Managed Care Sickness
by
JC Smith, MA, DC
Sometimes I don’t know if it’s better for chiropractors to be in the medical loop or not. On one hand, it’s nice to have access to more patients by being a part of the PPO/HMO system, while on the other hand, working for peanuts with limitations and regulations is an affront to our professional self-esteem. Indeed, it seems the present managed care system places too many hurdles to jump over in our quest to help suffering patients get well.
Being out of the loop has its advantages, such as autonomy to practice however you prefer. One of the great benefits of a sole-practitioner in a mainly cash practice is the freedom to manage your patients however you deem best. Being your own boss and being the captain of your patients’ good ship chiropractic is an attraction that only we chiropractors enjoy. Just talk with our ol’ timers and they will confess that working outside the medical/insurance loop is a pleasure that seems to be gone with the wind nowadays.
But, things could be worse, and if California as the bell-weather state is any indication of our near future, things just may be bleaker than we can imagine. For instance, in the April 6 edition of The New England Journal of Medicine appears an interesting Health Policy Report by Thomas Bodenheimer, MD, titled “California’s Beleaguered Physician Groups—Will They Survive?”
Whether it’s a situation of the medics killing the golden goose, or the golden goose (PPO/HMOs) biting the hands that feed them, the situation in California has gone from bad to worse. For instance, on September 2, 1999, the California Medical Association released a highly publicized report entitled, “The Coming Medical Group Failure Epidemic.”
The report begins, “Mounting evidence collected by the CMA now points to the imminent collapse of a key element in the state’s health care delivery system…with as many as 90 percent of …physician organizations in the state poised for bankruptcy or closure.”
Dr. Bodenheimer queries, “Is the state’s managed-care marketplace headed for a meltdown?” The CMA’s report on medical bankruptcies stated that 99 of 300 physician groups had closed or filed for bankruptcy between 1996 and 1998 and predicted that at least 34 more would close in 1999.
Dr. Bodenheimer suggest the reason why physician groups are in trouble is due to “being squeezed by a combination of reduced payments and increased expenses.” So, what’s new, doc?
He illustrates the capitation system: If an employer pays a $110 premium per member per month to an HMO, the HMO reserves $17 of the premium for administrative costs and profit and spends $5 of the premium on reinsurance (protection against catastrophically expensive care) and out-of-area care. From the remaining $88 per member per month, the HMO pays $36 for hospital services, $13 for pharmacy costs, and $39 for care provided by the physician group. Of the $39, the physician group keeps $4 to cover its administrative costs and pays $12 to the primary care physicians in the group, leaving $18 for specialty care and $5 for ancillary services.
The impact on physician groups have been devastating as evidenced by two large physician-practice-management-companies. In July 1998, FPA Medical Management filed for bankruptcy, its stock having plummeted from $40 a share to $1 a share. Also in 1998, MedPartners, over $1 billion in debt, watched its tock drop from $36 a share to $4 a share.
Dr. Bodenheimer’s conclusions for this problem were quite interesting as well. “Many physicians in California believe that the financial bankruptcies of physician groups are signs of the moral bankruptcy of market-driven health care. As HMOs, hospital systems, and physician groups engage in a truly Darwinian struggle for survival, physicians are forced to face on overriding medial fact: the care provided to a tiny fraction of patients accounts for a very large percentage of hospital, pharmacy and specialty costs. For California’s physician groups, not enrolling these very sick patients can mean financial survival or even success, whereas enrolling them can spell ruin. Physicians spend years learning to care for people who are truly sick. Yet those of us practicing in California’s managed-care system now work in a market that rewards us not for providing high-quality care but for avoiding the high-cost patients who need us most.”
While I sympathize with Dr. Bodenheimer’s problems, I daresay some of his conclusions are skewed. First of all, placing blame on the “moral bankruptcy of market-driven health care” is troubling. It appears he wants to blame the demise of physician groups on the free marketplace when, in fact, it’s not a free marketplace at all. This is a private marketplace consisting of a triune of suppliers-middlemen-consumers. Apparently the deal wasn’t as profitable as the physicians had hoped, perhaps due to the fact that a medical HMO is an oxymoron.
While many medical procedures at best are early intervention, none are actually preventative in nature. Whether it’s a PSA, or mammogram, or PAP smear, or blood tests, none of these procedures actually prevent disease from occurring. Most medical methods are crisis-oriented, not wellness-oriented. In this light, invariably their patients will suffer with the inevitable chronic degenerative diseases, thus becoming the “high-cost patients who need us most” and the ones they want to avoid.
Another aspect of Dr. Bodenheimer’s conclusion that is debatable is his contention of “providing high-quality care” to patients. If medical critics are accurate, many non-emergency surgeries are unnecessary and ineffective. In regards to our specialty, back pain, the AHCPR guideline that states “Surgery has been found to be helpful in only one in 100 cases of low back problems” has been mostly ignored by physicians and hospitals. Actually, back surgeries are on an increase despite this guideline and despite the MRI studies by Drs. Boden and Jensen that have shown that disc abnormalities are not the cause of back pain.
The same can be said about most surgeries such as heart procedures. Some medical experts like Dr. Julian Whitaker believe that 98% of all bypass procedures and angioplasties could be prevented by chelation therapy using EDTA. Considering heart and back procedures are the second and third-leading procedures done in most hospitals, to decrease these costly surgeries would take a big chunk out of their pockets.
While one would think HMOs and PPOs would prefer to decrease these huge expensive surgeries to lower their overhead, just the opposite might be true. Since premiums are based on expenses, the more they pay out, the more they can charge, so there’s more money for everyone. However, in the managed-care capitation market with fixed incomes to providers, these expensive surgeries are strangling the golden goose and cutting into the profits of physician groups.
And with their inherent dislike for chelation therapy and chiropractic care which would greatly reduce these expenses, the physician groups seem to be between a rock and a hard place. Just imagine if a progressive HMO or PPO utilized chiropractors as gatekeepers for all back problems as Pran Manga suggested, the amount of real preventative medicine would result in millions of saved dollars and patients. The same can be said about saving money and patients’ lives with chelation therapy instead of invasive heart surgery.
Perhaps the beleaguered medical situation in California is a prelude for all health care in the United States. Until the government institutes a single-payer system as all other countries have done, as medical costs increase and payments to physicians are reduced, maybe the insurance executives will finally overcome their bias toward CAM and see its potential to reduce costs and increase patient care.
In this light, rather than relying on a federal government to level our playing field, perhaps the managed-care meltdown in California will be the start of a real health care reformation. If chiropractic can reposition our profession as one answer to this huge problem, maybe we will finally find our place at the healthcare table. Maybe being faster, safer, more cost and clinically-effective will finally be our trump card. After watching the medical professionals get fat by killing the golden goose, perhaps their lean times now will be the beginning of our inclusion into a system that heretofore disliked us for being too cheap.
But, what do I know? I’m just a struggling chiropractor wondering when the healthcare monopoly will finally find a profitable place for us at their table as they feast on the golden goose.