10 Things Your HMO Doctor Won't Tell You
ROSEMARY DUDLEY TRUSTED her HMO doctor. After all, she worked in his office as his nurse. So, in late 1997, when he told her a CAT scan showed no recurrence of the cancer she'd battled for two years, she believed him.
And she wasn't surprised when he insisted that a referral to a cancer specialist for the knot on her jaw wasn't necessary. Her health maintenance organization paid him thousands in bonuses for holding the line on such costs.
About four months later, Dudley came to know something else. Her cancer had returned, crawling beneath the skin on her face. A January 1998 CAT scan — ordered by another physician — showed it had moved to her lungs and to the bones in her ribs, hips and legs. It was terminal.
Two years later, the 67-year-old Texas woman decided to sue her doctor and former employer — who testified that the reason he didn't like referring to the oncologist was because she interfered with his patients' care. Dudley, along with a separate group of patients and a group of Fort Worth-area physicians, also sued the HMO that offered docs the financial incentives, Harris Methodist Health Plan. Harris paid almost $6 million to settle those two class-action suits, plus resolved Dudley's case in an undisclosed settlement. Meanwhile, the Texas Department of Insurance fined Harris $100,000, citing a state law banning financial incentives that provide an inducement to limit necessary care. It ordered the HMO to pay another $3.4 million to doctors financially penalized under the plan. While it's generally difficult to sue HMOs for malpractice, the cases against Harris instead focused on treatment incentives and disincentives, which can be illegal under Texas law.
Also in 2000, ruling in another case, the U.S. Supreme Court said such incentives don't violate an HMO's fiduciary duty under federal law. "In an HMO system, a physician's financial interest lies in providing less care, not more," Supreme Court Justice David Souter said. "No HMO organization could survive without some incentive connecting physician reward with treatment rationing."
That ruling calls into question the various laws against incentives and disincentives in Texas and 22 other states. It also raises the issue: If such incentives are legal, how could they affect your care?
Following are some things your doctor won't tell you as you sit across from him on the examining table, backside to the breeze. He may not even admit them to himself — or if you're lucky enough to have a conscientious doctor, they may not matter much. Not every HMO uses all these measures to pressure docs into limiting care. But you can bet the contract your doctor signed with your HMO contains a few.
1. "If I order expensive treatments for you, the cost might come out of my pocket."
In the Texas case, Harris ranked physicians based on how much their patients cost the HMO. It then withheld up to 50% of the base pay of doctors who ordered a lot of care, with the holdback dangled as an incentive to get their numbers in line. Otherwise, they'd lose the money. Plus, doctors who prescribed more than a set limit for drugs had to make up as much as 35% of the excess, deducted from their pay.
2. "On the other hand, if I order up less care, your HMO might send me a bonus check."
Cynthia Herdrich, the Illinois patient in the Supreme Court case, waited 14 days after going to her HMO doctor for pain in her groin before getting the expensive test that diagnosed her problem. Unfortunately, by then her appendix had burst, infecting her abdominal cavity. After finding out that her HMO gave year-end bonuses to doctors who, among other things, economized on the use of diagnostic tests, she sued it, claiming it had violated its fiduciary duty to her as a patient. The Supreme Court held that an HMO's fiduciary duty doesn't stretch that far under federal law.
3. "That cheap HMO you signed up for pays me only $8, or maybe $10 to $12 a month to treat you, so I hope you don't come around too often."
Under a system called capitation, many HMOs pay primary-care doctors a set amount per month for each patient assigned to them. Even that amount can drop if a doctor orders too many expensive referrals or hospital stays. So, sick patients become a financial burden.
Just ask Dr. Beatrice Murray, a pediatrician in Grand Rapids, Mich. She got a good reputation for treating the many problems of children born prematurely. That's what put her out of business.
"The number of our special needs cases just exploded," she explains. But the monthly stipend from the HMOs didn't. The amount varied by the child's age and the HMO contract, but for a two-year-old, she says she usually got $6 to $9 a month. Which might be fine if the child was healthy. Her patients weren't.
Dr. Murray says she tried to explain to the HMOs, but they seemed all too willing to lose her and her patients. The 52-year-old doctor lost her private practice this past May. She's now a salaried employee for a federally funded clinic for the poor.
4. "If you become too much of a financial drain, I have ways to make you walk."
Some doctors head off the problem by saying they don't treat a certain type of (read expensive) patient. Dr. Murray recalls the mothers who brought their triplets to her, complaining they couldn't find another pediatrician who treated multiples.
But sometimes the doctor already has a patient before he develops diabetes or cancer, or contracts AIDS. For those situations, there's "turf and surf," says a Texas lawyer representing seven patients who claim their health-care group discriminated against them because of their disabilities — illnesses like cancer, rheumatoid arthritis and heart problems. Doctors use tactics to grind unwanted patients into the turf, then surf them out to other doctors, says attorney Robert J. Provan, himself disabled from a bout with polio at age five.
In a lawsuit and separate complaint to the U.S. Department of Justice, Provan's clients say they were left alone in exam rooms for more than an hour, forced to come to the office to pick up prescriptions that had been phoned in to their pharmacists before and made to wait inordinately long periods to get an appointment. The San Antonio clinic involved denies their claims, as well as those of a former doctor who's also a plaintiff in the case. The doctor alleges the medical group fired him because he attracted disabled patients, then refused to cut corners on their care. Which brings us to...
5. "If I treat you too aggressively, I could get kicked out of the HMO."
Those contracts doctors sign with HMOs expire every one or two years. Plus, many have clauses allowing the HMO to terminate them without cause. A doctor with many contracts doesn't have to worry about losing one. But in areas where one HMO is dominant, a physician can watch his practice — and income — shrivel if the HMO deselects him.
. "HMOs have sophisticated computer programs that let them track exactly how much my patient care is costing them. And they let me know."
Many doctors receive monthly report cards from HMOs they do business with, pointing out how much care they ordered for each patient, or spent for hospital stays, tests and specialists. Those who rack up more than the average — or more than some predetermined target — may get a call from the HMO. Or maybe they'll get pinched by the methods described above.
7. "Ordering expensive treatments for you could tie me and my staff up on the phone for hours with your HMO to get approval."
Dr. Linda Peeno used to be on the receiving end of such calls. Working as a medical reviewer for giant Humana, she admits she looked for reasons to reject coverage. After years of turning down treatments — including a heart transplant for a Nevada man who later died — she now works as head ethics consultant at the University of Louisville Hospital and as a paid consultant for David Boies, a lawyer better known for representing the government in its antitrust suit against Microsoft, but who's fast gaining a reputation for suing HMOs as well.
Dr. Peeno remembers the early days of HMOs when doctors "would rant and rave and call me names. They were much more strongly patient advocates than they are now," she says. Docs "became slowly compliant out of fatigue and utility."
8. "You might rate less of my time if you're with one of those penny-pinching HMOs."
Kenna Nevill, a 45-year-old Dallas woman, remembers asking her doctor to call her after office hours with a test result she was worried about, and being struck by his response. "He said, 'You know, I wouldn't do that for my HMO patients. But I'll do it for you.'" She had recently switched from an HMO to a PPO, or preferred provider organization. "I remember feeling like a second-class patient with an HMO."
How conscious is your doctor of the kind of medical coverage you have when he sits across from you? The Texas doctor who treated Dudley said each of his patients' charts had a large stamp on the front indicating HMO, PPO or old-fashioned indemnity-type coverage.
9. "The drug I prescribe may not be the best one for you — but it's what your HMO will cover."
HMOs give doctors lists of the drugs they want used. And those lists can change in the middle of a patient's treatment, says Dr. Joe Cunningham, an internist in Waco, Texas.
That can mean a drug that's working might be replaced by one that won't, at least until the HMO can be convinced the more expensive medication is necessary. While this may not pose much of a problem for most patients, for those with life-threatening conditions — like seizures — it's potentially fatal, says Dr. Cunningham.
10. "If you have to go to the hospital, I may turn your care over to a doctor who works directly for the HMO."
The use of doctors called hospitalists to manage patients once they're in the hospital began in the early '90s, says Dr. Peeno. These specialists have even more incentive to deny you admission or hustle you out. They're on the payroll of the HMO and, explains Peeno, "It doesn't take anybody with much sense to figure out where the incentives are there."
Of course, it's naive to think that health care has ever been free of financial considerations. Under the old fee-for-service system, doctors had an incentive to provide more — perhaps harmful — care, says Dr. Charles M. Cutler, chief medical officer with the American Association of Health Plans, a trade organization representing managed-care plans. HMO incentives, he argues, are designed to "encourage physicians to think more critically about what it is that we do and to avoid waste — not to limit care."
Adds Dr. Thomas Reardon, past president of the American Medical Association, "I think a doctor generally does what is right for the patient and if it hurts his income, he just absorbs that."
But Dr. Cunningham, who worked on a Texas task force that studied such incentives, isn't sure that is always the case. "You don't want to walk in as a patient to a physician who is thinking, 'You know, I've spent all my allocation for this month.'"
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