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Click here to see our participants' responses to your questions about about health care concerns and possible futures.
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For all the talk of health care reform heard during President Clinton's first term, in practice, Health Maintenance Organizations (HMOs), for-profit hospital corporations, and large insurance companies have been the real agents of change in the past five years. HMO plans represent health care coverage for entire corporations, and increasingly ambitious organizations such as Columbia HCA, U.S. Healthcare and Cigna have bought a larger stake in the health care process by investing in private hospitals. The trend is leading to what some call "The Wal Mart-ization of Health Care."
With each piece of the medical care puzzle that they own, large HMOs and for-profit hospitals find their leverage increasing. They can dictate the method by which doctors are paid. They can control prescription plans and treatments doctors are permitted to offer in a particular plan. This, in itself, might not be so bad, many argue. American health care is very expensive, millions go uninsured, and the old standard bearers, such as Blue Cross, are rife with lawsuits alleging fraud and mismanagement. But news programs such as 60 Minutes have raised questions about the business practices large plans have been employing in acquiring the Health Care empires whose controlled billing plans have increased in exposure to fifty percent of doctors in the Northeastern United States, according to a recent New York Times article.
Opponents of the trend - among them doctor groups, consumer advocates, and lobbyists for the elderly, argue that all aspects of the health care process concentrated in too few hands leads to poorer quality care, resentful doctors, and a potential disintegration of what has been, if not the cheapest, widely regarded as by far the best health care quality available in the world.
HMO proponents see costs coming down, and a wider potential for universal coverage once billing is made more uniform. The argument is also made that competition in the heath care business, no longer dominated by such plans as Blue Cross-Blue Shield and often financially-troubled non-profit hospitals, can only be good for the consumer.
But lawyers who have been battling what some consider to be monopolistic practices at rapidly expanding HMOs say that competition is of little value when a few - or just one - mega plan dominates available health care services in a region. In essence, the argument is made that in this era of smaller government, health care is too important to be judged by the standards other industries face; it should be regulated. One scenario some see forming on the horizon is one where doctors, facing fixed fees and low job satisfaction, will avoid costly patients such as those suffering from cancer or AIDS. Some doctors say they are already discouraged from recommending expensive procedures.
One thing's for sure: the face of health care is changing in the United States. The question is: Which direction is it headed?
Our guests represent different views on the health care trend. We have Cheryl Matheis, Legislative Representative for Health Care for the American Association of Retired Persons (AARP), and Dr. Donald Fisher, Chief Executive Officer of the American Medical Group Association, a coalition of doctors who work with HMOs.
Below are our participants' answers to your questions.
Additional Comments
- Are patients the best judge of health care?
- What changes are forthcoming with Medicare?
- Will alternative health care treatments face friendlier times in the future?
- Will people with permanent conditions be able to get health care?
- Why do HMOs and large health services corporations find it necessary to keep merging?
- How will medical savings accounts impact the continuing evolution of profits in various segments of the health care markets?
- Are Americans' health care aspirations unrealistic?
A question from Frank Opelka, MD, of New Orleans, LA
Can patients really assess quality? They are the true consumer/customer. But as a doctor, it seems their emphasis often lies on parking, quality food, comfortable pillows and beds. Outcomes are difficult to measure with the high variability in patient case mix.
Cheryl Matheis of the AARP responds
Patients have the potential to assess quality if they have information on quality. Right now, patients are generally able to evaluate only the "service" aspects of quality--whether they are able to get an appointment; whether their doctor listens to their problems and responds; whether someone comes when they ring the bell beside their hospital bed. The fact is that most consumers do not have any information on clinical (medical) quality that would enable them to make a judgment. According to a recent national survey sponsored by the Kaiser Family Foundation and the federal Agency for Health Care Policy and Research (AHCPR), most Americans (61%) have not seen any information comparing the quality of health care plans, doctors and hospitals within the last year.
Consumers generally rely on the recommendations of friends, family and doctors they know, to evaluate the quality of, and choose among, doctors, hospitals and health plans.
That consumers rely on familiar sources should not be a surprise, given that there is very little information on quality available to them, and that the information to date has generally been provided by employers, who are regarded with some skepticism. The fact is that this situation is about to change. There are a number of initiatives underway to produce so-called "performance measurement" information, and make it available to large purchasers of care (government, employers) and --in a user-friendly form--to consumers, as well. Healthplan Employer Data and Information Set (HEDIS) developed by the National Committee for Quality Assurance (NCQA) and the outcomes measures being developed by the Foundation For Accountability (FACCT) are two of the more broad based efforts involving employers, health care providers, consumers and government. These are still in the early stages of development and it has proven very difficult for the experts to develop measures of care that meet all the needs of the different parties. As you note, outcomes are difficult to measure, particularly because of the difficulty in adjusting for the different health status of different patients.
Another difficulty in producing comparative information on quality is the lack of standardized data. Every health plan and provider has a different definition for a similar item, so comparing one to another is an apples-to-oranges thing. There is a great deal of consensus on the need to standardize, but no consensus on who is to decide what the standard is. It will probably be necessary for the federal government to take the lead in this area.
Dr. Donald Fisher of the American Medical Group Association responds
Given relevant information regarding their health status and their health care, patients can and do assess the quality of the care they receive. It is true that the clinician's assessment of clinical information cannot, and should not, be replaced by patients' assessments. Physicians know about technical quality of care: whether the correct diagnosis is made, the right procedure is performed, and the level of skill with which a service is delivered or a procedure performed.
However, patients know something equally as important in the judgement of quality. They know how medical services impact on their ability to function up to their capacity. They know whether or not medical care improves their quality of life.
Today, there are powerful tools with which to measure patients' perceptions of how they are functioning and how well they feel. These measurement tools are easy to use and the results can be adjusted for case mix. Physicians across the nation are beginning to use generic health status measures to help them and their patients make better use of declining health care resources.
A question from Claire Read of San Juan Capistrano, CAI am 68 years old and have been grateful to have Medicare ever Since I qualified. I went to an HMO because of the drug benefits in summer of 1995 and my usual drugs were covered. At the end of the years my plan went on a "formulary" and they weren't any more. The suggested substitutions were unsatisfactory so I appealed the process of having an exception made. It took nine months through their denials and eventually through an agency of the federal government, which arbitrated in my favor. Secure Horizons now fills my prescription for Pepcid but only for a year. Am I going to have to appeal again? Incidentally they own the drug company which covers the prescriptions. Isn't this a virtual monopoly which should be regulated?
Cheryl Matheis of the AARP responds
Medicare has a special system for appealing treatment decisions by HMOs. As you observed, it is slow and clumsy; however, it is far superior to what most people in HMOs have who are not on Medicare In the next year, the Medicare appeal process will be improved in many ways, and in particular the time limits for completing appeals will be made much shorter. As for whether you will have to appeal again, it is difficult to say without seeing the actual decision in your case.
You should consider yourself fortunate. Medicare guarantees review of HMO medical decisions by an outside, independent organization having no financial or other ties to the HMO. Your situation highlights the need for such outside review. It appears from what you say that your HMO has a financial interest in promoting a particular drug. If you were not on Medicare, your case would have been reviewed solely by persons employed or affiliated with the HMO, who would probably would have felt pressure to prescribe the drug that is the best deal for the HMO rather than the drug that is most suitable for you. That would not be a fair review. Your Medicare appeal was fair, and in the future it will be much faster. The non-Medicare world has a long way to go to catch up.
The second part of your question hits on a difficult issue--how to apply the market regulatory laws such as antitrust to prepaid health care, which operates under different incentives than fee-for-service. The antitrust laws prohibit "tying" arrangements whereby the purchase of one product is tied to the purchase of another product. The laws also prohibit monopolies because they foreclose market competition, resulting in higher prices. The regulatory agencies (Dept. of Justice and Federal Trade Commission) are looking at healthcare acquisitions, and have challenged some, but they are having some difficulty showing how some of them--in particular "vertical integrations" involving the merger of different levels of production--actually foreclose competition.
Dr. Donald Fisher of the American Medical Group Association responds
This person will need to appeal the decision again in most instances. However, medical groups handle situations like this differently. If the prescription change is medically indicated, the group can override the formulary and prescribe a different medication.
The comment about Secure Horizons owning their own drug company is not true. Prescription Solutions is a Pharmacy Benefit Management company which only administers the program; they are not a pharmaceutical company and, therefore, not a monopoly subject to those types of regulations.
A question from Shirley Paul of Charlottesville, VAThe state of Washington now authorizes insurance coverage for over 30 complementary health care therapies such as massage therapy. In your estimation, when will other states follow in Washington's footsteps, and what will it take to get insurance companies to institute this kind of so-called "alternative" coverage?
Cheryl Matheis of the AARP responds
Other states are likely to follow the example of Washington when and if there is a concerted call from the public for coverage of alternative therapies. Coverage is likely to become more widespread when alternative treatments and therapies are shown by research to be safe, effective, and at least as cost efficient as other therapies. In recent years, in traditional medical circles more research has been undertaken to examine the effectiveness of alternative therapies. The results of this work will be important in any efforts to include alternative therapies as covered health benefits. As guardians of public health, states also would have an obligation to consumers to assure that qualified personnel perform the alternative treatments.
In an era when employers and the government are anxious to reduce the cost of health care, insurers are generally reluctant to expand benefits to new groups of providers. In traditional fee for service coverage, a whole new group of providers becomes eligible to bill for services, and insurers expect their total claims payout for all services will go up. Therefore, it is likely to take both strong medical evidence in support of alternative therapies and more widespread public support to overcome insurers' resistance.
Dr. Donald Fisher of the American Medical Group Association responds
The state of Washington did pass legislation to allow complementary health care therapies last year. Other states will probably not follow suit because most people realize that when you increase services, you must also increase costs or premiums. The voters in Oregon realized this and voted down their version of this bill on November 5. It should also be noted that the state of Washington is now planning to introduce legislation that would appeal that decision.
A question from James Shanks of New York, NYI am 25, self employed, and have an artificial heart valve- hence, I will need insurance and regular care the rest of my life. What new options can I look forward to 10, 20, 40 years from now for health care maintenance if there is no form of regulation to protect a non-economically viable insurance consumer like myself?
Cheryl Matheis of the AARP responds
Assuming that you have health insurance now, the recently passed Kassebaum-Kennedy legislation requires that insurers guarantee the renewal of policies regardless of the insured's health status. It will also offer some financial relief to you over the next 10 years, by gradually increasing the tax deduction which self-employed individuals can take for health insurance premiums. It rises from 30% today to 80% by 2006.
Nearly half the states have established risk pools for people with health conditions which prevent their getting coverage in the private market. The cost of coverage in these state high risk pools is subsidized in various ways in order to keep the premiums within a certain percentage of the cost of insurance to an average individual.
In twenty years, we will have to see what action Congress and the states take to keep health coverage available and affordable to those who need it. A few states have programs to help subsidize the cost of coverage in risk pools and other state programs which aim to extend health coverage to those without it. Given the current transformation which is going on in health care, in 20 years the solutions may or may not be those that we see today.
In forty years, you will be eligible for Medicare. There are predictions that Medicare may not be around in the future. Although the program may be different in some respects after reforms to assure its long term viability, public opinion polls show continued support for Medicare which assures access to health care for all elderly regardless of health condition.
Dr. Donald Fisher of the American Medical Group Association responds
As the marketplace reforms our health care system, a level playing field must be assured. This means that insurers of the health of populations must be prohibited from cherry picking and risk shifting. If the population of insureds is large, and the population of insurers is large, then individuals who pose higher risk are less likely to be excluded. Self-employed individuals should have access to health care purchasing cooperatives—some HMOs are currently community-rated and sell health insurance to individuals—because every American should be able to afford basic health care, including those suffering from chronic conditions.
A question from Epi Bodhi of Amherst, MAWhy do HMOs and large health services corporations find it necessary to keep merging?
Cheryl Matheis of the AARP responds
Simply put, to keep and build their ability to compete in the marketplace. The health care system is a business. Health care services (health care and health care products) are made available to consumers (including patients) by health care companies -- HMOs, hospitals, physicians, nursing homes, drug companies, etc. Payment goes to the companies from consumers; directly, from their own pockets -- or indirectly, through insurance or government programs.
Starting in the early 1980s, the payers -- consumers, employers and governments -- began reacting to sharply rising health care costs by cutting back on the size of payments they will make for many services, and by shopping more aggressively for the best services at the lowest prices. These tactics have greatly increased the levels of competition in the health care marketplace.
Health care companies now sell to growing numbers of consumers, in a market in which the dollars available to pay for services are increasingly harder to come by. As a result, these companies find that they must be more efficient and productive if they are to price their products at attractive levels. As in other parts of the business world, big, well financed (and well managed) companies are better equipped to engage in price competition than are smaller, weaker firms. Companies that have a difficult time competing adequately tend to leave the marketplace. It is the need to become more skillful competitors that is largely responsible for the increasing numbers of mergers, consolidations, and other market-consolidation activities now taking place in the health care industry.
Dr. Donald Fisher of the American Medical Group Association responds
Mergers are contemplated for many reasons: primarily to become more competitive in health care markets. There are many aspects to the health care product that can be enhanced one way or another to make it more readily available or appeal to more individual patients or customers of the service. A merger may be undertaken to capture efficiencies, perhaps to more fully utilize unfilled beds in a hospital, or provide more patients access to specialists that are in high demand in a community. A merger may also be undertaken to eliminate redundant or unnecessary expenditures. For instance, two merging HMOs might consolidate their marketing, accounting, and billing departments.
A question from Dennis Kelly of Bethesda, MDHow will medical savings accounts impact the continuing evolution of profits in various segments of the health care markets?
Cheryl Matheis of the AARP responds
The increasing availability of MSAs -- a personal savings account for medical expenses coupled with a high deductible catastrophic health insurance plan -- creates the potential for "winners" and "losers" in the health care market. For instance, while an MSA arrangement may make employer health care costs more predictable, consumers may find their out-of-pocket costs more unpredictable. Consumers, whose employers typically "negotiated" with insurers for low health care insurance costs -- would find they are their own negotiator and would be unlikely to have the same ability to control their own costs. Consumers would also be vulnerable to decisions by insurers about what health care expenses actually count towards the catastrophic deductible or what expenses are covered after the deductible if met -- creating the potential for even greater out-of-pocket costs.
While some private insurers, namely those offering high deductible catastrophic plans, stand to benefit from a proliferation of MSAs, other insurers, predominantly managed care plans, stand to lose as the availability of MSAs reduces participation in cost-effective managed care arrangements. Finally, wealthier and healthier individuals may enjoy the tax advantages of MSAs, namely an exclusion from income for employer contributions and tax free accumulation of interest. Yet the average individual, and in particular sicker persons, could find themselves at greater risk for higher out-of-pocket costs as plan premiums and deductibles increase and employer contributions decrease.
Dr. Donald Fisher of the American Medical Group Association responds
Medical Savings Accounts (MSAs) will provide another option for consumers to choose from. MSAs have the potential to create profits for the financial institutions that market them, and could create savings for individuals whose need for medical services is limited. These changes in the flow of revenues will have variable affects on many segments of the market for health care services.
A question from Kenneth Lieb of Golden, CODo you agree that in America is we have three goals with regard to health care, and that are not entirely compatible? First, we seek cost containment; second, we seek unlimited access (at least for ourselves and our families) to new technologies for medical care; and third, we think that universal health care coverage is a desired goal. I believe that as a society, we cannot achieve all three, and thus, we must accept some form of health care rationing. If you agree, what suggestions do you have as to the most equitable form of health care rationing?
Cheryl Matheis of the AARP responds
Universal coverage, cost containment, and unlimited access to new technologies are identified as goals that are, in the final analysis, impossible to realize simultaneously. While this may be literally true, there are many steps that can be taken before resorting to rationing of health care. In addition, there are other goals that ought to be accomplished, such as reasonable access to high quality, and affordable care.
Universal coverage is essential. There are currently 40 million individuals--15 percent of the U.S. population--who are uninsured. Working people and their dependents account for 85 percent of the uninsured. In addition, there are many millions more who are underinsured. Lack of coverage often acts as a barrier to needed medical care. The uninsured are twice as likely to be hospitalized for conditions that can be averted by outpatient care (e.g., acute asthma attacks). Death rates among the uninsured are 25 percent higher than among those with health coverage.
Cost-containment that ensures the most appropriate use of resources is a rational way of conserving public and private expenditures for health care. But we must guard against cost-containment efforts that unreasonably inhibit access to care. There are many steps that can be taken before resorting to rationing. For example, methods of provider reimbursement should promote cost-containment, encourage efficient delivery of services, and compensate providers fairly. Health care providers should share in the responsibility to be fiscally prudent. The federal government should play a role in establishing more uniform reimbursement practices and rates for health care providers.
It is unrealistic to assume that anyone will have "unlimited" access to new technologies. Nor is "unlimited" access necessarily desirable. Both the efficacy and the effectiveness of new technologies must be established for particular conditions before they should be administered. It must be clinically determined that a particular technology is the most appropriate form of treatment for any given patient because, it is important for health care decisions to be based on quality considerations and not merely cost effectiveness.
To summarize, it is premature to consider rationing health care services. There are many efficiencies that should be implemented before draconian methods are instituted.
Dr. Donald Fisher of the American Medical Group Association responds
These questions were considered extensively during consideration of President Clinton's Health Security Act. The concept of rationing services may well apply in countries where the pool of available services is limited and prices are fixed. But in America there are many physicians and a good supply of individuals who want to provide health care services to other individuals.
The challenge is to manage the care that is provided to assure that there is an appropriate allocation of resources. Care management yields cost efficiencies, which allows systems of care to make more services accessible to the pool of individuals who need them.
America has not reached the point of having to ration health services as we did gasoline in the 1970s. If any health care delivery system restructuring is undertaken as a matter of national policy, and the basis of the restructuring is the competitive marketplace, rationing will not be necessary.
Nicholas Penning, Arlington, Virginia
I find it increasingly more difficult to get the tests my doctor orders or wants ordered for me. He is not a "health plan" doctor. But he is the one psychiatrist who has been able to end 40 years of depression and put a positive approach back into a life that had been filled with anguish and despair.
Our venerable local hospital has turned into a for-profit institution. And the HMOs offered to us through work do not want to pay any hospital except those they choose.
I want the freedom to pick my own doctor, the best doctor for me. I want the freedom to choose my own local hospital, which is just a mile or so away.
Robin Wantland, North Richland Hills, TX
I was recently laid off from a management position in a Columbia-owned hospital that is trying to enhance its bottom line. It is the first of many waves of layoffs to occur in the near future. Most of the hospital staff go to work each day with more to do than they can manage and worry each day that they will be the next one to "get the axe".
It is impossible to provide quality services under these adverse conditions. Last year, I was associated with a hospital closure that affected approximately 200 jobs. Most of the survivors never really recovered from that. I believe that for-profit hospitals, in the quest to satisfy stockholders, have lost touch with the very nature of the hospital business - quality patient care that leads to healing and maintenance of good health. I believe that the large, for-profit chains should be more heavily regulated by a group with no special interests.
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