What you need to know about HMOs and Managed Care
Quality of American medicine is undergoing major changes. Healthcare became a hot issue in early 1990s and since then, we have seen an explosion of HMOs and Managed Care. HMO stands for Health Maintenance Organization and Managed care refers to management of your healthcare issues by some one else, other than you or your doctor.
What does all of this mean to us? How does this system work? Well, in a simple explanation, these insurance companies collect premium Dollars from individuals or their employers and in return guarantee healthcare services to the people. They get their money first and put it in the bank or invest it, and then wait until claims for healthcare services are submitted to them. Claims come from the healthcare providers such as physicians, hospitals, laboratories, pharmacies and etc. HMOs contract their work to physicians and hospitals and others who may be involved. Their contract is basically a fee and payment contract. So when you get sick, you can only see a contact physician or go to a contract hospital only. If you do otherwise, you have to pay for that cost yourself.
HMOs' existence is based on their financial profit, the difference between the money that rolls in and the money that rolls out. As you may have noticed in financial papers and other news, they have made plenty of profits recent years. This has been accomplished at a cost to those who buy into their agenda, which are the people who are on HMOs and physicians and other providers of healthcare services. Since heir appetite for profit is unlimited, they try to cut cost and increase their demand for premiums.
Cost cutting comes with reduction in quality. If you are in the market to buy a car and have $50,000 budget, you can buy a Mercedes, if you have $25,000, you can not buy a new Mercedes but you can still buy a very good Japanese car, like Toyota Camay. If your budget is $10,000, your choices will be very limited, and if your budget drops to $2,000 you have no choice but buying a used care. Same is true with HMOs. They put you in the lower end of buying power. HMOs pay your physicians significantly less than their actual fees. I drop an example here. As you know, I am a cancer specialist. More recently I received a payment of $10.80 (ten Dollars and eighty cents) for an office visit to take care of patient with Kidney cancer. My actual fee for this service is $89.00 (eighty nine.) I had my office call them and request for an explanation. We got nowhere with them. What would you do if you were in my position? Is $10.58 a reasonable payment? How would physicians respond to such payments?
HMOs reason that the doctors have to see more patients to make up for the cut in their fees. That means that I have to see 9 patients to recover my fees for one patient. My payroll expenses for three employees I have is roughly $6,000 a month, rent is $2,200. Phone is almost $500. Other expenses, like pager, answering service, supplies for the office, malpractice insurance, cleaning the office, etc. sum up to about another $2,000 a month. This is total of over $10,000 a month. at a rate of $10.58 per office visit, I have to see almost 1,000 patients a month just to cover my fixed expenses. working 5 days a week, and average 22 days a month, I have to see almost 45 patients a day. In an eight hours a day, I will have to see almost 6 patients per hour, that is giving them 10 minutes each. Now if I have to make profit and take a salary for myself, I will have to see more patients a day, that is giving them less than 10 minutes.
Well, with this simple analysis, I know that I wont be able to function and offer best care to my patients. Imagine that you come to see me and complaining of a back pain. How can I concentrate to what you have to tell me and listen to you carefully, and then examine you carefully and make a plan and implement it. After you leave, I have to write a note in your chart and pass on paper work to my billing person.
What can go wrong by seeing 50 or more patients a day by one physician ? The answer is: many things. He won't be able to focus on your problem. His goal becomes simple fixing of your problem and getting the next patient in. quality of care will go down, your problem won't be resolved, you will suffer more. He will have a higher chance of missing a major problem. And clearly, the more patients a doctor sees, the more his chances of a malpractice and mistake. After all, doctors are humans, and humans make mistakes.
How did I deal with these HMO issues? Well, I don't have the kind of practice of seeing 50 patients a day. When HMOs started to proliferate, I signed up with a few of them. Then came in mail, and almost one new application per month, from a new HMO. Due to dynamics of the area where I practice, I saw very few patients who carried such plans. More recently we started to receive payments from them. With very few exceptions, our claims for payments from them were denied the first time we submitted them. It took many months to argue and send papers to them to get paid. So far, in past two years, I have filed three law suits against such insurance companies, simply because they refuse payments for my services. And more recently I sent my letters of termination to all except two of them. This has been a trend more recently, and more physicians are terminating their contract with HMOs.
We are committed to caring for patients. We all take care of patients who have Medicaid or Medicare, despite the fact that the reimbursements by them is not that great. We do it because we feel that Medicaid and Medicare are not for profit organizations. Because they don't try to take advantage of providers of healthcare services. But HMOs are different. They try to ride the wave and make millions of Dollars in profit and pay Million Dollar salaries and bonuses to their CEOs and Presidents and yet deprive the physicians and hospitals and as a result the patients.
The HMOs have only one agenda;... Making Money.... They care less about physicians or patients. They have no interest in the healthcare and wellness of people. The only thing they care is the green back. That is why they take hefty salaries and bonuses for themselves, pay dividend to their stock holders and their stock prices go up. They make gestures of quality control, etc., but it is all about Money.