangements that vary widely. Sometimes the per-patient payment collected by the primary care provider must cover only routine care; in other cases, primary care doctors or their medical groups must also pay out of their capitated fees for specialist referrals, laboratory tests and hospital stays.

(The nation’s biggest HMO, Kaiser Permanente, does not use financial incentives to limit specialty referrals; Kaiser employs full-time doctors and pays them straight salaries. Fountain Valley-based FHP International also has its own medical staff.)

The HMOs’ profits come from retaining a chunk of each patient’s premium dollar--typically 10% to 30%--for administering the plan and by shifting onto providers more of the financial risk involved in providing care.

Capitation provides a very different financial incentive from traditional fee-for-service medicine. In traditional insurance plans, doctors are paid for each service or test performed--a system that critics say encourages lavish spending.

Supporters say capitation encourages doctors to be cost-conscious and perform only those tests that are necessary. It discourages unnecessary and potentially harmful procedures, advocates say. And it promotes preventive medicine because it gives doctors a financial incentive to treat illness early, when care is less costly.

Critics of HMOs contend that the fees paid under some capitation contracts are so stingy that doctors are taking on heavy patient loads to meet their expenses and maintain their incomes. That leaves them less time to see each patient and may prompt some to overlook--or intentionally skip--certain procedures that are time-consuming or costly.

“Once you have that money in your pocket it’s very hard to shake that feeling of, ‘I better not do too much,’ ” said one Canoga Park dermatologist who did not want his name used. “People are very human, and they say, ‘I’ve got a family and bills to pay.’ As hard as one strives to be ethical, it’s too easy to get pushed over the brink.”

HMO officials say the industry cannot be held responsible for doctors whose judgments are corrupted by financial considerations. They say HMOs do a better job of monitoring physicians’ performance than do fee-for-service plans, where there is less oversight. And they point out that it is in the industry’s self-interest to weed out bad doctors, who can cost the plans money and customers.

“Our capitation arrangements are designed to cover the cost of medical care,” said Maureen O’Haren, legislative affairs director for the California Assn. of HMOs. “If a doctor is losing his or her ethical moorings to get extra profits, then certainly that is a perverse motivation.”

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Metropolitan Life paid Gaines’ group, Simi Valley Family Practice (now known as Family Health Care Medical Group), a monthly capitation payment of $27.94 for providing medical care to Joyce Ching, according to court papers. When Gaines or Engeberg referred a MetLife patient to a specialist, the group paid the bill.

The Chings knew next to nothing about Gaines’ reputation or that of his medical group when they selected him as their primary care doctor from a MetLife directory. In fact, the 60-year-old physician is among his community’s most respected. Gaines set up practice in Simi Valley after graduating from Loma Linda University Medical School in 1961. He and his partners built one of the area’s largest medical groups, landing contracts with many big HMOs.

Gaines is a “very congenial, well-liked, nice guy,” said Greg Stratton, mayor of Simi Valley. “He’s been a longtime supporter of the community.” Gaines’ lawyer describes him as a “deeply religious” man who has traveled on behalf of the local Seventh-day Adventist Church to treat the poor in Africa and Latin America.

Neither Gaines nor Engeberg has a history of medical malpractice claims. According to the Medical Board of California, neither has had a malpractice judgment over $30,000 against him since January, 1993, when the board began maintaining such records. A review of court records in Los Angeles and surrounding counties showed no other malpractice cases against either doctor.

Both Gaines and Engeberg declined to be interviewed.

Ching first brought her complaints to Gaines on Aug. 14, 1992. Her husband recalls feeling confident she was in good hands.

“I said to myself, ‘Here’s God,’ ” he recalled in a recent interview. “Whatever problem she has, the doctor will take care of it.”

The events of that visit are a crucial part of the lawsuit.

According to court papers, Gaines performed a pelvic examination and felt what a nurse described in the medical records as a “palpable mass.” The nurse also noted that Ching had complained of rectal bleeding, although Gaines says he was unaware of that complaint on the first visit.

Initially, Gaines determined that the mass probably was fibroid tumors of the uterus, a condition for which Ching once had surgery.

He ordered an ultrasound test--a procedure that cost the medical group $225 but which, according to an expert hired by Dave Ching, failed to adequately explain the pelvic mass that Gaines had felt or Ching’s complaints of rectal bleeding. Still, Gonzales, the doctors’ lawyer, says the fact the test was done shows that Gaines was not being stingy.

The lawsuit notes that the ultrasound cost the equivalent of nearly eight months of her $27.94 monthly capitation fee. After just one test the doctor had lost money on her--which, the lawsuit alleges, could have made him reluctant to order more tests.

Based on Ching’s symptoms, the suit contends, Gaines should have performed a rectal examination or a sigmoidoscopy, a test in which a flexible, lighted tube is used to inspect the rectum for signs of colo-rectal cancer.

The American Cancer Society estimates that colo-rectal cancer will strike 138,000 Americans this year and result in 55,000 deaths. If detected early, however, the disease is highly treatable with surgery and radiation; the five-year survival rate for early-stage disease is roughly 90%.

The cancer society lists rectal bleeding, blood in the stool and a change in bowel habits as the common symptoms of colon cancer. It says physicians can best detect colon cancer in patients with those symptoms by performing rectal examinations, stool blood tests or sigmoidoscopies. Barium enema X-rays also are recommended in some cases.

“Joyce had a very preventable cancer that, if diagnosed properly, she would be alive today,” said Mark Hiepler, the Oxnard lawyer representing Dave Ching, who now lives in Fremont.

Gonzales, though, says Ching was “vague” in discussing her symptoms with Gaines on that first visit--and that she stressed pelvic discomfort that might have been caused by several other less serious ailments.

“Colon cancer in a 35-year-old woman with no family history of it is rare,” the lawyer said. “If I have a headache right now,” he asked rhetorically, “does that mean if I went to a doctor he should take an MRI of my brain to make sure I don’t have a brain tumor?”

But Hiepler suggests another reason why more tests were not done. “The capitation system in which the doctors work doesn’t reward aggressive treatment, it rewards volume,” said the lawyer, who won a landmark jury verdict in 1993 against Health Net, California’s second-largest HMO, for denying an experimental bone marrow transplant to his sister, a breast cancer patient who died in April of that year.

The premium that the system puts on doctors’ time, he said, could explain why Gaines did not take Ching’s family medical history--which would have revealed that her father died of stomach cancer at 34.

Gonzales, however, said he will present expert testimony at trial that “there is no correlation” between a family member who had stomach cancer and a heightened risk of colo-rectal cancer.

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Despite the growth of HMOs, the debate over the quality of the care they provide involves a considerable amount of anecdote and bald assertion. There are no studies concluding, overall, that HMOs offer either better or worse care than traditional fee-for-service medicine; the transition to new forms of health care is a phenomenon still unfolding.

Dave Ching, certainly, does not have an open-and-shut case that his wife’s doctors put their interests ahead of hers, legal experts say. It won’t be easy for his lawyers to persuade a jury that doctors would intentionally withhold care to a seriously ill patient just to boost their income.

“I think few doctors would skimp on something when they thought there was a significant risk of cancer,” said Henry T. Greeley, a Stanford University law professor who specializes in health policy issues. “Without a smoking gun, trying to prove motive is awfully hard.”

Metropolitan Life is not a defendant in the Ching lawsuit, but like the doctors, it insists that its HMOs--which have about 65,000 members in California--do not compromise patients’ health.

In response to questions from The Times, MetraHealth, the company created through a recent merger of the health care operations of Metropolitan Life and Travelers Inc., said: “While efforts are made to control costs where appropriate, the timely delivery of safe and effective medical care to our members is our main priority.”

A key issue in the case will be whether Gaines or Engeberg could have done anything to prevent Ching’s death in the 11 weeks that passed from her first office visit in Simi Valley until her cancer was diagnosed Nov. 2, 1992. Was the cancer already so advanced that August that she would have died no matter what, or did the lack of treatment allow the cancer to advance to a deadlier stage?

Dave Ching believes his wife’s life could have been saved.

One weekend in late October, 1992, he says, she experienced excruciating pain--far worse than before. The lawsuit contends that it was during that period that the cancer perforated her bowel wall, metastasizing throughout her body. If a perforation did occur, the family’s expert witness will testify, Joyce Ching’s chances of survival were significantly reduced.

A year after his wife’s death, Dave Ching is haunted by questions: Was there anything he could have done differently? Should he have challenged Gaines earlier? Should he have taken her to a doctor outside the HMO network, regardless of the cost?

“There’s that kind of fear they put in you with an HMO that you can’t go anywhere unless your doctor tells you to,” he said. “He’s the law. He’s God. He tells you where to go, what to do and when to do it.

“I’ll never have an HMO again. But if I had no choice, I know how to handle them. I know how to work the system. I would be one of their worst patients.”