P&S Journal: Winter 1997, Vol.17, No.1
Managed (or Mangled?) Care: Impressions and Experiences
By Sally McLain
Cartoon by Debra Solomon
A young mother in California dies because her HMO refuses to cover a life-saving procedure. A physician in New England loses his managed care contract after he refuses to abide by the organization's gag order. Such stories are seen nearly every day in the daily news, but somewhere between the headlines and the investigative reports lies the real nature of managed care.
"In a sense," says Barron Lerner'86, the Arnold P. Gold Assistant Professor of Medicine at P&S, "one big question is whether managed care is inherently unethical." The answer, he says, is probably no, but he explains that each managed care company operates in a different way. "The non-profits put their profits back into the organization while the profit-minded managed care organizations do otherwise." For many within health care, that sends up a red flag.
"As services get ratcheted down, health providers are squeezed to provide cheaper services while the CEOs of the managed care companies get higher salaries," says Dr. Lerner. "Is that cool? Business people say that's fine; health care people say it's not."
"In the past, doctors weren't doing a very good job of controlling costs," says Walter R. Buhl'71, a family practice physician in a group practice in Milwaukee, Ore. "They weren't cooperating, so industry took over." Dr. Buhl estimates that about 55 percent of his practice serves managed care patients. "Managed care is mildly to moderately annoying, but it's a fact of life. If we adapt to it and try to modify it, then it might work. We can't just say no."
Emilie Osborn'76, associate dean of students and curricular affairs and professor of family and community medicine at the University of California at San Francisco School of Medicine, says, "It's not all bad. Managed care makes us look at how we do things."
Doctors on Commission?
Arnold Relman'46, professor emeritus of medicine and of social medicine at Harvard Medical School and editor-in-chief emeritus of the New England Journal of Medicine, has written extensively on managed care. "An essential precondition for ethical behavior by physicians under circumstances of limited resources is that they have no direct personal financial interests in the clinical decisions they make," he says. "There must be no incentives to withhold services and no incentives to provide particular services."
Yet many managed care companies have incentives for doctors who keep costs down. "I do believe physicians should be expressing their concern about the ethical dilemmas of doing less," says Dr. David J. Rothman, the Bernard Schoenberg Professor of Social Medicine and director of the Center for the Study of Society and Medicine at P&S. "It's vital that physicians continue juxtaposing the Hippocratic oath of putting patients first against the shareholders putting profits first."
Some have found ways to balance the sworn oath with the challenge to cut costs. Dr. Buhl believes that being up front with patients makes the ethical dilemmas work themselves out. "In all relationships everyone balances conflicting duties. Where a physician finds himself in a terrible bind, he has some level of duty to notify the patient that he can't order what he'd like to."
Gail Grant'82, who also has MPH and MBA degrees from the University of California at Los Angeles, works as a senior research scientist for Value Health Sciences in Santa Monica, Calif., a health services research company that supplies consulting services, information, and disease management programs to managed care organizations, medical groups, health insurance companies, and providers. "Physicians can meet both these demands by focusing on quality and cost-effective care," she says. "By shifting the focus to improving quality, lower cost will follow, and 'best care' will be delivered."
But medicine can't help but be expensive, says Joseph Shipp'52, a UCSF-Fresno professor of medicine and medical director of the Central California Diabetes Center. "Medical care is costly. We're living longer, there's more we can do effectively, and people's expectations are greater," he says. "The view that you can make medical care uncostly is not possible." With managed care, which Dr. Shipp calls mangled care, the sworn oath is balanced with great difficulty. He says the ethical problem is absolute once a physician's take-home pay is influenced by the amount of care he gives.
The Financial Incentives Question
Before 1965, medicine was not an especially lucrative profession. That changed when President Lyndon Johnson signed the Medicare bill. "This is not the first time money has entered into the doctor-patient relationship," Dr. Rothman says. "To hear some doctors talk about managed care, you'd think medicine had been a priestly duty before. Medicare brings money into medicine in a new way, because it created customary fees. Ultimately, every financial incentive in the system was to do more, which brought physicians additional income." Dr. Rothman also points to the rise in technologically complicated procedures that detach the compensation of care from time spent with the patient to the procedure itself. "Once you detach time from intervention, you can make money." Managed care, for the first time, presents incentives to go the other way. "The public perceives physicians talking about managed care as a conflict of interest. Before, physicians were paid more to do more, now they're paid less to do less. The public is very suspicious of the medical community's complaints."
Dr. David J. Rothman
Yet there is a concern that patients may be at risk, too. "The tilt in managed care from do more to do less is scary," says Dr. Rothman. How do physicians handle that?
"I just order what is appropriate for the patient," says Robert Blabey'67, associate chief of surgery at Stamford Hospital in Stamford, Conn. "I don't think a physician should ever balance costs vs. what he thinks is right. So I tell patients to work with their corporate benefits people because they're the ones with the weight--they have the bargaining chip. My role is to do the best thing for my patients."
Doctors As Advocates
If a procedure is not covered by the patient's insurance, many physicians will still advise the patient to go forward with the procedure but also to work with the insurance company. That's Dr. Blabey's solution.
The physicians interviewed unanimously agree that their primary role is to work for the good of patients. Many voice concern that managed care interferes with that role. "The real danger I see in the doctor-patient relationship is the violation of the principle of informed consent," says Dr. Lerner. "If a doctor is not letting a patient know of something he needs to know, that should be an indication to the doctor that there's a problem."
That brings up another point--how much patients should know about their physicians' managed care contracts. Says Dr. Grant, "If managed care contracts contain information specifically restricting a physician from discussing certain diagnostic or therapeutic services with a patient, then that restriction should be communicated to patients, preferably in health plan documents before a patient selects a given health plan."
Dr. Relman adds: "Patients should always know what is in their physicians' managed care contracts and the law should protect that right. Laws should ensure that patients know everything about the organization and operations of the managed care companies that are responsible for providing their care."
Some physicians place responsibility in the hands of the patients. "It's a patient's responsibility too--they should know everything about their plans," says Dr. Blabey. "The only thing that will change the situation is the patients." James Mooney'65, a practicing urologist in California and a founding member of a 12-year-old individual practice association, says that when patients don't know about the restrictions mandated by the managed care companies, they think their physicians are the hurdle. "They're not marketed to with this information, so they think we're the 'mean ones'" when doctors have to enforce the rules.
Dr. Shipp, in his description of mangled care, says the professional relationship between patients and the physician team does not work in a managed care setting. "Patients and doctors are unhappy, especially in California. If the providers and patients are unhappy, that says something."
The newspaper exposés and anecdotal evidence of people getting burned by managed care don't necessarily mean the system itself is bad, says Dr. Lerner. "This needs to be evaluated by doing studies," he says. "Do patients in managed care do better or worse than in fee-for-service plans? The results show they do about the same." At the same time, however, he says most of the older studies of managed care were conducted at institutions such as Kaiser Permanente in California, which is essentially the non-profit forerunner to today's for-profit managed care programs. Most of the physicians interviewed admit that Kaiser is basically a good plan, but its non-profit status makes it different from the for-profit operations mushrooming through much of the nation. Dr. Lerner says more research of for-profit endeavors is needed.
"The ethical dilemmas are real, but instead of approaching with the intent to solve them," says Dr. Buhl, "we use them for a fight."
But, says Dr. Grant, valid criticisms of managed care have been exaggerated by those fearing its national spread. "Managed care is no panacea at this time, but so far it is this country's best strategy for addressing the clinical and financial pressures facing its health care delivery systems."
"Managed care came about because doctors overprescribed tests and drove up costs," says Dr. Lerner, a point that Dr. Buhl believes is a reality difficult for doctors to accept. "We can't afford all the things we want--it's too expensive. There need to be cost controls because society can't afford to pay for everything," says Dr. Buhl.
Managed care does have good points, says Dr. Grant, ranging from reduction in the rate of rise in health care costs, to the enhanced role of the primary physician, to increased accountability of all providers for outcomes of health care. "I believe that these points outweigh many of the concerns and criticisms now being lobbied against managed care."
Where Do We Go From Here?
"Some form of managed care will undoubtedly be necessary from now on to rationalize the use of medical resources and control costs," says Dr. Relman. "That's not the issue, as I see it. The real question is who will own and control the managed care organizations and in whose best interest will they function?"
Those with the longest experience with managed care say it is only a matter of time before the system's problems and dilemmas become the concerns of physicians nationwide. "I don't think it will take very long for the disaster in California to sweep the entire country," says Dr. Shipp. "Patients and physicians need to sit down to decide what should happen."
And what should happen? "The increasing prevalence of chronic disease alone mandates an integrated system of coordinated health care delivery," says Dr. Grant. "Such a system, in its most generic sense, is 'managed care.'"
Dr. Relman foresees a system organized on a local level by physicians. "I hope the country will soon become disenchanted with for-profit, investor-owned managed care and gradually move toward a better, more socially oriented, not-for-profit system. Funding will have to come from some sort of universal health tax arrangement and payment will probably be capitated." Although everyone will contribute to the funding of such a system based on ability to pay, he says, options will exist for people to go outside of the system if they want to pay more.
"Health care is better handled by physicians," says Dr. Osborn. "I hope health care providers will take back the programs. Health care programs are being replaced by lean and mean business operations. Health care should not be for profit--it should be a service like providing clean water and police."
"The thing that would make me happier is if physicians would speak a collective voice," says Dr. Rothman. "Collectively, professionally, they could take a united stand. Why didn't organized medicine collectively and passionately protest against HMOs that required new moms to be out of the hospital in one day? Where was the voice of medicine? Why did it take legislators to criticize that? Surely it should have been doctors."
Walter R. Buhl'71
And that is one common thread voiced in this debate: physicians must take action collectively. "In my most cynical view, I think doctors are going to continue to be inflexible and fractious," says Dr. Buhl. "People will look for ways to feather their own nests rather than look at social and economic issues. In my more optimistic view, there are plenty of us who are thoughtful enough to take from the old world and the new world and adapt. We are smart enough to make it work."
Robert Blabey'67, associate chief of surgery at Stamford Hospital in Stamford, Conn.
Walter R. Buhl'71, family practice physician in group practice in Milwaukee, Ore.
Gail Grant'82, senior research scientist for Value Health Sciences in Santa Monica, Calif.
Barron Lerner'86, the Arnold P. Gold Assistant Professor of Medicine in the Center for the Study of Society and Medicine at P&S and practicing physician in internal medicine
James Mooney'65, California urologist and founding member of a 12-year-old individual practice association
Emilie Osborn'76, associate dean of students and curricular affairs and professor of family and community medicine at the University of California at San Francisco
Arnold Relman'46, professor emeritus of medicine and of social medicine at Harvard Medical School and editor-in-chief emeritus of the New England Journal of Medicine
Dr. David J. Rothman, the Bernard Schoenberg Professor of Social Medicine, director of the Center for the Study of Society and Medicine at P&S, and professor of history at Columbia University
Joseph Shipp'52, University of California at San Francisco-Fresno professor of medicine and medical director of the Central California Diabetes Center
Individuals contacted for this discussion of managed care ethics were asked to consider the following issues:
* Can physicians balance the sworn oath to deliver the best care to patients while working under pressures to cut costs?
* Should patients be made aware of the content of their physicians' managed care contracts? How much should patients know about how their health care is managed?
* How do some managed care plans' gag orders, which demand that physicians keep certain information from their patients, affect the patient-physician relationship?
* For-profit managed care insurers say they are able to offer quality health care while employing cost-cutting strategies. At the same time, total compensation for managed care CEOs is reported to be 35 percent higher than leaders in businesses of similar size and performance.
* Are the ethical dilemmas discussed in the profession real, or are they being used by the medical community to justify ill feelings for managed care?
* Should medicine be regarded like any other business?
Sources: "Tomorrow's Hospital: A Look to the Twenty-First Century," a book by Eli Ginzberg, professor emeritus of economics and director of Columbia's Eisenhower Center for the Conservation of Human Resources; a special report in the New England Journal of Medicine (Aug. 1, 1996); and other documents