Health Against Wealth: HMO's and the Breakdown of Medical Trust.

Wealth

Maintenance

Organizations

My Patient was lying in the Cardiac Intensive Care Unit, connected to continuous monitors and dripping intravenous lines, but he couldn't stop thinking about his last tip.

"I carried this lady's groceries up to the third floor," he told me. "Soon I was sweating all over. My chest was killing me. I could hardly breathe. I was having a heart attack, and all she gave me was three bucks!"

My patient returned to his taxi and set off for the small community hospital that his HMO had told him to head for in case of an emergency. To get there quickly, he cut through Boston, driving past five leading health centers with state-of-the-art emergency services. Every minute counts in a heart attack, and by the time of diagnosis and treatment at the suburban hospital over an hour later, his heart muscle was irreversibly damaged.

All for a few bucks, my patient lamented, and he was right again. At just 44 years old, the father of three small children, he was a man whose heart had paid a dire price for his HMO's plan to trim the costs of emergency care.

He wasn't alone. As Wall Street Journal reporter George Anders documents in his new book, Health Against Wealth: HMOs and the Breakdown of Medical Trust, many health maintenance organizations (HMOs) and managed care organizations systematically compromise the health care of their members in order to minimize costs to employers and maximize their own profits. An engaging mix of anecdote and statistics, Health Against Wealth makes a convincing case that many Americans are being betrayed by the new health care system.

Emergency care is just one egregious example. When illness strikes, HMO members are often urged to call a special 800 number (rather than 911) and then are routed to particular hospitals chosen on the basis of price. If a member just shows up at an emergency room and receives care, she better hope the condition is serious: If not, the HMO is likely to deny payment, even if the problem was a near-miss. According to a consumer survey cited by Anders, as many as 20 percent of HMO members have not been reimbursed for their own emergency care.

Health Against Wealth reveals other systematic ways that some HMOs reduce costs but compromise quality: drastically scaling back mental health services, cutting off access to top specialists, increasing "the hassle factor" that makes it virtually impossible for a patient or provider to pursue a complaint, and making heroes of physician executives who deny patients expensive experimental care.

Revealing perhaps the most calculating tradeoff between life and profit, Anders writes about how some popular East Coast and West Coast HMOs pick their cardiac surgery centers. Even now that Medicare has begun to publish survival rates from coronary artery bypass procedures by hospital, many HMOs continue to force their patients into institutions with deadlier records (in some cases, close to twice the mortality rate) but cheaper prices.

While documenting these failures, Anders asks how the market in health care could allow them to happen. After all, managed care took off in the late 1980s to counter the grossly inefficient and expensive excesses of fee-for-service care. Rather than reward each test with a payment, employers decided to pay up front and let insurers control costs by limiting care. Early advocates of prepaid health systems pointed to well-established and effective not-for-profit health plans, including Group Health of Puget Sound and Kaiser of California.

But by the late 1980s, there was too much money on the table. For-profit HMOs that reduced health care costs for businesses reaped unprecedented dividends for their investors and had little financial incentive to maintain quality. Part of the problem was that many American workers could not switch from plans that they didn't like; a recent study showed that about half of American workers have their health plan chosen by their employers.

But an equally important problem, Anders argues, is that HMO rating systems are fundamentally flawed. Designed by the HMOs themselves, the quality measures focus on easy preventive strategies (i.e., what percentage of members get their cholesterol checked) rather than on management of serious illness. HMOs also use legal and financial incentives to keep their providers from complaining about poor quality either to patients or to the press.

Perhaps most profoundly, the market has failed to identify outright fraud in time to prevent its consequences. Anders recalls the Medicaid scandals in Florida and Tennessee, where hastily thrown-together HMOs made a mint without ensuring adequate access to care for hundreds of thousands of members. For example, he notes that in one Tennessee town, the two main Medicaid HMOs refused to pay for antibiotics necessary to stop a raging epidemic of childhood dysentery until public health authorities intervened. In addition, overzealous HMO marketers in several states have been charged with mail fraud, intimidation, bribery, and forgery in their attempts to sign up Medicaid clients.

Anders's solution is regulation, oversight, and vigilance. In his ideal world, consumers (and their lawyers) challenge HMO decisions at every turn, doctors speak out against abuses, legislators rein in the most outrageous practices, and regulators publish better report cards.

But in a book devoted to the threat of profit-driven managed care, these prescriptions are little more than a dignified surrender. Consumers always should be on the lookout for poor care, but expecting them to do so during their most vulnerable moments is a cruel system of quality control. Legal threats are also unreliable; the best evidence indicates that about 2 percent of true medical negligence leads to a lawsuit, and about 80 percent of lawsuits have no basis in medical fact. What's more, legislators are sure to focus on the most politically engaging HMO practices (such as "drive through" deliveries and mastectomies) while leaving the remaining 99 percent of medical practice untouched. Regulation to reduce financial and legal pressure on physicians and improve reporting would undoubtedly help; unfortunately, relying on this course of action to obtain good measures of care for seriously ill individuals could take years.

Anders doesn't address what Health Against Wealth convincingly demonstrates is the root cause of much poor care: health plans beholden to employers and to profit. The clear solutions are for individuals rather than employers to choose their doctors and health plans (either through Clinton-style managed competition or, preferably, through a single-payer system) and for Congress to bar investor-owned managed care companies from the market. Despite the massive growth of for-profit managed care companies, when Consumer Reports rated the nation's top 10 health systems, all 10 were not-for-profit.

I'll never forget sitting in a first-year medical school class listening to a heart-rending story from a man whose son nearly died of the eye tumor retinoblastoma. Had his boy been in an HMO, the man speculated, the diagnosis might not have been caught in time. A student then asked how the father had explained the long hospitalization to his employer. "Actually, I'm self-employed as an investment advisor," the man said, adding "if any of you have any extra cash, buy HMO stocks. They are hot." Until this nation changes course, we all will have to live with this irony.

Joshua Sharfstein is a first-year resident in pediatrics at Boston Medical Center and Boston Children's Hospital.