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November 26, 1999/17 Kislev 5760, Vol. 52, No.13
HMOs regroup to survive
CHRIS GARIFO
Staff Writer
In his recently published book, "Mostly Medical Vignettes," retired Valley Dr. Rudi Kirschner opens with a chapter about patients with headaches.
In a couple of cases mentioned, Kirschner has to call the patients' insurers to get approval for a test and a trip to the emergency room. As a result, Kirschner winds up with his own headache.
These opening vignettes are examples of the complaints leveled at managed care by doctors and patients alike over the past several years.
"I think you could say the bad apples in the (health maintenance organization) barrel are giving the whole barrel a bad name," commented Bradford Kirkman-Liff, professor of Health Administration and Policy at Arizona State University.
Today, say Valley physicians and other health care industry watchers, financially strapped HMOs that want to prosper are learning to put their focus back on quality health care.
"In the long run, the HMOs that focus on quality of care ... will be the ones that survive," Kirkman-Liff said. "The plans that continue to stay focused on the bottom line are going to lose membership."
He also said he wouldn't be surprised to see more of the sorts of mergers and consolidations of Phoenix HMOs that have been going on over the last few years, such as United Healthcare's purchase of locally-owned HealthPartners, and the sale of FHP International Inc. by PacifiCare Health Systems Inc.
One area that has received a great deal attention in the HMO business is the requirement for prior authorization from the health plan for tests and treatment, such as what caused the headaches for Kirschner and his patients. Recently, United Healthcare announced that its doctors would no longer need prior authorization.
"What United Healthcare has done is what other health plans have been doing for years with some of their physicians," Kirkman-Liff said. "They just decided to do it for all their physicians. It's part of a move to reduce the hassle factor."
Among the hassles endured with HMOs is something called the formulary - a list of prescription drugs covered by a member's benefit plan.
"You're forced to use medications on (the HMO's) formulary," Kirschner said. "You can appeal their formulary and ... most of the time they're willing ... but that takes time and, in the meantime, the patient is stuck."
Kirschner also told of a patient with a lower-spine disk problem. He wanted her to have an MRI. However, her HMO refused to authorize the examination and suggested she be seen by a neurosurgeon.
"I called the neurosurgeon, and he said he'd see her but to work her up first and have an MRI done," Kirschner recalled. "So, I went back to the HMO and said this is what the neurosurgeon wants done, and it took weeks."
Kirschner suggested that HMOs dropping prior authorization aren't as much interested in reducing the hassle factor as they are in saving themselves money.
"(The HMOs) found out that it costs more to review all (prior authorizations)," Kirschner said. "They approve 96-plus percent, and the other 3 percent wasn't worth spending the money on."
Kirschner's friend, Dr. Robert Kravetz - a retired Valley gastrointerologist - had read many of Kirsch-ner's vignettes in the Maricopa County Medical Society's newsletter and, to preserve what he considered a slice of Valley medical history, helped raise the money to get them and additional material by Kirschner published in book form. Funding for "Mostly Medical Vignettes" (Academy of Medical Sciences of Maricopa County Medical Society, hardcover, $15.95) came from the Flinn Foundation, the Academy of Medical Sciences of Maricopa County, the staff of Phoenix Baptists Hospital & Medical Center, and Baptist Hospitals & Health Systems.
Dr. Bruce Shelton, a homeopathic physician in family practice in the Valley, agreed that dealing with HMOs can at times be a hassle, but he said the horror stories about getting prior authorization "are the exceptions rather than the rule."
"I've been able to pick up the phone and get a patient into the Mayo Clinic because the patient needed it," Shelton says. "The problem is going through the levels of bureaucracy. If you can get doctor-to-doctor, you can usually convince them you were right."
Shelton noted that the proper care for a patient is usually the cheapest, too. "If a patient needs an operation, if you wait more time than you ought to, they're eventually going to need a more expensive procedure," Shelton said.
While there are some HMO denials that are a result of "seemingly bottom-line reasons," Shelton said plans that do so "are going to go out of business because the right thing is usually the cheapest thing."
Kirkman-Liff predicted that the next year will see fewer health-care plans in Phoenix, but big ones will "still do OK."
Leslie Jackson, a research analyst for the Washington, D.C.-based Center for Health System Change, noted, "There are a lot of insolvencies going on right now (across the nation)." Jackson says the managed-care industry in Phoenix is going through a period of flux, exemplified by the HealthPartners and FHP International sales, and Premier Healthcare being declared insolvent by Maricopa County Superior Court Judge Jonathan Schwartz on Nov. 16.
Premier, one of the state's few local health plans, was operating with a $4 million deficit and amassed as much as $12 million in unpaid medical bills to hospitals when it was placed into receivership. Its headquarters are in Tucson.
Kirkman-Liff said members of HMOs can expect to see the cost of their plans going up. He suggested that employers will see a 10 percent to 15 percent increase in premiums, at least part of which will be passed on to employees.
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