HMOs: The Health Care of the Beast
Many people are concerned about rising health care costs. In reaction to this, some individuals and companies are gravitating
toward the assumed lower prices of Health Maintenance Organization (HMO) health plans. HMOs spend billions of dollars
each year advertising their low cost services. While these savings look good on paper, there are many pages of small print. The
explanation after the asterisk indicates that not only do the HMOs lack lower costs, but they also short-change the patient in
quality care. Much of the money spent on premiums goes directly into the pockets of stockholders and less is then available for
patient care. In addition, the main clinical decisions are made not by doctors, but by a board of directors more interested in the
bottom line than in little Jennie’s cough. When the facts are considered, HMOs should not be permitted to assume the role of
the primary medical care-givers.
Traditional insurance companies and HMOs have comparable premium rates. HMOs are too profit oriented and, because of
this, their patient care lacks in quality. One way that HMOs cut their costs is to spend less on direct care. As opposed to
fee-for-service (FFS) companies, patients relying on their HMO spend 17 percent less time in the hospital regardless of the
The Research paper on Insurance Company Hmo Care Health
... want. Also patients lose the quality of care because HMO? s interfere with the health care providers decisions. The Health Maintenance ... really care about you. The insurance company only cares about how much money it has to spend on ... you as a person and if you need a type of special care that cost ... a week. This process is extremely expensive costing hundreds of dollars each time and what ...
degree of their illness. This said, patients in Medicare HMOs also spend about 17 percent less time than they would in a
traditional setting. It is surprising that, in spite of this fact, Medicare patient risk contracts actually cost Medicare 6 percent
more than they would have if done in a fee-for-service setting. (Rice, 79-80) The lack of savings is not limited to Medicare
recipients. Spending on health care in California, which has one of the highest concentrations of HMOs of any state in America,
is about 19 percent higher than the national average. There has only been one year since HMOs became so prevalent, 1994, in
which employers nationwide saw a drop in their health insurance costs — and it was an almost imperceptible 1 percent. These
companies’ earnings continue to skyrocket, and the HMO executives are always on the lookout for ways to increase profits by
reducing care to their members. It is troubling that while cost remains nearly the same, the deficiency in quality service continues
to increase.
Most of the money generated by FFS insurance goes directly to patient care and physicians’ salaries. In recent years, the idea
of physician owned clinics has gained new ground in the industry. A group of doctors band together to create their own private
corporation. These businesses, being privately owned, have the luxury of not having to deal with the fiscal demands of
stockholders and other investors. Thus, the doctors have the ability to use the generated funds to care for their patients. Yet
with volume purchasing of gauze, needles, and other medicating implements, they are able to compete favorably with the
HMOs.
Part of the monies generated by HMOs is used to pay stockholder dividends; the demands of the investors must be met. In
1994 salaries and stock awards to the heads of the seven largest HMOs averaged $7 million each. Shareholder-owned
The Term Paper on Hmos Takes The Care Out Of Health Care
... universal health care has made so that Canadians see their physician more often than Americans and the patient to doctor ratio, 1 doctor to every ... instance, in 2001, the government's reimbursement to the HMOs went up only 2 percent while the insurance company's costs went up between ...
companies saw earnings increase by as much as 20 percent each quarter (“News”).
Because of this, the corporation rather than
the physician becomes the patient care decision maker. In other words, the medical decision making process is subject to
approval by a board of directors. In some cases these individuals go to great lengths to save money. For instance, some HMO
doctors are forced to sign a “gag order,” which forbids them to advise their patients about expensive medical care which their
HMO does not want to pay for. Doctors may actually be penalized by their HMOs because, in violation of a gag order, they
discussed with their patients the option for a procedure the HMO did not want to pay for. Equally maddening is that HMOs
sometimes give their doctors financial bonuses for not ordering tests or referring their patients to specialists. Some HMOs pay
doctors according to a “withhold” system, in which some of the money the doctors are owed is held back and paid only at the
end of the year, and only if the doctors have not ordered too many tests or referred too many patients to specialists (“Did You
Know”).
HMOs are not the only answers to cost control. Most physicians practicing in the United States consider their profession to be
very much a form of art (Kleinke).
The definition of art infers that within its sphere there are many variations and preferences.
After all, one should not ask Picasso to carve like Michelangelo. Physicians too differ in their methods of treating patients.
However when needless tests and procedures are done the treatment will cost more. This is waste. Many suggest that cutting
waste will lead to a cut in quality. This is not necessarily true. Consider the following: an otherwise healthy forty-year-old male
comes to a clinic complaining of a sore throat. This is a good nonspecific symptom, so naturally some tests are done. Some
blood is drawn, a culture taken, and an electrocardiogram performed. An EKG in this case is not medically necessary, but
many physicians still do not hesitate to order one. By eliminating useless procedures, lower cost can be maintained. To
The Term Paper on Hmo Regulation Health Care
... said, "that it returns decision-making power over patient care to physicians on issues like admitting health plan members to hospitals ... to medical care. Most of the criticism comes from consumers using these HMO's and the politicians implementing their procedures. Some of ... decision is made to eliminate frustrating features of most doctors' work: like getting insurance companies to approve medical ...
determine which procedures are useless, scientists would need to perform ongoing studies of patients that fall under their
investigative categories. For instance, every year about 80,00 Americans get a carotid endarterectomy, a kind of Roto-Rooter
job on the clogged neck arteries. Typically costing $9,000, counting the bill for the hospital stay, the operation is designed to
prevent strokes. Another triumph of modern medicine? Or an overly risky, overdone alternative to cheaper drug therapy?
Incredibly, no one knows for sure, and no one is tracking the patients on a systematic basis to find out (Marmor 90).
Eliminating waste from the health care system is imperative. However it is not good to make “expensive” synonymous with
“medically unnecessary.” In this struggle to contain cost, four areas of waste have been identified: ineffective or harmful, of
uncertain effectiveness, ethically troubling, and allocationally ineffective (Marmor 89).
No one disagrees that harmful care
should be done away with, and almost everyone would like to see more cost effective care. It is when the argument reaches the
categories of “uncertain effectiveness” and “ethically troubling” that things get interesting. Most physicians are likely to resent an
intrusion upon their clinical judgement, patients would be unlikely to accept denial of a procedure they think to be beneficial,
and the world can never seem to agree on what is morally correct. “While many physicians will refrain from performing
procedures known to be ineffective, most will not be willing to unilaterally cut [sic] other ‘wasteful’ activities” (Marmor 106).
HMOs are overly concerned with profit margins. The physicians employed by them work under a system of capitation through
which a physician receives a certain amount of money per patient no matter the frequency of office visits. Dr. Ronet Lev, an
emergency physician at UC San Francisco Hospital, states: “When I was in medical school, which wasn’t that long ago, you
The Term Paper on Improving Patient Care
There is growing enthusiasm in the United States about the use of electronic medical records (EMRs) in outpatient settings. More than $20 billion of the federal economic stimulus (the American Recovery and Reinvestment Act of 2009) is slated to assist physicians, hospitals, and other health care settings in adopting health information technology (Gill, 2009). The government wants to shift into the ...
would do the best for the patients. Now, with the capitated system, the pendulum has swung the other way and instead, you do
the least” (Uche).
In order to increase profits, the doctors employed by HMOs are continually having to take on cases they are
not wholly prepared to deal with. Practices such as psychiatric evaluations and even minor surgery are now found within the
realm of the primary care physician. Some HMOs give doctors monetary benefits and financial incentives to reduce the number
of patient referrals to specialists and to ensure the care given comes at the least expense. “These financial incentives create what
many doctors see as an ethical conflict: the less care they give patients, the more money they make” (Uche).
Some HMOs are
actually using a new technique called “telemedicine.” In these programs, sick patients are encouraged to call a phone service
through which nurse practitioners, rather than doctors, receive the individuals’ complaints and make diagnoses and prescribe
treatments without physical examination. The drawbacks of this practice should be obvious — but the bottom line is that it is
cheaper to pay a nurse practitioner to prescribe on the telephone, rather than to pay a doctor to examine the patient (“Did You
Know”).
With the lure of alleged inexpensive care, many poorer families and individuals are drawn to the HMOs. The elderly are being
especially hard hit. The federal government sees the HMOs as a way to cut back on medicare spending. Thus, medicare and
medicaid subscribers are forced into substandard care. A study done by a group of individuals and published in the Journal of
the American Medical Association concludes that the subgroups of poverty stricken families and the elderly are affected most
by the HMO healthcare practices. One of the results was that for elderly patients (those aged 65 years and older) treated under
Medicare, declines in physical health were more common in HMOs than in FFS (fee-for-service) plans (54 percent vs 28
percent; P<.001).
So 26 percent of the patients studied had worse health outcomes because of the horrid care given to them at
The Essay on Working Conditions Patients Work Care
Comparison Why would anyone be in the healthcare field? First, there are different types of positions available. Second, this is a very rewarding career for those who enjoy caring for others. Although, most people think there are a lot of differences between certified nursing assistants and licensed practical nurses, they share the same type of work, working conditions and job outlook. The nature ...
their HMOs (Ware, et al.).
In a study done with stroke patients, statistics indicated significant differences in residual defects .
For example, at discharge a much higher proportion of enrollees had lingering problems with their speaking ability (enrollees
53.7 percent, nonenrollees 34.7 percent, p<.01).
Similarly, motor deficits were more likely to persist among enrollees than
nonenrollees at discharge (enrollees 58.6 percent, nonenrollees 49.5 percent).
A higher prevalence of residual deficits among
enrollees compared to nonenrollees also existed for other neurologic symptoms such as facial motor deficits and sensory
deficits at the time of discharge, although statistical significance was marginal (Rechtin, Clement, and Brown 183-184).
The following incidents clearly demonstrate the deterioration of healthcare under an HMO. A 27-year-old man from central
California was given a heart transplant, and was discharged from the hospital after only four days because his HMO would not
pay for additional hospitalization. Nor would the HMO pay for the bandages needed to treat the man’s infected surgical wound.
The patient died. A mother in Atlanta called her HMO at 3:30 a.m. to report that her 6-month-old boy had a fever of 104 and
was panting and limp. The hotline nurse told the woman to take her child to the HMO’s network hospital 42 miles away,
bypassing several closer hospitals. By the time the baby reached the hospital, he was in cardiac arrest and had already suffered
severe damage to his limbs from an acute and often fatal disease, meningococcemia. Both his hands and legs had to be
amputated. A court subsequently found the HMO at fault. A healthy 2-year-old boy was taken to a local hospital after a fall,
with a stick lodged between his upper lip and gums. Once there, health care personnel repeatedly mis-diagnosed the boy’s
condition, and, mindful of the HMO’s cost-consciousness, refused to authorize an $800 CT scan that would have confirmed
that he was developing a brain abscess. As a result of this poor treatment, the boy was left blind and brain damaged. An HMO
refused to let a highly experienced neurosurgeon operate on a 30-year-old woman’s spinal cord tumor, insisting that its own,
relatively inexperienced, doctor perform the operation. The first neurosurgeon even agreed to waive his usual $12,000 fee,
given the life-and-death nature of the tumor, leaving the insurance company responsible only for hospitalization costs. The
HMO still refused (“List”).
The main purpose of physicianship is to treat sick patients and to alleviate suffering. When a doctor is employed by an HMO,
he is no longer able to live up to his responsibilities. HMOs are so concerned with profit that the patient becomes second in
line, and the organization rather than the physician makes the clinical decisions about the care of the sick.. Admittedly, many
people are concerned with excess cost, but when savings come at the expense of quality, it can hardly be considered a valid
trade-off. It is clear, then, that if the integrity of the medical profession is to remain intact, HMOs should not be allowed to take
over as the primary medical care-giving entities.
Works Cited:
“Did You Know . . . ?: Some Disturbing Facts About HMOs.” http://www.hmoabuse.com/hmo/didyou.htm
Kleinke, J.D. “The Industrialization of Health Care” JAMA 17 Nov. 1997 (278):1456- 1457.
http://www.ama-assn.org/sci-pubs/journals/archive/jama/vol_278/no/17/pu145601.htm (12 Apr. 1998).
“The List of Cases Continues to Grow.” http://his.com/~pico/1-25.htm
Marmor, Theodore R. Understanding Health Care Reform. New Haven: Yale UP, 1994.
“News About the HMO Crisis.” http://www.hmoabuse.com/hmo/news.htm
Retchin, Sheldon M., Dolores Gurnick Clement, and Randall S. Brown. “Care of Patients Hospitalized with Strokes Under the
Medicare Risk Program.” HMOs and the Elderly. Ed. Harold S. Luft. Ann Arbor: Health Admin. P., 1994. 167-194.
Rice, Thomas. “Responses and Discussion.” HMOs and the Elderly. Ed. Harold S. Luft. Ann Arbor: Health Admin. P, 1994.
79-83.
Uche, Ijeoma. “Advent of Managed Care Raises Criticism-Praise.” UC San Francisco.
Ware, John E., et al. “Differences in 4-Year Health Outcomes for Elderly and Poor, Chronically Ill Patients Treated in HMO
and Fee-for-Service Systems.” JAMA Abstracts 2 October, 1996 (276): 1039-1047.
http://www.ama-assn.org/sci-pubs/journals/archive/jama/vol_276/no_13/oc5b28.htm (12 April, 1998).