HMOs Go under the Knife: America Has Perhaps the World's Best Doctors and Medical Facilities. Its Spending on Health Care Is Lavish by World Standards. So Why Is the Quality of the Care So Uneven? and Why Do Polls Show a Rising Tide of Anger and Frustration with a Struggling System?

Newsweek, November 8, 1999 | Go to article overview

HMOs Go under the Knife: America Has Perhaps the World's Best Doctors and Medical Facilities. Its Spending on Health Care Is Lavish by World Standards. So Why Is the Quality of the Care So Uneven? and Why Do Polls Show a Rising Tide of Anger and Frustration with a Struggling System?


When he lost both of his top front teeth in a skiing accident nine years ago, Jason Wolff thought he was covered. And indeed, his dental plan paid an oral surgeon to reimplant the teeth. But five years later, Wolff learned that a lingering infection had caused severe root damage and bone loss. He endured five operations, and his bills amounted to more than $13,000. Before the first surgery, his HMO curtly warned him: dental care not covered.

Wolff, 28, who is now a third-year law student, had read his plan carefully. He knew oral surgery was covered if the need resulted from an accidental injury. He decided to press his claim. Over the span of a year, he wrote six formal appeal letters and kept careful track of the 67 phone calls he made to his HMO. Finally he was granted a hearing. But that consisted of a doctor and a nurse telling him his treatment was dental, not medical. Wolff left the meeting angry and frustrated, convinced he had lost his last chance for reimbursement. Two weeks later, he got a letter from the HMO saying it was "happy to reverse our denials and rule in your favor." Wolff got back every dollar he had spent, but the reversal baffled him as much as the rest of the process.

Is this what managed care comes down to? A decade ago, when HMOs first became a huge force in health care, signing up millions of people almost overnight, the promise was top-quality, hassle-free care--and, yes, a cap on exploding costs. Now comes the backlash. These days, too many HMO patients have experiences that are at least as painful as Wolff's. "In the end," he says, "it was nothing more than settlement through attrition."

HMOs are only the most criticized part of a health-care system caught in a weird paradox. America has perhaps the best doctors, the best hospitals and the best medical technology, and its health spending is the most lavish in the world. But the quality of care is spotty. While life expectancy keeps going up, studies show that half or more of the eligible heart-attack patients don't receive the beta blockers that could reduce their risk of another attack. A "substantial" number of cancer patients "do not receive care known to be effective for their condition," says another study. And each year, 106,000 hospital patients die from adverse drug reactions--wrong dose, wrong drug, wrong patient or wrong mix with other drugs. No wonder people are unhappy with health care. "If the present system is excellent," asks industry consultant Michael Millenson, "what would be mediocre?"

Beyond cost control, HMOs were supposed to improve care, promote preventive medicine and unleash market forces, giving consumers the ability to shape their own health plans. "It turned out to be the wrong consumers," says Dr. Paul Ellwood, who helped develop the concept of managed care and coined the term "health maintenance organization." "The power," he says, "is in the hands of purchasers--the large employers and Medicare--and they dictated what the system would look like." Too often, it looks like a contrivance that puts cost ahead of quality. "We have moved from a system where every economic incentive was to provide more services to one where all the incentives are for providing less care," says Ron Pollack, head of a consumer advocacy group called Families USA.

Not long ago, Dr. Robert J. Raniolo, a surgeon who practices in the suburbs north of New York City, operated on an elderly woman whose large intestine had been perforated by diverticulitis--a life-threatening condition. It was not an easy case; the patient had a history of stroke and coronary artery disease. But after some tricky surgery and two weeks of recuperation, she left the hospital, on the way to a full recovery. Then her HMO said it wouldn't pay the hospital for treating her. The surgery, it said, was not "appropriately pre-authorized." "That's what they do--deny, deny, deny, right from the get-go," says Raniolo. "Only one thing matters to the HMO, and that's money. …

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HMOs Go under the Knife: America Has Perhaps the World's Best Doctors and Medical Facilities. Its Spending on Health Care Is Lavish by World Standards. So Why Is the Quality of the Care So Uneven? and Why Do Polls Show a Rising Tide of Anger and Frustration with a Struggling System?
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