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Read Making a Killing

home / healthcare / in the media

The San Diego Union-Tribune
Jul 12, 2001

by Jamie Court

HMOs' gestures won't solve patient care problems

Jamie Court is executive director of the Santa Monica-based Foundation for Taxpayer and Consumer Rights and co-author of "Making A Killing: HMOs and Threat To Your Health" (Common Courage Press, 1999).


Patients may feel better about their health maintenance organization after Blue Cross of California's announcement this week that doctors will receive bonuses based on patient satisfaction, but they are not likely to see any real difference in how well or quickly they heal when ill unless a federal patients' bill of rights is enacted.

The proclamation of self-correction is typical of the sleight of hand the HMO industry has used to derail reform efforts such the federal patient protection act to be heard on the floor of the House of Representatives next week. The 10 percent bonus plan does not change the fact that the HMO will continue primarily paying doctors more money to provide fewer services. Blue Cross will pay physician groups a bonus of up to 10 percent for the results of patient satisfaction surveys, preventive health measures and other indicators the physician groups say are associated with quality.

However, Blue Cross will continue to transfer financial risk for patient care to such physician groups through "capitation," where doctors receive a per-head, fixed rate to take care of all the patient's needs, regardless of how sick or well the patient is. The fewer services the physician provides, the more money the doctor and the doctor's group make.

This accounts for 100 percent of physician pay outside of the 10 percent bonus. Capitation payments can be as low as $10 per patient per month for a Southern California pediatrician who has to provide vaccinations for children that often total more than the allotment. At root, capitation makes physicians chose between their patients' medical interests in more diagnostic tests and their own financial interests, something a 10 percent bonus will not change.

The ultimate measure of quality is whether a physician has adequate dollars to pay for what he or she may deem necessary for a patient. Under the capitation system Blue Cross will continue, doctors argue there is not sufficient money.

The California Medical Association reported that eight of 10 physician groups are unable to meet four basic financial solvency indicators due to woefully inadequate capitation rates. If Blue Cross were really to put its money where its mouth is, it would agree to pay physician groups more for sick patients, so-called "risk-adjusted capitation."

At a press conference in San Francisco, Blue Cross officials said the company is not moving to such a system and also admitted that only capitated HMO physicians would be receiving the bonus, not doctors in preferred provider option plans who actually receive a discounted fee for every service. In other words, only those doctor groups that already have a great financial incentive to limit treatment for patients will receive a small bonus for patient satisfaction and other indicators deemed to reflect quality by the physician group.

Patient satisfaction surveys themselves are often based more on perception than substance. They typically reflect factors such as whether a doctor is congenial or remembers your name, not whether the physician is telling you everything you need to know.

Such surveys are part of a larger effort by the HMO industry to appear more customer-service oriented, but patients are more than customers. For one, I would much prefer to have a nerdish doctor who provides ready referrals in the interest of caution than a smiling physician who remembers my name and tells me not to worry, playing the odds that nothing is wrong.

The reality is that few patients in the HMO system are in need of intensive treatment at any given time, and most barely access the system. Blue Cross will survey this larger population of patients who have minimal contacts with the HMO system rather than focus on the chronically ill to determine patient satisfaction.

Surveys have consistently proven, however, that the well are satisfied with their HMO doctors, since they rarely use them. It's only the sick and chronically ill who have real complaints.

While some doctors may spend more time on preventive health indicators due to the bonus plan, the real measure of healthy quality is health outcomes, such as how well cardiac patients fare. That is primarily determined by how much money an HMO gives doctors to treat them from the premiums they receive.

Twenty-three cents of every premium dollar received by Blue Cross of California is spent on corporate overhead and profit rather than being directed to patient care. If Blue Cross really wanted to help patients, it would bring that overhead cost way down.

A patients' bill of rights would help to do that by holding HMOs liable for their denials of promised, medically necessary treatment. Few things compel an HMO to put more money toward patient care than the fear that it could lose money in a court room by not doing so.

Experience has shown that the legal obligation under the law to provide high quality health care is far more meaningful than voluntary industry programs that purport to do so.




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