PROFIT MOTIVE?: Study Says Not-for-Profit HMOs Are Superior
"Patients enrolled in profit-making health insurance plans are significantly less likely to receive the basics of good medical care" than their counterparts in not-for-profit HMOs, according to a study published in today's Journal of the American Medical Association that has earned the ire of the insurance industry and is likely to figure into Congress' debate on HMO reform. The study, by four vocal critics of for-profit health care -- Drs. David Himmelstein and Steffie Woolhandler of Harvard Medical School, Dr. Ida Hellander of Physicians for a National Health Program and Dr. Sidney Wolfe of Public Citizen Health Research Group -- is the first head-to-head comparison of care in for-profit and non-profit health plans. It analyzed quality-of-care data collected from 248 for-profits and 81 not-for-profits across the country that provided medical care for 56% of all Americans enrolled in HMOs in 1996. The study found that compared with not-for-profit plans, for-profit HMOs scored lower on 14 quality care measures, including childhood immunizations, routine mammograms, Pap smears, prenatal care and beta-blockers treatment for heart attack patients. "The market is destroying our health care system," Himmelstein said, adding, "We have had a decade or more of policies aimed at making health care a business, and they have failed" (Stolberg, New York Times, 7/14).
The study found that in for-profit HMOs, 59.2% of heart attack patients received the recommended treatment with beta-blockers, compared with 70.6% in not-for-profit HMOs. Childhood immunization rates were 63.9% for those in for-profit plans, compared with 72.3% in not-for-profit plans. Women ages 52-69 were less likely to receive a mammogram from their for-profit plan (69.4%) than from a not-for-profit plan (75.1%) (Jeffrey, Wall Street Journal, 7/14). For women ages 21-64, Pap smear test rates within three years were 69.2% in for-profit HMOs, compared with 77.1% in not-for-profit plans. The study found that while consumer costs -- about $128 per month -- were comparable, the "for-profit groups spend 48% more than their not-for-profit counterparts on administrative overhead and far less on medical services" (Pagan Westphall, Los Angeles Times, 7/14).
Fanning the Flames
Lawmakers already embroiled in debate over patients' rights pounced on the study. Sen. Edward Kennedy (D-MA) used the study to bolster his own plan for tighter HMO regulation, saying in a statement: "This study contains strong new support for HMO reform. It is clear that profit-oriented HMOs are short-changing patients for the sake of higher profits. The quality of care is suffering, and so are patients." Representatives for the insurance agency, however, "applied an opposite spin" to the study findings. "The clear conclusion is that managed care is improving the quality of health care," said Susan Pisano, a spokesperson for the American Association of Health Plans (Saltus, Boston Globe, 7/14). For example, she said, the study found rates for prescribing beta-blockers after heart attacks in for-profit and not-for-profit plans at 59% and 70%, "while failing to note the fee-for-service rate of only 25%." The same holds true for other measures, the AAHP said, pointing to a fee-for-service mammography rate of 54%, compared to much higher rates for not-for-profit and for-profit HMOs in the study (AAHP release, 7/13). For its part, the Health Insurance Association of America said the study "leaps to [the] wrong conclusion," noting that the most important factor in improving quality care is getting physicians to adhere to guidelines, which is where HMOs have the most success (HIAA release, 7/12).
Blasting the study on another front, some insurance industry officials are questioning the authors' motives, who are "well-known advocates of a single payer national health insurance system." The AAHP noted that the authors "have long viewed managed care as a roadblock to achieving this goal" (AAHP release, 7/13). The New York Times said Himmelstein "did not dispute that he had a bias" in conducting the study. "My bias is that for-profit HMOs kill people," he said. But Eli Ginzberg, a health care economist at Columbia University, said that Himmelstein's strong views should not discredit his work. "There's no question that he has an agenda, but I think he is reading his data correctly," Ginzberg said, adding, "Let's face it, people went into the for-profit managed care business to make bucks" (7/14). Dr. Don McCanne of the Physicians for a National Health Program and the California Physicians Alliance, said, "The Wall Street corporate middleman promised us more high quality care for less money, but they delivered the opposite. We need to dump these parasites and put our resources to far better use, providing care for the tens of millions currently left out of our system" (CPA/PNHP release, 7/13).