One of my partners, an ear nose and throat surgeon, resigned years ago from a particularly abusive HMO. He said, “never again,” as did all of the reputable ENT surgeons in the area, physicians whose practices were already busy without having to deal with this outfit.
Even though many of the HMOs are long dead and gone from Oklahoma, this particular HMO has lingered on, only to crawl back to this partner of mine, asking him to make them an offer. They had, very simply, lost every single ENT surgeon from their “panel,” even the ones who were not well thought of and who needed more business.
He made them an offer he knew they would refuse, a ridiculous amount, one that would make this pathetic organization his best source of payment. To his surprise, they accepted.
Having made this agreement allowed the HMO to advertise his presence on their “panel.” The availability of quality ENT coverage made their product easier to sell to reluctant employer groups, most of which are by now familiar with the HMO hunger games.
Things seemed to be going well for about three months when my partner noticed a sudden change. The HMO had made it impossible to schedule a patient for surgery. He had to make phone call after phone call. He had to endure extended phone consultations with remote nurse manager-gatekeepers to review the indications and justify the need for surgery. Paperwork was lost, and needed to be re-filed. He would be kept waiting on hold for 30 minutes while attempting to obtain pre-authorization for CT scans for patients needing sinus surgery. And more.
It dawned on my partner that what the “beneficiaries” of this HMO had as a benefit was not unlike what the beneficiaries of the Canadian system have and what people in this country will have under “ObamaCare:” a right to hope for care, or a right to a place in line. A health care card in your wallet may mean nothing. As has been said repeatedly, “coverage doesn’t mean care.” When will people understand?
The poor child with gigantic tonsils and adenoids, who could be spared much misery by a 20-minute operation, must continue to suffer sleep apnea and chronic ear infections. The parents, frustrated with this waiting game of insurance approval, are now very troubled to find out that my partner has resigned once again from this HMO. What will they do now?
If they follow the example of many patients who have been down this road, they will wind up at our facility, paying a fair price out of pocket for their child’s surgery, a price that is within their budget, and having their child’s surgery done immediately by the surgeon they have come to trust and respect. Afterward, they will wonder why they have “insurance” at all. They will wonder whether some “insurances” are really a black mark that actually prevents them from receiving care. Finally and angrily, they may conclude that this whole HMO idea must be good for someone—just not for the patients covered by “the plan.”
I think this case illustrates that while the central planners of HMOs or ACOs or government health care may boast that the payment rates they have arbitrarily concocted are sound and fair, they will always retain the powerful tool of rationing-access-by-bureaucracy, an incredibly cruel way to balance a budget or book a profit.
The solution of rejecting an HMO delivery system does not fix the biggest problems of today, cost, access, outcomes, and making sure the majority of the premium is going to medical services. Doctor Smith is correct in saying that the HMO could afford to pay appropriate fees for the services needed. It is not rocket science. An HMO survives, just as any business - if it delivers good services and the patients and doctors are happy with it, growth is the reward - or, the HMO does not really care about its enrollees, or the healthcare providers, because they skim enough profit off the top to play any game they want, and they usually end up just treading water. The HMO can be good - what determines that - is who is running it, and who is making the decisions on patient care and provider payments.
There are several models that show "collaboration works" in deciding treatment, focusing on good outcomes of the patients, and delivering maximum care for the health dollar people pay into the plan as premiums. These HMOs are majority doctor owned, or a collaboration process, as either Health Co-Ops, and or even joint-ventures with private capital, so long as the majority control over revenue distribution and all clinical decisions are physician based. They can be profitable enough to attract private investors to collaborate with well established medical practices, that are already a part of the community. This is not a pipe dream, several of these exist and have been running successfully for over five to fifteen years. Some Co-Ops, such as in Seattle, have over twenty-five years of experience. Some, are purely owned by physicians, and they operate the HMO within the staffing demands of their own practices - and contract successfully with hospitals in their area. They do not need 150,000 enrollees to be successful. I reviewed one that only has 10,000 enrollees (from within their own established base of patients), and it has done very well over the past seven years. When the model is physician controlled, the structure has enough flexibility to meet the cultural need of the patients, and the cultural need of the doctors.
The cry that a medical group (or network of doctors) to implement and operate their own HMO is far to risky - is pure bologna. Like any business, it is "know and structure", and there is plenty of help available from experts all around the country, to help any medical group get it done. A common theme in these successful doctor operated plans is the patient gives them a high score on satisfaction, the doctor/owners like the outcomes, and the individual earnings are also higher then what they would do in just a fee-for-service practice alone. (The HMO model can be integrated with a fee-for-service practice). The other negative lead thrown out to doctors from the Insurance Companies and large Hospital conglomerates is - "doctors just don't know enough about the insurance business to be setting up their own". NOT TRUE! Doctor's are as capable of hiring the right qualified people, consultants, attorneys and/or actuary's and accountants as the Insurance Companies.
The big difference - the medical group manages the whole premium and does not peel off 20% to 25% for an extra layer of administration, or outrageous commissions to buy back the patients they already have in their established practices. The typical HMO, Dr. Smith described, does not give a hoot about how the doctors feel about what they are getting paid - which leads to questions about the quality of service an enrollee/patient can expect. They make their money off the top and as long as they can keep the wheels moving, convincing everyone that they can offer cheap care (by squeezing down the doctor payments) - they will have an audience. Once a person signs up, they are in for a year. So if the chosen doctor gets dumped, or decides to resign after three months - what does the HMO care. However, I would bet even the HMO still left Oklahoma, increases its premiums every year. Insurance rates have gone up every year for the last fifteen years. When have you seen physician fees increase at the rate of those premium increases over the past fifteen years?
Judging by Dr. Smith's success in organizing the Surgery Center, and other activities he involved with - clearly demonstrates doctors are as capable as any business person in obtaining the knowledge to do whatever looks to be a compelling opportunity. HOORAH!
Keith, you are a pioneer and have started the Direct-Pay revolution. Once this method becomes commonplace, you will see open-market medicine at its finest with creative, entrepreneurial physicians delivering a much improved level of service to their patients for a much lower cost. Contracts = Captivity!