Lawsuit heats up yet another HMO controversy.

Critics claim doctor delayed tests to boost fees

The case of Simi Valley resident Joyce Ching has put health maintenance organizations on the hot seat since the middle of last year over the way their doctors practice health care.

A lawsuit filed by her family alleged that Joyce Ching's doctor delayed giving her tests that could have detected her colon cancer and led to its early treatment. As it happened, the doctor waited until three months after Ching's initial complaints before performing the diagnostic tests, and Joyce Ching ultimately died of cancer.

Critics of managed health care have cited the Ching case as a typical example of doctors attempting to maximize their own incomes by withholding care from patients. In effect, critics argue that the practice of capitation - whereby HMOs give doctors a fixed sum of money each month to care for a set group of patients makes doctors reluctant to authorize costly tests and treatments that must be paid for from their own monthly allowances.

On the other side of the coin, HMOs argue that authorizing appropriate tests and treatments for patients in a timely fashion is in doctors' best interests, since failure to do so is even costlier in the long run.

Other industry sources, meanwhile, insist the truth of the matter lies somewhere in between the two extremes.

Within urbanized areas of Southern California, nearly all HMO contracting is done with doctors' groups - often called independent practice associations or IPAs rather than with individual doctors, explained Michael Thomhill, a partner at health care law firm Ginsburg, Stephan, Oringher & Richman in Century City.

Thus a doctors group could save money if its doctors collectively and consistently withheld care from a large number of patients. Individual doctors, however, could not substantially increase their incomes by simply withholding care from their own patients.

Peer pressure

Despite their inability to realize direct personal gain through withholding care, Southern California doctors may still be motivated to prescribe insufficient care for their patients due to peer pressure from within their IPAs, according to sources.

"Doctors are now subject to peer reviews (within their groups) and peer pressure. They have to justify" to their colleagues the use of specialists and authorization of tests, explained William S. Weil, medical director of Cedars-Sinai Heath Associates, a Los Angeles-based IPA.

In the past, Weil said, many doctors overprescribed care and medical tests because they were paid as private practitioners on a fee-for-service basis. "Now, when doctors overutilize or underutilize to an extreme, (the IPA) is on their backs," said Weil, noting that extreme underutilization is also frowned upon because it potentially makes IPAs look negligent and sometimes results in missed diagnoses.

Southland doctors may be facing unprecedented pressure to rein-in their use of group resources, but equally detrimental to patient care is the generally fragmented condition of Southern California's health care delivery system, according to Tom Mayer, senior vice president of medical affairs for La Habra-based Friendly Hills HealthCare Network, a Southern California physicians' health care network.

Mayer explained that in Southern California's current health care environment, each HMO patient is often covered by numerous care provider organizations, with each provider organization working on its own capitated budget. For example, one patient might be covered by an IPA for his or her general outpatient care, several other groups for various types of specialized care, and still other organizations for inpatient care.

"With provider organizations being so fragmented, especially when each is managing its own risk, there's always potential that one piece will maximize its savings to the detriment of another piece," commented Mayer.

Measuring quality

Despite an overall consensus that care is sometimes being withheld in the name of keeping down health care costs, most sources agreed that HMOs are, for the most part, only indirectly responsible for the trend.

In fact, most Southland HMOs provide IPAs with a fixed amount of money each month to care for a given group of patients. Whatever care those patients finally receive is largely determined by the IPAs themselves, with HMOs mostly standing on the sidelines, sources said.

To change the situation, several HMOs have recently introduced a new kind of incentive, aimed at rewarding doctors groups that deliver high-quality care.

One HMO to begin such a program in recent years is Woodland Hills-based Health Net.

"Our program is a value-based incentive program that looks at the quality of service and quality of care our members get. (Doctors') groups can make a significant amount of money for themselves" through the program, said Health Net's Vice President of Medical Affairs Michael Siegel. In the past year alone, Health Net has awarded $4.1 million to California physicians and doctors' groups under its incentive program, he added.

Siegel explained that Health Net uses a number of methods to determine the quality of care being provided by doctors or doctors' groups. Some methods include sending out customer satisfaction surveys and looking at the kinds of tests doctors order for their patients.

But despite the good intentions, the quality-of-care incentives being offered by HMOs are only marginally effective in addressing the problem of inadequate care, according to Mayer of Friendly Hills. Specifically, he said, customer satisfaction surveys do not necessarily measure the quality of care being given by doctors' groups.

"The quality of medical care is very difficult to measure and document. The man in the street cannot assess the quality of the care he gets," Mayer said. "He can assess the service he gets and whether he got well. But while we can ask patients how they feel about their care, all they can really talk about is the quality of their service."

In place of satisfaction surveys, HMOs are developing a system of "outcomes measurement" to better quantify the quality of their doctors' groups, said Mayer. Outcomes measurement looks at how effective IPAs are at keeping their patients healthy over an extended period of time.

The major problem with outcomes measurement is the process' relative infancy, explained Mayer.

"Measuring quality is extremely difficult, and we don't yet have the systems to do it effectively," he said.