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Clash of the Titans: Doctors, HMOs, Insurers On Health Care


While health reform gets the headlines, another health battle with important implications for consumers rages in Washington, attracting little of the public attention it deserves.

This fight is over control of America's health care system. Who will run it? Who will decide what care patients receive? One special-interest titan, the American Medical Association, is pitted against two others, insurance companies and health maintenance organizations, in one of the fiercest lobbying contests on Capitol Hill.

The AMA seeks legislation that it says would give patients and doctors more control over the care provided by HMOs and insurance plans. But HMOs and insurers charge that the AMA really wants to enrich doctors.

There's no love lost between these old foes.

To hear the AMA talk, HMOs and insurance companies are conspiring to rig the health care system against patients and doctors.

"Would you rather trust your life to an MD or an MBA?" declares one highly provocative advertisement run by the AMA, the largest doctors' group, to stir up public support.

The ad warns that without action, "government and insurance company administrators could end up determining which types of treatment are appropriate for patients like you."

Bristling at the ads, which play to public distrust of their business, insurance companies and HMOs have retaliated with a media campaign intended to inflame suspicions about greedy doctors trying to protect their own incomes.

"There are many groups out there with a vested interest in maintaining the failed elements of the old health care system who want to undermine HMOs," asserts Karen Ignagni, president of Group Health Association of America, a major HMO trade group. GHAA recently trooped HMO-employed doctors to Capitol Hill to pierce the perception that the AMA, which has 300,000 members, represents the entire medical profession.

This rancorous conflict arises from the AMA's attempts to prod Congress into intervening in a revolution sweeping the private health care marketplace.

The system of health insurance most Americans grew up with, which gives patients and doctors pre-eminent authority to make decisions about medical care, is being replaced by HMOs and insurance programs.

The AMA angrily complains that doctors' decisions are often second-guessed by company bureaucrats more interested in saving money than preserving good health. Specialists protest because HMO guidelines govern when patients may see them.

Doctors also fret over their incomes. Traditional insurance plans, paying physicians for each service, have made many doctors wealthy -- their average income is $170,000. But HMOs insist on paying a flat fee, often in the range of $10 a month per patient, putting doctors at risk. No matter how often a patient comes in for treatment, or for how long, the physician is paid the same monthly amount.

A greater financial threat to many doctors is the power HMOs have to take away their patients. HMOs contract with only a certain number of physicians, requiring patients to choose from that list; other doctors are left out in the cold.

AMA concerns have been mounting for years as HMOs, and other health insurance programs that manage care, have grown. Barely half of all Americans remain in traditional plans that give patients and doctors the broadest freedom; more than 45 million people are in HMOs, including roughly 25 percent of Marylanders.

But health reform triggered an alarm at the AMA. While the group espouses reforms that would guarantee health care for all Americans, it recognized that reform plans under consideration in Congress would accelerate the trend toward HMOs and managed care.

The AMA dispatched lobbyists to Capitol Hill to push two kinds of legislation: the "Patient Protection Act" and bills that would give antitrust protection to doctors in a community who want to organize to compete with HMOs and insurers.

According to the AMA, the Patient Protection Act protects physicians against unjust firing by HMOs, requires full disclosure of the means by which HMOs pay and monitor doctors, and guarantees consumers the right to see a doctor outside their HMO.

But the HMO group terms that description "misleading," arguing that the bill is designed to protect the economic interests of doctors at the expense of patients and employers who pay health care premiums. It would undercut HMOs' ability to control whom they employ, undermining efforts to assure quality and hold down costs, the group contends.

The AMA portrays its antitrust bills as an equitable way to even the playing field with insurers and HMOs, by clearing legal hurdles for doctors who want to set up their own health plans. In an example of the kind of heated rhetoric the AMA is using against insurers, AMA Executive Vice President James S. Todd declared in May the need for doctor-run plans: "Patients need protection from an insurance industry that is afraid of competition. This is an industry which is largely responsible for .. the current health system crisis."

But insurers charge that the AMA legislation, introduced in the Senate by Orrin G. Hatch, a Utah Republican, would result in price-fixing and physician boycotts.

The insurers have picked up support from unlikely sources, Consumers Union and the American Association of Retired Persons, which while fighting the insurance industry on some reform fronts have joined it in opposing the AMA's antitrust legislation on grounds that it would drive up prices and produce other problems.

Many employers and hospitals have also sided with insurers on the antitrust issue.

But the AMA has had better luck with the Patient Protection Act. Parts of the bill have been incorporated into reform legislation moving through congressional committees, though this does not guarantee these provisions will survive the many fights ahead over health care reform.

State medical societies have also been winning victories, securing state laws requiring HMOs to hire doctors who are qualified and willing to abide by HMO rules. The AMA does not itself support these so-called "any willing provider" bills, in part 11 because they conflict with another AMA goal: helping doctors form their own health plans -- which may adopt the same restrictive hiring practices employed by HMOs.

This illustrates one of the underlying issues in the fight over control of the health care system. Doctors themselves are divided -- much more than the AMA will officially acknowledge -- over the changing nature of the health care system.

The divisions were apparent in late June when the Group Health Association of America paraded scores of HMO-employed doctors through the Capitol, attacking AMA legislation. They included Dr. Robert S. London, an obstetrician and gynecologist in private practice until he joined Kaiser Permanente, an HMO in Baltimore, two years ago.

"There are all these myths" about HMOs, "and the AMA has been promulgating them," he complained, saying he joined Kaiser "because I felt I could practice better medicine."

Dr. Marcia Thompson, a radiologist who also works for Kaiser, emphasized that her commitment to HMOs goes beyond a paycheck. "I am a managed-care patient," she said. "My entire family is a Kaiser member -- from my 7-year-old to my husband."

In contrast to all the lobbying activity by the AMA and its opponents, there has been scant organized reaction from consumers. Polls show that many are divided over these issues, or just in the dark. But Americans have much to gain -- or lose -- from the fight over who controls and directs the health care system.

Even if both sides exaggerate the consequences of the legislation before Congress, there's no question that it would affect the quality and cost of care, but in ways that can't be accurately predicted in the heat of a battle dominated by propaganda. One thing is certain: No matter the outcome on Capitol Hill, the fight will continue to be waged in the marketplace, outside the Beltway, where the most important health decisions are being made today.

John Fairhall is a reporter for The Baltimore Sun.

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