I had struggled for a week to carve out enough time to write this article. I was just sitting down to start a draft when my ex-wife called to tell me our seven-year-old daughter had gotten food poisoning. She had been vomiting uncontrollably for nearly eight hours. Fearing dehydration, I dropped my notes and headed out to take Meagan to the emergency room.
I pulled into the city’s best children’s hospital, one that I knew was approved by my PPO and to which our pediatrician had admitting privileges. It was 11:00pm on a Saturday night and the waiting room was overflowing, albeit with no apparent emergencies. Child-ren were watching videos and parents were outside smoking. I was told there would be a four-hour wait for non-emergency patients to see a doctor. Thankfully I had scanned through my PPO directory before leaving home, and thought of taking Meagan to a satellite clinic 20 miles away. I phoned and found there was no waiting. Ten dollars and 15mg of Vistaril later, Meagan stopped vomiting and wanted to go to bed.
Driving home I was suddenly struck with an awareness. I am one of the few, perhaps the only one, who knows managed care as an employer, provider, managed care executive and parent of a patient. From this unique perspective, I saw two conflicting paradigms driving the debate about managed care today. On the one hand is the patient-centered anti-managed care advocates that bemoan the loss of quality of care and the sanctity of the patient-doctor relationship. On the other is the financial-centered pundits who warn that without continued cost-cutting measures and relief from mandated benefits, health care premiums will rise, resulting in more employers dropping health insurance benefits, forcing more lives into the uninsured population. I’ve shaken both hands.
Over a three-year period while an employer of 85 people working at a rehabilitation facility, I saw our corporation shift from indemnity insurance to PPO, and finally to a choice between PPO and HMO. I endured many sessions of employees complaining bitterly about restricted choice of physicians and the hassles of obtaining authorization before seeking services. And I sat stunned through many open enrollment meetings where few meaningful questions were asked and nearly everyone signed up for the least expensive health care plan. These were the same nurses, therapists and rehab technicians who left every discharge meeting denigrating the managed care plan that would not approve additional inpatient days!
I chose to stay in the PPO with all the enhanced benefits. I knew my payroll deduction would be higher, but also knew I was paying only 25% of a nearly $600 a month premium much to the displeasure of the Human Resources VP who encouraged management to set the example by choosing the HMO.
Later, while a partner in a new medical practice, I saw more money gushing out of the checking account than trickling in during the first months after opening our doors. While we were stressed about cash flow and from working the long hours to win the confidence of referring physicians, we heard patient after patient say the darnedest things. “If I pay my deductible now, I won’t be able to go on vacation.” “I’m not going to pay that balance because my insurance company said your charges are higher than the ‘usual and customary.'” Or my personal favorite, “They say it’s not covered. Can you just call it something else?”
These patients were in good company. It took me only 90 days to realize that payors also say the darnedest things. “Oh, we didn’t see that you billed more than one unit on that code,” or “We never received that claim, you’ll have to resubmit it.” “We consider that modality as coincident to the other services and therefore not reimbursable as a separate service.” And the discounts requested got deeper and deeper.
Now, in my role as a managed care executive of a PPO, negotiating chiropractic benefits with managed care payors, I feel the constant pressure of the employers who want lower rates and threaten to self-insure or build their own network. I attend luncheons sponsored by purchasing coalitions who speak of lobbying against mental health parity. I receive notice that a state medicaid program has reduced its budget and expects me to renegotiate the capitation rate. And I endure HMOs and PPOs baiting me into a bidding war with another vendor, hoping to force a cheaper price, while assuring me that quality is paramount in their ultimate decision.
Plus tonight, as the parent of a patient, I bought peace of mind and a good night’s sleep for Meagan with just $10. Did I mention that I drove past a hospital that I knew wasn’t in my PPO?
I have no managed care horror stories. I have long rated myself as very happy with my insurance company, but have been more critical of my child’s providers. For example, take the time I took her to an out-of-network, but locally popular pediatric dermatologist to check out a curious blemish on her face. He took one quick look and said, “Telangiectasia. It will go away in time.” Then he proceeded to charge me $180 for a 99203 “detailed” visit. Can we say “super-upcoding?!” He thought I was mad about the price. Hardly. It was the fraud.
Back to those conflicting paradigms. Here’s the patient-centered hand, the one concerned about the loss of quality of care and the sanctity of the patient-doctor relationship. First, let us not confuse access with quality. Americans have long been accustomed to seeing any doctor, at any time, for any reason, and never taking pause to worry about the bill since someone else was paying all or most of the tab. The end user, consuming with abandon, has been shielded from the cost side, and has not been given incentive to live in such a manner as to curb consumption.
The patient is held blameless for unhealthy lifestyles that incur utilization, and for failure to comply with treatment recommendations or after-care. Fraudulent cost shifting (weekend sports injuries that become workers compensation claims) and a willingness to be an irresponsible debtor complicates matters further. Who is accusing who of not respecting the patient-doctor relationship?
Second, these patients concerned about quality fail to aspire to become more sophisticated consumers. The average patient asks fewer than four questions during a doctor visit, though trusting their life to a surgeon simply because a friend or relative recommended the doctor. Sophis-tication is on a distant horizon.
The real truism is that patients don’t want to pay for health care. A 1996 poll by the Kaiser Family Foundation and Harvard University found 47% of U.S. citizens unwilling to pay more in taxes or insurance premiums to guarantee universal coverage.
Remember my employees? For another example, take Delta Airlines. Three years after dropping its traditional health care benefits in favor of managed care products, Delta has again offered an indemnity product to its 73,000 eligible employees and retirees world wide. Only 119 people left managed care for traditional insurance. Why? The difference between a $10 copayment and 20% of billed charges translates to less discretionary dollars in the billfold. Patients have become so price sensitive that even small differences in out-of-pocket contributions can result in large numbers of patients changing health plans or staying put in health plans. An employee who demands unlimited excellent care at the lowest price is just as irresponsible as a provider whose greed has resulted in over-utilization or a payor denying care without a clinically sound basis.
Now, the other hand, the financially centered one. In the late 80’s and early 90’s when medical insurance premium costs soared as much as 18% per annum for five consecutive years, corporate America responded with a dictum: Cut costs or we’ll shop elsewhere. So entered managed care and 3% annual premium increases. The “all-you-can-eat” buffet attitude had lead to employer revolt, resulting in payors applying pressure on providers to curb costs, which lead to patients being forced onto health care diets. Today 150 million people are, in one form or another, in managed care.
Responding to harsh criticism, managed care is heeding the marketplace and abandoning restrictive forms of managed care in favor of models again allowing direct access to specialists. In an effort to increase enrollment, managed care plans are increasing their benefit packages in order to differentiate its products, but employers are still demanding cost containment. How can the enhanced benefits be added without raising premiums? Well, it can’t be done.
Recent patient-friendly initiatives (open access, any willing provider, etc.) are demonstrating the predicted consequence: premiums are increasing between 4% and 8%. In some markets, rates may increase as much as 12%, depending on the impact of new state mandates for minimum coverage under a managed care product.
As Congress and the states continue passing anti-managed care legislation, increased premiums will lead to greater numbers of small employers dropping health benefits, growing the ranks of the more than 41 million people without health insurance.
A study released in February by the AFL-CIO demonstrated a correlation between cost and coverage. After examining the data, the union found that as employers shifted more of the costs of health care benefits to employees, either through higher copayments and deductibles or greater premium cost sharing through payroll deductions, employees are more frequently opting out of insurance plans and joining the uninsured.
HMOs are simply not making double digit money anymore. In fact, some are losing money and all the rest are watching profits decline. Even Kaiser Permanente announced its first-ever loss, expecting to be between $30 million and $50 million in the red for 1997. There is no more fat. Increasing enrollment by lowering premium rates is not the marketing strategy of the future. In most metropolitan markets no single payor can afford to woo members by trying to undercut its competition on rates. Rates are going up and employers are bristling again.
How can the conflict be reconciled? Certainly not by putting the two hands in a room and allowing them to fight it out. Rather, turn the focus away from issues of quality and cost and toward patient responsibility. The patient must take up his/her fair share of the burden and challenge. Providers, payors and employers must dispel the vision of the patient as passive in the equation and bring pressure to bear on the party who can have the greatest impact on cost and has the most to gain in doing so. Prudent consumption, financial accountability and healthier living are perquisite to real resolution of the health care conundrum. It’s basic economics.
Patients must develop the discipline to not just think about getting the best care at the lowest price, but how to most effectively manage the limited health care resources. Without thoughtful attention to one’s health care needs, preventative and restorative, and the financial needs of the employer, the tension of incongruent paradigms is perpetuated.
