Los Angeles Times Opinion Pieces Weigh in on Managed Care
Two Los Angeles Times pieces last week offered opinions on the state of managed care in California. The first, an editorial by the paper, says that California HMOs are "trying hard" to undermine the power of the newly created Department of Managed Health Care and need a "strong message" from employers and the courts to "cut it out." According to the editorial, much of DMHC's power comes from its ability to require "independent medical review" -- binding decisions made by teams of medical specialists enlisted to mediate disputes over treatment denials. According to the editorial, independent review "ensure[s] good medical judgements prevail for the patient, and HMOs benefit because the panels discourage costly lawsuits." In addition, independent review sets an "informal body of 'case law,'" helping HMOs "shield themselves from future lawsuits." Although "[i]ndependent review benefits both sides," HMOs have begun fighting the process, and the editorial says that such efforts "are sure to ricochet back and hit them." According to the editorial,
"[u]ndermining independent review only strengthens the argument of trial lawyers that patients need broader state and federal rights to sue HMOs." Instead, employers -- HMOs' "chief source of income" -- and the courts should "use their clout on behalf of independent review." The editorial concludes: "Health care costs are expected to soar at four times the rate of inflation next year. The review panels might not reduce overall cost, but they would certainly keep more money in good medicine and less in litigation" (Los Angeles Times, 12/24).
In an opinion piece, Jamie Court, executive director of the Foundation for Taxpayer and Consumer Rights, says that finding "real answers" for a health system that has "given grief to all its stakeholders except the HMOs" will require "new thinking" by doctors, patients, nurses, hospitals and employers. Court offers four "solutions":
- First, "clear-cut government oversight is essential," Court says. Currently, four state agencies handle complaints about HMOs, doctors, hospitals and traditional insurers. Court says that such "scattershot regulation" creates "gaping holes that patients in need of critical care regularly fall through" and that "one public entity" must have oversight over all complaints to prevent providers and insurers from "find[ing] refuge in these gaps."
- Second, "preventive care saves money," and obstacles to such care should be eliminated. HMOs "seize[d] power" on this argument, Court says, but instead of treating patients "before their disease became expensive," managed care companies "became pennywise and pound-foolish."
- Third, "managing costs should be an overt goal of the health care system rather than a covert goal of managed care." Court adds that state approval should be required for health insurance premium increases, as it is for auto and home insurance.
- Finally, Court says that although 80% of executives surveyed this past fall said "HMOs and insurance companies" are "responsible" for "the problems in the current health care system," employers must actively participate in reform efforts.
Court concludes: "It's time to put aside the tired paradigms -- public versus private, cost versus quality, consumer versus employer -- that have frustrated reform in the past and build a better system by pragmatically solving common problems" (Court, Los Angeles Times, 12/28).
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