`INSIDER'S GUIDE' POINTS OUT PITFALLS OF HMOS.

Byline: Scott Holleran Special to the Daily News

``The Insider's Guide to HMOs''

by Alan J. Steinberg

(224 pages, Plume trade paperback; $12.95)

Our rating: Three Stars

It's the time of year when many employees must designate a health plan through their employer. These days, especially in California, that increasingly means a choice of managed-care plans, (HMOs, PPOs).

As employees line up in the lunch room for open enrollment, they may be surprised to learn that HMO rates have soared, and that, for the first time in years, they also may be eligible for a new method of financing health care; medical savings accounts, (MSAs). Santa Monica physician Alan J. Steinberg presents a solid primer on health plans, covering the basics of today's health-care system. ``The Insider's Guide to HMOs'' offers the consumer a much-needed manual for managed care.

Steinberg, a former Kaiser Permanente doctor, presents the essentials of HMOs in clear terms and submits constructive criticism, too. His is a sensible approach to the often-mangled administration of managed care. As a partner in a managed-care firm, he maintains objectivity by advising most readers against signing up with an HMO. Case histories, surveys and tables are useful in making a decision for enrollment in a health plan. He cautions patients that cheaper plans may yield cheaper care, and he encourages them to take charge of their own health-care decisions. The bottom line, according to Steinberg: ``Most people will ultimately be more satisfied with, and receive better care from, a fee-for-service plan.''

However, most employees get their health care from an employer, where choices have diminished. Steinberg advises those patients who must enroll in an HMO in how to navigate the managed-care system and ``get the health care you deserve.'' His chapter ``Getting Around Red Tape'' is particularly helpful. Managed-care patients frequently are victims of rationing when they get sick, and those who enroll in HMOs, PPOs, even point of service (POS) plans, would be wise to heed the doctor's advice.

His explanations are useful in understanding how physicians are compensated through managed care, and why that desperately matters. Health care is, after all, a matter of life and death, and his breakdown of the capitation payment system is instructive. Steinberg's point to remember about a trip to the emergency room will concern any parent of a teen-ager, or adult child of a senior: ``Gaining hospital admission through an HMO-owned ER is harder than through an ER that is not owned by an HMO.''

But the book is worth the price just for Dr. Ronald Bronow's afterword. Steinberg's colleague has written an enlightening and wonderfully simple section called ``Managing Your Own Care With an MSA.'' MSAs are used in conjunction with high-deductible health insurance and usually provide a choice of physicians. Contributions to the MSA are tax-deductible, and funds may be used for health-care expenses, including psychotherapy and chiropractic, vision, dental and orthodontic care - tax-free. Congress recently approved the new medical savings accounts, which eventually may become a decisive alternative to HMOs.

Unfortunately, ``The Insider's Guide to HMOs'' doesn't cover the history of HMOs, which would give the reader an understanding of how they came to dominate the health-care market, (more than a quarter of the American people will have HMOs by the end of the year). An explanation of how managed care proliferated through massive government intervention in health care or that Medicare's open-ended payments practically invited fraud from patients and doctors, driving medical costs up, would provide readers with critical information about how government health-care policies affect their lives.

But ``Insider's Guide'' is a worthy addition to the growing literature skeptical about HMOs. While Steinberg's tips won't save you from a gatekeeper who says no to a treatment, they could keep you from the pitfalls. Ironically, the best advice about HMOs from this insider may be to remain an outsider.