Medicare HMOs: a bad deal for aged Plans are set up to manage money, not care


ONE OF THE KEY elements of the current debate on how to reform Medicare is to move increasing numbers of beneficiaries into health maintenance organizations. For the most part, this solution is not very well thought out. It may provide federal policy makers with a sense of satisfaction, but it will have a very uncertain, and potentially harmful, effect on Medicare enrollees.

Medicare is not a program that should be trifled with. Despite its many problems, Medicare protects many vulnerable people. It has lifted senior citizens out of medical destitution, and made many health care providers very prosperous. Thus, changes should be incremental, and made with beneficiary protection uppermost in policy-makers' minds.

Policy-makers think that HMOs can do a better job of managing the health care needs of senior citizens and thus help slow the rate of growth in the Medicare program's expenditures. There are problems with this approach that were brought home to me with striking clarity in the past few months.

Bringing the point home

Within two weeks in July, both my parents were diagnosed with cancer. Since mid-July, I have spent countless hours on the phone with my parents, family friends and physicians of all kinds trying to understand what the best diagnostic and treatment approaches are for each of my parents.

Through all their treatments, my parents have been surrounded by physicians, nurses and counselors who put their welfare at the top of their priority list. Treatment and testing decisions were based on what was best for my parents, not some witch's brew of arbitrary HMO guidelines. My parents were fortunate enough to have chosen their providers freely and have made very important decision in partnership with them.

These events have taught me how difficult and unfair it will be to con seniors into joining HMOs. There is nothing more valuable than choosing one's physician. If my parents had been in an HMO, they might have had to leave their primary care physician, who is the son of the doctor who took care of us while I was growing up. It is extremely unlikely that my parents would have had the benefit of going to the specialty physicians of their choice had they been bound to an HMO with a limited panel of providers. They would have been forced to use someone from the HMO's panel, unless they went out of the plan at their own expense, which they likely would not have been able to afford.

Their physicians ordered diagnostic tests for my parents that were detailed and rigorous, and, in some HMOs, might have drawn the ire of the plan. But it was necessary. Seniors should not underestimate the pressure on physicians in HMOs to do only what is minimally necessary, rather than what is best, to diagnose or treat diseases. The pressure on physicians caring for Medicare-HMO members will be great because older patients generally need more care than younger patients. This clinical imperative will clash head-on with the need for Medicare HMOs to show a profit on their Medicare contracts. Make no mistake about it: The HMO industry, which is rapidly becoming dominated by for-profit HMOs, will be very eager to make money on these contracts. The HMOs want this business because of the steady stream of federal dollars it will bring to them. It certainly is not because they have the experience to meet the medical needs of America's seniors.

Because only about 10 percent of all Medicare enrollees are currently in Medicare-HMOs, the manged care industry has very little experience with the problems of the elderly. The experiences so far are very mixed. Despite this anemic picture, HMO advocates insist that their approach to Medicare enrollees' care will be to limit patients' choices to only the most effective diagnostic tests and treatment options. But we understand very little about what works in the medical field and why. The managed care plans mostly manage money, not care, and seniors should opt for HMOs only with great caution and careful discussion with their doctors.

Needed: a cop on the beat

Finally, nowhere in Medicare reform plans do we see the funds to police Medicare adequately. The General Accounting Office concluded last summer that the Health Care Financing Administration, which runs Medicare, cannot police Medicare-HMOs. Coercing Medicare enrollees into Medicare-HMOs without a strong consumer protection plan is wrong. If you want to know how important it is to monitor and, when necessary, prosecute HMOs that serve public health insurance programs, look no further than Maryland's attorney general, J. Joseph Curran Jr. This year, he obtained more than a dozen indictments and guilty pleas against Medicaid HMO marketers who deceived poor people into joining HMOs.

If this initiative is going to proceed, there are several things that federal policy-makers must do to protect Medicare enrollees and the physicians who treat them:

* Carry out a vigorous audit and oversight program that allows federal and state law enforcement officials to audit plans and interview patients and physicians at random to spot problems, with selected cases referred for criminal as well as civil prosecution.

* Give officials the legal authority and financial resources to vigorously police plans in their states. HCFA's pathetic enforcement apparatus cannot keep up with the HMO industry.

* Require every Medicare-HMO to create a consumer oversight board made up of Medicare enrollees and physicians. The board should meet regularly, in public and with media coverage, to air out issues related to the care of Medicare enrollees in the plan. This includes hearing complaints from beneficiaries and physicians about cost pressures that may be leading to unfair treatment decisions. This will do more to keep plans honest than almost any enforcement program.

HMOs that want taxpayers' dollars, and lots of them, to care for Medicare beneficiaries are private entities fulfilling a public purpose. They should act as such and be accountable every single day for their policies. Most of what is wrong with Medicare is the result of lack of foresight and the federal government's inability to design the program properly. There is still time to come up with a solid plan for the use of HMOs. Saving Medicare dollars is important -- but it is not the most important thing. To paraphrase James Carville, it's the patient, stupid.

Vikram Khanna is the former director of the Health Education & Advocacy Unit of the state attorney general's office.

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