HMOs Good for Health Care

* It’s not often I read something written with the magnitude of misinformation as was set forth in a Feb. 4 letter from Irwin I. Rosenfeld, M.D., College of Medicine, UC Irvine. It appears Dr. Rosenfeld can’t decide who he’s more angry with: managed-care companies, insurance companies, CEOs, lawyers, plumbers or his inability to earn more money. As an HMO executive, I’d like to respond and attempt to set the record straight.

First, I’m curious to know the names of those health insurance companies that currently pay only 35% of their collected premiums for their members’ health care while pocketing 65% for administration and profits. I know of no organization that does that and for good reason--in this state, it wouldn’t be tolerated. The level of oversight for health plans in this state is second to none. For-profit health plans, for example, report their earnings every 90 days with quarterly reports. Shareholders and non-shareholders alike can get a very clear sense of where our dollars are going with respect to member care.

Also, state regulators are constantly monitoring the level of care we provide while examining member satisfaction surveys and clinical outcomes. And finally, like many businesses, we’re just a phone call away from our most important critics--our members (customers). All they have to do is call our member service departments.

Summing up, managed care is responsible for a number of positive changes in today’s health-care environment. According to recent research by KPMG Peat Marwick, we’ve lowered hospital costs by 11.2%, shortened hospital stays by 6.3% and improved mortality rates by 5.3% nationwide. Together with more than 22,000 California physicians, we are proudly providing the best medicine and management of today’s health-care dollars.

As someone who also uses the system for my own health needs and those of my family, I’m hopeful we can continue our success.

JON R. WAMPLER

President and CEO

PacifiCare of California