Exploring Remedies for an Ailing Health-Care System

As a primary care physician who operates an outpatient clinic, my every working day is spent facing the current financial and ethical issues that are whirling about in the current health-care maelstrom [“Special Report: Health-Care Financial Crisis,” March 28].

Such terms as “marketplace adjustment” and “industry shakedown” are cheap buzzwords used by industry apologists to trivialize the human cost as the health care of thousands, sometimes millions, of people is jeopardized.

A few decades ago, almost all health care was fee for service. In this “old-fashioned” system, you paid for what you got. This payment was made directly to the health-care providers. To make more money, the health-care providers provided more complex and expensive treatments and tests. True, prices were increasing, but medical technology was growing, fueled by this money. In this system, as well, the consumer at least expected to get something for their dollars.

Now, in the new, improved system of managed care, it is fee for denial of service. The money that is paid by the consumer to the HMO or other managed-care network ostensibly provides “total care.” But what type of care can this provide?

To begin with index termsand/or profit? than 10% of the total amount that is supposed to be used to provide for the medical needs of the patient.

Does that mean the remaining 90% is for specialists, hospital costs, medicines and other health-related costs? Not at all. While these expenses come out of this pool, a terrifyingly large amount goes to administrative costs, cash reserves and, whenever possible, profits for the plan. After all, these businesses are in it for the money.

So are we as doctors, at least to a point, but most physicians I know practice medicine to practice medicine, not just to make a buck.

As health care has become a commodity, the number of brokers, or middlemen, has increased. For example, the consumer will purchase coverage from one of the large companies such as Aetna or PacifiCare. This company, in turn, contracts out to a smaller entity like the ill-fated MedPartners or any such organization. Last in line is the actual health-care provider, the physicians or hospitals.

Each broker of necessity takes a percent for operating costs, while the only ones actually providing medical care are those at the bottom of the heap. In addition, since the health-care providers are at the bottom, they are subject to all the regulations and requirements of all the agencies above them. This has created a nightmare of paperwork for providers already beleaguered by diminished payments and rising workloads.

All of this does nothing, of course, for quality of care.

So what is the answer? No simple one, obviously, but there are some very common-sense measures that could be taken. To begin with, primary care needs to be more heavily funded. This is the point of service at which every patient must interact, whether for routine health care or for access to other providers.

This is the point at which most education regarding lifestyle modification, diet, exercise can be most effectively given, yet the health plans prefer to spend these funds on slick brochures sent to the patient. Since regulation seems to be the rule of the day, why not regulate the amount of money dedicated to primary care, or to total actual health care for that matter, and set a ceiling on the total amount that may be taken for administrative costs and and/or profit? Certainly, this would put the entire insurance industry up in arms, but it doesn’t take a genius to realize that someone has to protect the citizen/consumer from the corporate giants, since their only concern is the bottom line.

Dr. DAVID J. KEULEN

Stanton

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Delivery of quality health care in the United States has deteriorated because HMOs are virtually immune from suit if they deny health-care benefits to their subscribers. Yet columnist James Flanigan [“There Are Good Ideas Out There to Make this Work”] perpetuates the myth that giving patients the right to sue their HMOs--the right to hold HMOs accountable for their refusal to provide treatment--is bad for health care. As long as it is more profitable to deny or delay treatment, HMOs and their medical groups will have an incentive to refuse prompt and necessary health care.

The HMO’s largest profit, of course, is the premium payment for the subscriber who never needs treatment. As soon as the patient needs more than modest care, he has become unprofitable. Similarly, the physician who is paid a flat “capitation rate” loses money on any patient who actually needs care. Also, HMOs create incentive bonuses--extra payments to those physicians who order the fewest tests and X-rays--to discourage physicians from ordering those studies.

Raising the rates that HMOs pay to physicians does not fix this problem. As long as it is more profitable to refuse treatment or diagnostic studies than it is to provide them, HMOs and physicians will have a financial incentive to under-treat or neglect patients.

The only way to return balance to the system--to return power to the patient--is to provide the means to hold the HMO and physician accountable for their neglect or refusal to treat patients.

STEVEN B. STEVENS

Partner

Watkins & Stevens law firm

Los Angeles

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A business is operated for profit, and risk-taking for greater profit despite the threat of bankruptcy is acceptable. A profession is managed on the basis of performance of a service, with compensation for the service based on acceptable standards and without venturing into risky territory subject to possible great gain or loss.

It’s no wonder, then, to read of the ever-escalating woes of the businesses lumped together under the broad term “managed care” that covers ever-increasing numbers of people not only at risk for their health, but also at risk for being left out in the cold when their managed-care organization goes belly up.

The ripple effect is staggering, as such bankruptcies affect the financial stability not only of individual health-care providers, but also institutional providers such as hospitals.

What is insufficiently emphasized in the articles is that all managed-care organizations are not alike; some are nonprofit and a great number are for-profit. It has been primarily the for-profit organizations that have contributed to the current crisis.

There are chief executives in for-profit managed-care organizations who earn anywhere from $1 million to $30 million or more. These are dollars collected as health-care premiums, which go into the “deep pockets” of individuals and are not used for health care. When dollars collected as health-care premiums are used willy-nilly to subsidize mergers and acquisitions, those are dollars not used for health care but for the risky venture of potential profits that might end up as loss or bankruptcy.

SYLVAIN FRIBOURG

West Hills