Health maintenance organizations, better known as HMOs, are
easy to hate. The charges against them are familiar: They take you
away from your old doctor. They don't let you see a specialist
without permission. They squeeze nickels until the buffalo screams.
They lust after profits. They'd make saintly old Marcus Welby turn
over in his grave.
No one is better acquainted with the complaints than
Californians, roughly half of whom are enrolled in these allegedly
money-grubbing, penny-pinching operations. As consumer activist
Harvey Rosenfeld says, "HMOs have lost their traditional commitment
to healing and caring. It's criminal what is happening."
On Nov. 5, Californians got the chance to put HMOs in their
place with two ballot initiatives, Prop. 214 and Prop. 216, which
would have established new regulations for the ostensible
protection of patients. Surprise: The voters decided they'd rather
trust the market than the government.
The outcome represents a setback for the belief that no one
ever went broke underestimating the intelligence of the American
public. Californians were inundated with horror stories about
patients who didn't get the right treatment because some HMO was
too obsessed with cutting costs - and they were offered a pair of
charming, painless solutions.
Both would have outlawed certain bonuses for employees,
prevented HMOs from imposing so-called "gag rules" on physicians
and set minimum staffing levels for health-care facilities. Prop.
216 also would have restricted premiums and levied various taxes on
providers. But the voters were not persuaded that all this
interference was necessary.
Everyone agrees that medical expenditures and insurance
premiums cannot be allowed to keep rising at the rate they have in
recent years. HMOs are the chief instrument we have found to put a
brake on costs. But whenever they take some measure to achieve this
worthy goal, howls erupt from people who liked the old way of doing
things just fine - and think money is no object. Thus, we get
measures like Prop. 214 and Prop. 216.
Grownups understand that cutting costs is not fun. It means
depriving people of things that they used to enjoy. But most of us
are accustomed to the continual obligation to forgo some
expenditures to avoid bankruptcy.
HMOs, however, are the first innovation to force such unending,
uncomfortable discipline on health-care spending. Small wonder that
they evoke complaints from both doctors, who in the past had
unfettered autonomy, and patients, who in the past could count on
getting whatever treatment they wanted without laying out much of
their own money. …