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Doctors Agree: Managed Care Cost-Cutting is Hazardous to Your Health

By Jack H. Olender, Esq.

This article was originally published in 1996 in The Metro Herald, Washington Afro-American, The Washington Informer, and other periodicals.

Recently, the American Medical Association for the first time officially acknowledged what patients -- especially medical malpractice patients -- have long understood: When HMO's and other managed care organizations cut care to save money, The results are dangerous and sometimes deadly.

According to an American Medical Association survey released this month, 71% of physicians believe managed care plans negatively affect the quality of medical care. Ninety-two percent believe their clinical independence is impaired. Half of the doctors surveyed believe that rationed medical care -- the kind typically provided by managed care organizations -- leads to medical malpractice.

It is very significant, not to mention frightening, that a majority of doctors now believe that managed care programs, to which most Americans now belong, can be hazardous to the health of patients. Almost as startling, according to Medical Economics Magazine, a growing number of doctors are beginning to like patient lawsuits -- at least those suits against managed care organizations. These physicians hope stiff damage awards will force health plans to give back to doctors the authority to do what is necessary to care for patients.

It is no secret that HMO's and other managed care companies make more money if they provide less services. Providing less, doctors may choose not to perform necessary tests or to authorize treatments that might help the patient recover. It may mean squeezed stays in the hospital.

In order to save money, doctors also may decline to refer a patient to a specialist who has needed expertise. Some HMO's, for example, have "capitation" plans that pay a fixed amount annually for the care of each patient. If the primary physician sends the patient to a specialist, the primary physician has to pay the specialist's fee. This creates a conflict of interest for the primary physician who may be inclined to make a referral but has a financial incentive to do nothing.

The money-saving imperative to withhold care can have devastating consequences for patients. At my law firm, which represents medical malpractice victims, we see patients who are injured by HMO's that allow financial considerations to override the best interests of the patient. One client now suffers fatally advanced bowel cancer because her HMO did not conduct a simple sigmoidoscope test that would have discovered the cancer when it was still curable. In another case, a newborn baby who was sent home too soon from the hospital developed a case of jaundice that, if detected at the hospital, could have been treated before the child's brain was irreversibly damaged.

My clients' stories should serve to warn all medical consumers who belong to managed care plans. Anyone who disagrees with their doctor's course of treatment or wants additional tests should not hesitate to go through administrative channels to resolve the problem. At a time when medical institutions are increasingly preoccupied with the bottom line, it is often necessary to be assertive and persistent to get appropriate care. Those who have difficulty being assertive should ask someone they trust to act as an advocate.

To be sure, it is in the interests of both patients and health care providers to contain spiraling health care costs. But rationing medical care, the strategy of first resort of so many managed care plans, is not the solution. Rationing only will worsen the problem because it leads to more medical malpractice cases, costing companies many more dollars than are saved by doing medicine on the cheap. Good, adequate medical care is less expensive in the long run -- and allows more of us to run longer.

Washington malpractice lawyer Jack H. Olender was elected Lawyer of the Year by the D.C. Bar Association, and Trial Lawyer of the Year by the Trial Lawyers Association, D.C. He has prosecuted to a verdict or settlement more than ninety cases upwards of a million dollars each.

Copyright © 1996, Jack H. Olender

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