Hmo providers
Reason Magazine - Staff
- Cost-Conscious Care
"Torture by HMO" is the title of a March 18 column by Bob Herbert in The New YorkTimes. Herbert tells the story of a North Carolina family with a baby suffering fromleukemia. Their health maintenance organization insisted that the child undergotreatment in another state, at great cost and inconvenience. Herbert condemns theHMO's "inflexible and thoroughly inhumane" policies, adding that "humanitarianconcerns are not what corporate care is about. In the competition with profits,patients must always lose."
This portrait of HMOs as soulless money-making machines has become increasinglypopular in recent years, as skyrocketing health care costs have driven a shift fromfee-for-service medicine to managed care. Critics such as Harvard Medical Schoolprofessor David Himmelstein contend that HMOs reward doctors for providing less care,trapping them in a conflict between their incomes and their patients' welfare, andimpose "gag clauses" that forbid them to discuss this conflict with patients. "Thebottom line is superseding the Hippocratic oath," write Jeff Cohen and Norman Solomonin their syndicated column. "Cost-cutting edicts from HMO managements put doctors in abox....Faced with directives to help maximize profits, many physicians are underconstant pressure to shift their allegiance from patients to company stockholders."
From my perspective as both a physician and a patient in the same HMO, these chargesdo not ring true. I do not doubt that HMOs, like any other business, sometimes servetheir customers poorly. But there is no reason to believe that managed caresystematically undermines patient welfare because of the imperative to cut costs. Tothe contrary, I have found that efficiency is perfectly compatible with compassionate,effective health care. (Since this article was written, I have myself become a cancerpatient. Thus far, my care has been unsurpassed. I have the option of being treatedoutside my HMO, but would not think of going anywhere else. I expect from my plan thesame level of care as a patient that I have provided as a physician.)
My plan delivers care at several neighborhood health centers. Each member chooses a"home" center and a primary care physician at that center. Surgical, pediatric,obstetrical, and mental health services, as well as radiology, laboratory, pharmacy,and physical therapy, are all provided under one roof. While our "staff model" HMOdoes not offer as extensive a choice of physicians as many "network" HMOs, ourarrangement does offer economies of scale and strict control of physician quality.Surveys consistently show that patients rate quality of care above greater choice ofproviders.
I am paid a straight salary and modest bonuses tied to both the plan's profitabilityand a patient satisfaction index. Frequent advisory audits help me and my patientssort out health care they need from health care they want. My goal is healthy,satisfied patients and a financially sound business. Every day, I put my professionalreputation on the line. So does my HMO. Our challenge is to cut costs without cuttingquality. Fortunately, there are many ways to do this.
Changing the venue of medical care from hospital to outpatient center, office, orhome is the most important factor driving health care costs down and quality up. Hospitalsare very expensive pieces of architecture. They are also complex places and thereforepotentially hazardous to your health. Despite rigorous safeguards, medication andtreatment errors can and do occur. As many as 15 percent of hospitalized patients gohome with a hospital-acquired infection, often caused by antibiotic-resistantorganisms. Furthermore, most patients do not wish to be in a hospital. In the lastthree years, my HMO has reduced hospital use by 25 percent.
Inguinal hernia repair is one of the most frequently performed operations. Just a fewyears ago, the cost of this operation included a preoperative night in the hospital,one to two hours in the operating room under general anesthesia, and up to fivepostoperative days in the hospital. The patient had to take four to six weeks offwork, and the recurrence rate was 10 percent. In 1996, at my HMO, this operationrequires 40 minutes of surgery in a free-standing, outpatient surgical center underlocal anesthesia using a $100 plastic-mesh plug. Patients have less discomfort, returnto unrestricted work in one week, and enjoy a recurrence rate of less than 1 per1,000. This approach to hernia repair has been technically feasible for several yearsbut was usually employed sporadically, at the discretion of the surgeon or thepatient. In the era of cost containment, it has rapidly become the standard in theprofession, regardless of reimbursement mode.
Thanks to the innovation of laparoscopic surgery, 80 percent of my patients who needtheir gallbladder removed can undergo the operation as outpatients and return to workin a week. The original inspiration for this procedure was the development ofminiature video cameras, and the early reports were dismissed as mere technicalwizardry. But as it became clear that laparoscopic gallbladder removal was not onlysafe but much less expensive than conventional surgery, surgeons quickly adopted theprocedure as the standard approach, and patients demanded it.
The challenge of providing better care at lower cost has spurred not only thedevelopment of new procedures but the resurrection of old ones. Pilonidal abscess, achronic and painful anorectal condition, used to be treated with radical surgery inthe hospital. Recovery was frequently prolonged and painful. I now treat this problemwith a 20-minute office procedure. Patients can return to work in two days, and therecurrence rate is less than 2 percent. This procedure was first described 15 yearsago but languished until managed care created the incentive to implement it on a widerscale.
Open-heart surgery is expensive. Traditionally, the payer is billed separately by thehospital, the surgeon, and the anesthesiologist. My HMO recently negotiated a contractin which we pay a flat fee per operation that is about half our previous cost. As forconcerns that surgeons might offer less surgery for less money, our studies show nochange in mortality or morbidity since this contract went into effect. Beyond thequestion of ethics, no reputable provider group would risk a lucrative contract with alarge HMO by delivering less than first-class care. Based on this experience, we areexploring package pricing for other high-cost procedures, such as organtransplantations.
Childhood asthma is a distressing and sometimes frightening problem for parents andchildren. Our studies showed that repeated visits to the emergency room were not onlyunnerving for families but accounted for a substantial portion of the cost of treatingasthma. Through an aggressive program of family education, we are teaching ourpatients how to handle most asthma attacks at home, even how to give adrenalineinjections. A nurse practitioner is available by telephone 24 hours a day to advisefamilies whether a visit to the hospital may be necessary. Emergency room visits aredown 40 percent in the last two years. So far, we have noted no adverse effects onpatient care, and the response from families has been almost entirely positive.
Treatment of minor lacerations used to involve a trip to the hospital emergency roomand frequently entailed a long wait. On nights and weekends our health centers are nowstaffed with specially trained physician assistants who repair 90 percent of all minorlacerations. In the first year this program has saved more than $100,000 in hospitalemergency room charges while taking care of our patients better and more quickly.
For many of our patients with chronic wounds, such as bedsores and diabetic ulcers,treatment has often involved lengthy stays in rehabilitation hospitals or prolonged,expensive home visits by nurses. Under our wound-care program, most patients withchronic wounds can be treated directly at our health centers under the supervision ofa physician. In most cases, patients and their families can be trained to do the dailywound care at home. In the first year, this program saved more than $70,000 in outsideutilization costs.
Patients needing hip replacement surgery are often elderly and suffering from othermedical problems. We now begin physical therapy evaluation in the patient's home priorto surgery. By knowing the level of family support and the location of stairs andbathrooms, we can much better prepare the patient for recuperation and rehabilitation.The new approach has cut the average hospital stay in half, eliminated the need forintermediate rehab hospital care in many cases, and accelerated recuperation.
For the past three years, my HMO has followed a policy of early discharge afterchildbirth. The childbirth program includes comprehensive prenatal education,post-partum home visits, and individual screening. A 16-year-old first-time motherwith no family support and no telephone at home is not sent home in 24 hours. But 70percent of women with uncomplicated vaginal deliveries are discharged in 24 to 36hours. And despite the recent brouhaha over "drive-thru" deliveries, a recent surveydocuments that 90 percent of our patients are satisfied with their care--the samepercentage as before the early discharge policy was adopted. There is no evidence thatthe health of mother or infant has been compromised. Most mothers and their babiesbelong at home with an attentive family, rather than in a potentially dangeroushospital.
Unnecessary diagnostic tests are probably the most familiar example of Americanmedicine's spendthrift ways. Our computers are now set up so that every time aphysician orders a laboratory test or X-ray procedure, a window on the screen d
