Standing by Managed Care Inefficiency?

Lawrence R. Huntoon, MD, PhD
Article Type: 
Winter 1997
Volume Number: 
Issue Number: 

Achey breaky hearts, stolen hearts, betrayal, love lost, and love gone music loves misery and country music has it all. But, the queen of country music is singing a new tune these days. Miss Tammy Wynette says forget about “Stand By Your Man”; better stand by your medical records instead.

In a story carried on TV this summer, Miss Tammy Wynette told how her “private,” “confidential,” medical records were displayed at nearly every grocery check-out counter in the nation for all to read.(1) The story told how a “hacker” obtained her private medical records and “sold them to the National Enquirer.” The popular tabloid put the story on the cover of their “magazine.”

The CBS news feature, “Eye on America,” went on to explain how more people have greater access to more “private,” “confidential” medical information than ever before thanks to computers, computer networks, hospital networks, integrated health networks, HMOs, insurance networks, government organizations, and a variety of other information gathering and sharing entities. The weak link in the system is security. As the Tammy Wynette story proves, your “private,” “confidential” medical information could easily end up as front page news. The news story went on to show another gentleman in silhouette whose employer routinely got a printout of all of the medications his employees were taking. Based on the type of medications that appeared on this gentleman’s list, the employer was able to figure out that his employee had AIDS. The government and HMOs, of course, have been strong promoters of developing large, easily accessible, computerized, information sharing networks (“Healthy People 2000 Program”). Although there isn’t much the government and HMOs do well, destroying medical privacy is one thing they have been exceptionally good at.


Managed Care Efficiency?


Faster than a speeding bullet, more powerful than a government sponsored monopoly, able to leap over small solo physician practices in a single bound...Look, up in the sky...It’s a bird...It’s a plane...No!...It’s Super HMO propaganda! But, what it’s not, is efficient.

As California physician, Gary F. Krieger, MD, writes: “The problem is I see no evidence that managed care has actually decreased overall costs. There is evidence that it initially decreases the rate of spending, but not that it decreases total actual costs of delivering health care.”(2) Shhh....not so loud, Dr. Krieger. The HMOs will hear you speaking this “heresy,” and you’ll be “deselected.” He goes on to say, “There is also no good data that managed care improves quality... Efficiency, in my opinion, has clearly decreased, not increased.”(2) Dr. Krieger...why not just paint a target on your back to make it easier for the HMOs?

Dr. Krieger, a solo pediatrician in greater Los Angeles, then relates how diabetes is treated under managed care. The first thing he must do when he suspects diabetes in a child is he must send the child to a lab 20 miles away, because that is the lab “mandated” by the “efficient” managed care organization. After obtaining the result of the blood glucose (just short of the sugar content of maple syrup), he has to obtain “authorization” from the “efficient” HMO so that a specialist, trained in managing diabetes, can see his patient. He further explains that the specialist wants to admit the patient to the hospital, but can’t because the specialist was only “authorized” to provide a consultation, not to actually do anything about what he found. The next step in this “efficient” managed care process was for Dr. Krieger to call the HMO yet another time to obtain “authorization” for the specialist to admit the sick child to the hospital. Dr. Krieger, thinking of how best to treat his patient, wished to provide appropriate education to his small patient and the patient’s parents in addition to lowering the blood glucose, but he made the “mistake” of telling the HMO that he wanted to educate the patient and parents.

Never, ever tell an HMO you intend to do something good for a patient in excess of minimalist care. As Dr. Krieger found out, such noble and clinically well-founded plans lead to nothing but trouble under managed care. The HMO, of course, after hearing all of this, denied the admission for the child! Dr. Krieger was persistent, however, and after more time spent on the phone, he was able to “win admission” for his small patient. So, the HMO’s computer efficiently communicated with the hospital’s computer to tell the hospital the admission had been “authorized” and all was well...but, all was not well. Dr. Krieger explains: “Then the computer broke down, causing an additional two hour delay in admission. Finally, the boy was admitted and all is well. But, what would have taken me one to two hours in previous days took me almost 24 hours to accomplish.”(2) The HMOs, of course, would argue that most other HMOs likely took 48 hours to accomplish admission, and, therefore, they are “more efficient.”


Managed Care Complaints...What Complaints?


Just like gag clauses which managed care organizations claim don’t exist, now we are told by the HMOs that there really aren’t any significant complaints about managed care. In an article in The Internist (July-August 1996) entitled, “Complaints About Medicare HMOs Vary As Growth Continues,” a managed care research company in New York City tells us the vast majority of Medicare managed care customers are “highly satisfied” with managed care. And, what is the main indicator that consumer groups and HMO executives use to “monitor” managed care complaints? Complaints registered with the federal government, of course. Federal complaints against HMOs are said to be “rare.” Sounds right to me. I mean if federal complaints are rare, there must not be a problem. Yes, the FAA said the planes were safe too, although some of the FAA officials didn’t personally want to fly on some of them, but that’s a different story.

It turns out the reason federal complaints against the HMOs are “rare,” is because the “complaints must go through at least two levels of internal HMO appeals before qualifying for federal review.” This, of course, gives the HMOs at least two levels of opportunity to “lose” or “destroy” the complaints. Since the words “lose” and “destroy” aren’t in the HMO’s vocabulary, the HMOs refer to this process as “complain resolution.” Of course, if the patient happens to die while he or she is waiting for his complaint to reach federal levels, that too is “complaint resolution.” The same terms have many different meanings you know. It’s whatever happens to fit into the context of the picture at the time. It’s the “whole language,” “see and guess” approach to reading and language that has been so popular among those in the NEA and Department of Education in past years...the one that has led to an epidemic of illiteracy. The article goes on to inform us that the Medicare managed care referral system is “based on money, not quality care."


Charity Care Suffers as Managed Care Companies Prosper



Senator Ted Kennedy says MSAs are “only for the healthy and wealthy,” and HMOs, the precursor of government single-payer socialist-style health care, are “better” for us in the “common good” sense. But the guy who says he “forgot” and left the lady in the lake, seems not to recognize that HMOs generally forbid physicians from serving the poor.

An article appearing in AMNews tells us that “physicians who work for HMOs, for-profit companies, and integrated delivery systems can’t care for the uninsured as freely as when they practiced on their own because they don’t have the plan’s permission to use personnel and other resources.”(3) A doctor from Washington explained: “When I ran my own show, I could take care of this, but now I can’t.” The article further stated, “Increasingly, physicians are like ‘waiters and waitresses who work for a restaurant chain. They may want to serve the poor for free, but they can’t.’ ” In years past, indigent care was partially subsidized by cost shifting, but now that HMOs are becoming the only “choice,” there’s no one left to shift these costs to.” Dr. Robert Doe of Pennsylvania says, “We can’t look to cost shifting anymore as for-profit plans and systems are moving those dollars to their bottom lines  — or into their pockets.”(3)


HMOs Save Money By Closing Hospitals and Driving Specialists Out of Town


I read in yet another article that operating margins of small rural hospitals in Pennsylvania are falling and are now at a six year low.4 The fiscal ills of small hospitals are being caused by the managed care industry. If the trend continues, it is predicted these small rural hospitals will have to close. This will mean people will have to travel farther to receive their medical care — another “bonus,” courtesy of HMOs. And, since specialists often depend heavily upon hospitals for procedures and other such things, once these hospitals close, the specialists will be forced to leave town. This will leave an increased patient load and burden on the remaining gatekeepers who, lacking the resources of the hospital and specialist back-up, may be ill prepared to handle the increased load. Quality of care will undoubtedly suffer. And what does the Executive Vice President of the Pennsylvania Medical Society have to say about this trend? “That trend could mean good news for patients,” he says. Excuse me? A spokesman for the Pennsylvania Health Care Cost Containment Council, Mr. Joe Martin, sums it up by saying that “it is good news for those who recall the double-digit increases in health care spending as little as five years ago. It suggests the pressures in the marketplace to cut costs, which have included things like the growth of managed care, consolidation of hospitals, have had an impact.”4 I surmise this article must have been written for those who can’t read.




1. Tammy Wynette on CBS Evening News, July 22, 1996.

2. Krieger GF. What managed care can’t seem to manage is efficiency. AMNews 1996;39(27):20.

3. Borzo G. For-profit plans called on to provide indigent care. AMNews 1996;39(27):8.

4. Small Pa. hospitals struggling, study finds. The PJ Weekender, Jamestown, NY, July 20, 1996.


 Dr. Huntoon is a neurologist in Jamestown, New York. His address is 560 West Third Street, Jamestown, NY 14701.

Originally published in the Medical Sentinel 1997;2(1):29-31. Copyright ©1997 Association of American Physicians and Surgeons.



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