[Congressional Record Volume 140, Number 58 (Thursday, May 12, 1994)]
[House]
[Page H]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]


[Congressional Record: May 12, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]

 
                      THE MEANING OF MANAGED CARE

  The SPEAKER pro tempore. Under the Speaker's announced policy of 
February 11, 1994, the gentleman from Washington [Mr. McDermott] is 
recognized for 60 minutes as the majority leader's designee.
  Mr. McDERMOTT. Mr. Speaker, as part of my effort to talk to my 
colleagues each week about how health care reform issues affect the 
American people personally, I would like to talk tonight about managed 
care.
  The meaning of managed care is changing even as we speak. So I want 
to talk to the American people tonight about their relationships with 
their doctors--and about who should make medical treatment decisions.
  What managed care meant 20 or 10 or even 5 years ago is very 
different from what it is coming to mean today--even without one word 
of legislation.
  It is different from the traditional notion of community-based 
nonprofit providers who coordinate and oversee the care of their 
patients.
  Before 10 years ago non-profit H.M.O.'s for per capita fee agreed to 
provide all the care for individuals. H.M.O. took the risk of managing 
the care of patients for a fixed fee.
  The advent of for-profit managed care operators has changed by this, 
this change is happening today as the market is left to its own devices 
to solve the health care cost crisis. A recent article in the May 16th 
edition of the Nation has an interesting description of managed care 
which I include, as follows:

                    [From the Nation, May 16, 1994]

             Playing the Denial Game: The Managed Care Scam

           (By Suzanne Gordon and Judith Shindul-Rothschild)

       When Ruth Trotman talks about her daughter Robin's 
     condition she can barely contain her despair. Her 19-year-old 
     is suicidal because of a very rare and difficult to treat 
     mental illness--obsessive-compulsive disorder (O.C.D.). Robin 
     is terrified of germs and washes her hands until they are 
     raw; she is often so fearful that her mother cannot even 
     leave her side, and she is totally consumed by thoughts about 
     God and His punishment.
       Unfortunately, Robin also suffers from a new health care 
     disorder--managed care. She is insured by Bay State Health 
     Care, one of Massachusetts' biggest managed care companies. 
     When trying to lure subscribers, Bay State says that patients 
     will have ``thousands of physicians to choose from.'' Trot-
     man says Bay State told her Robin could be treated out of its 
     network of providers and hospitals if it was medically 
     necessary. Although there seems to be no dispute about the 
     fact that Trotman's daughter needs hospitalization, there is 
     intense disagreement about where. Bay State refuses to allow 
     her to be hospitalized at McLean's, a prestigious psychiatric 
     facility that has the only O.C.D. in-patient unit in the 
     state. Instead, Bay State insists Robin be hospitalized at 
     Fuller Memorial Hospital--a small community hospital in 
     Attleboro that lacks such a specialized program.
       Fuller does have one distinct advantage--to Bay State, that 
     is. To attract a managed care contract in psychiatry it 
     provides discounted services to Bay State. Despite Trotman's 
     efforts, including a lengthy appeal through Bay State 
     internal channels, contacts with an attorney and her 
     political representatives, the insurance company has not 
     budged.
       ``There are nights when I stay up cradling Robin in my arms 
     because she can't stop crying,'' the anguished mother 
     recounts. ``She says she can't stand to go on living this 
     way. What's so terrible is that there's help for her and Bay 
     State won't let her get it. No one can cure her, but they can 
     help her to live with O.C.D.''
       While Ruth Trotman was trying to save her daughter's life, 
     another Massachusetts woman was trying to deal with a less 
     critical but still troublesome health problem--an 
     immobilizing tendinitis in her right shoulder. She went to an 
     orthopedic specialist, who recommended course of anti-
     inflammatory drugs and physical therapy. The woman's 
     insurance company required her to get prior authorization 
     for physical therapy, so she called the number indicated 
     and reached a nurse sitting behind a video display 
     terminal in Washington, D.C. The nurse informed her that 
     her insurer would not allow her to make a physical therapy 
     appointment before she finished a two-week course of anti-
     inflammatories. When the woman reminded the nurse of anti-
     inflammatories. When the woman reminded the nurse that she 
     was only following her doctor's orders, the nurse 
     responded, ``This is company policy.''
       When the woman arrived in the physical therapist's office 
     after the two-week drug course, the clinician was shocked at 
     the state of her arm. ``Why have you waited so long to come 
     to me?'' she said. ``You should have come much sooner.''
       Then there's the case of the elderly California woman 
     drying of multiple myeloma--a cancer of the bone marrow. She 
     had been seeing an oncologist before her health plan switched 
     to managed care. Once that happened, she was told she had to 
     pick a primary care physician from an approved list who would 
     then refer her to an oncologist approved by the plan. Her new 
     primary care physician agreed to allow her to continue with 
     her oncologist, who was not part of the plan, but only on one 
     condition: Before each oncology visit she had to appear at 
     his office to be handed a signal permission slip to set the 
     specialist. The primary care physician billed the health 
     management organization $85 for each slip. This went on for 
     three months, until the woman became eligible for Medicare. 
     ``To have to deal with fighting for care while you're dying 
     is cruel,'' she said.
       Such experiences are becoming the norm in American health 
     care. President Clinton's American Health Security Act may be 
     in trouble in Congress, but its grounding philosophy--managed 
     competition and managed care--is alive and well. 
     Representative Jim Cooper's bill and all the Republican 
     health care proposals endorse managed care's central tenets--
     that the way to cut costs is to discipline patients and give 
     insurance companies the responsibility for policing medical 
     practice and patient behavior. Most important, managed care 
     has become the darling of employers, who believe it will save 
     them money. As Barron's recently put it, ``employers are 
     already switching an masse from traditional insurance plans 
     to `managed care.'''
       Americans traditionally equate access to health 
     insurance with access to health care providers and 
     reimbursement for their treatments and services. With 
     managed care--a byzantine system in which insurers and 
     employers herd patients and families into health 
     maintenance organizations (H.M.O.s) or networks of 
     approved physicians and other providers and hospitals, all 
     competing against one another to provide the cheapest 
     services--this equation can no longer be taken for 
     granted.
       Managed care does not guarantee access to health care. It 
     merely assures access to what we call ``the denial game.'' 
     This is an elaborately choreographed dance of come-hither 
     advertising designed to attract subscribers, followed by a 
     series of rules and rejections that get in the way when a 
     patient actually seeks services. The main goal of the denial 
     game is to maintain the profitability of some of the most 
     lucrative corporations in America today--for-profit H.M.O.s 
     and managed care companies that earn profits of up to 20 
     percent annually. They achieve this goal by three primary 
     mechanisms:
       The denial of free choice of doctor and hospital and the 
     substitution of a select group of providers who are generally 
     chosen by the criteria of cost and their willingness to 
     follow a managed care plan's guidelines on which services are 
     appropriate and when.
       The erection of rigid barriers to access, which are applied 
     to all enrollees regardless of how much or how little they 
     may, in fact, use the system.
       The bureaucratic micromanagement of care by a group of what 
     we call ``invisible diagnosticians''--nurses and physicians 
     who never examine patients but nonetheless decide the course 
     of their treatment.
       Consider the impact of the first principle--the denial of 
     choice. The requirement that patients may go only to members 
     of a closed panel of primary care physicians or specialists, 
     the bedrock of managed care, pits clinician against clinician 
     to discount services.
       Here's how it works: Every year physicians on the panel get 
     a report card that grades them according to how much they 
     saved or cost the managed care company in providing patient 
     care. If your primary care physician or specialist is at the 
     top of the list--spending more money than his or her peers on 
     patient care or advocating too aggressively for patients--
     that doctor will be dropped from the panel and you'll have to 
     switch to a more ``cost-effective'' or more tractable 
     provider. Provider report cards are not based on quality 
     indicators, like complications, re-admissions, suicide or 
     mortality rates. Clinicians are judged solely by their 
     contribution to the corporate bottom-line.
       In their effort to obtain cut-rate care, managed care plans 
     also negotiate deep discounts with hospitals. Because managed 
     care groups seek to negotiate the least costly services from 
     year to year, subscribers may be forced to change physicians, 
     nurses and hospitals frequently. Last fall in Massachusetts, 
     Pilgrim Health Care decided to end its $10 million managed 
     care contract with Tufts New England Medical Center and 
     informed patients they would have to switch to another 
     hospital. After eight years, Harvard Community Health Plan 
     declined to renew its pediatrics contract with Massachusetts 
     General Hospital and instead diverted its patients to 
     Children's Hospital.
       This kind of hospital and clinician hopping encourages 
     discontinuities of care. ``Competition addicts think that 
     health care is a machine assembled with interchangeable 
     parts. They're wrong,'' says Alan Sager of Boston University 
     School of Public Health's Access and Affordability Monitoring 
     Project. ``Health care is an ecology, in which different 
     organisms often have symbiotic relationships with one 
     another. The patient-clinician relationship is dangerous to 
     uproot, and hard to re-establish. Market forces act like 
     tornadoes, destructively tossing around hospitals, their 
     patients and their staff.''
       These restrictive policies not only inhibit patients, they 
     severely restrict providers. A prominent Boston physician 
     explained that ``if a patient of mine needs a particularly 
     tricky operation, I know there are three or four excellent 
     surgeons in town to whom I can refer the patient. But many 
     insurance companies now force me to refer the patient to 
     surgeons that I know may botch the job.''
       Physicians and nurses who want to prescribe a particular 
     drug or treatment may not be able to do so because their 
     patient's managed care company will pay for drug A but not 
     drug B. ``I had a kid with recurrent ear infections, so I 
     prescribed a stronger antibiotic at the bottom of the 
     H.M.O.'s list, which happened to be the most expensive,'' one 
     frustrated physician said. ``The next thing I knew, the 
     mother of the patient is calling me from home saying that 
     some anonymous reviewer from the H.M.O.--who had never laid 
     eyes on the kid--called and told her I should have prescribed 
     the cheaper antibiotic. She was told that if she wanted the 
     one I prescribed, she would have to pay for it herself. So I 
     have to fight with the insurer to get the kid the medicine he 
     needs. What an incredible waste of time. Just give me the 
     list of the least expensive drugs and I'll prescribe them 
     when appropriate. Don't second-guess my clinical judgment.''
       Limiting choice--and thus real quality competition among 
     providers--is only the beginning of the denial game. Next 
     comes restricting the availability of this narrowed range of 
     providers.

                           *   *   *   *   *

       ``We have a structure for providing medical care in this 
     country. What insurers have created is a shadow structure,'' 
     says Woolhandler. ``For every action a physician or nurse 
     takes, there is a paper construction reflecting it and a 
     person reviewing it. Everything is done twice--by me and by 
     my shadow. These shadows follow computer protocols that are 
     kept secret. They won't tell us why they are denying needed 
     care, they just say the protocol says no. If I see a patient 
     who I think has a retinal detachment that can lead to 
     blindness, and I say she needs to see an ophthalmologist, and 
     the shadow says no she doesn't, that shadow is not legally 
     liable. But I am. These people are entirely out of the loop 
     of accountability and quality.''
       The role of these new, invisible diagnosticians makes a 
     mockery of managed care advocates' rhetorical pronouncements 
     about quality care, consumer choice and the potential of 
     consumer education--all touted features of the Clinton plan. 
     How can patients and families learn how to navigate a health 
     care system in which the real decision-makers are completely 
     insulated from public scrutiny and patient criticism? What 
     good is consumer information about a hospital or physician or 
     other provider, when neither that institution nor that 
     individual provider is really the one pulling the most 
     important health care levers? What good does it do to 
     increase the number of primary care providers, if those 
     providers are simply viewed as servants of managed care 
     companies?
       The final irony of managed care is that it raises, rather 
     than lowers, health care costs, as studies by numerous 
     government agencies and health care researchers have shown. 
     Managed care groups have higher administrative overhead than 
     did Medicare or traditional indemnity plans like Blue Cross 
     ten or twenty years ago. Managed car companies spend huge 
     sums on advertising and marketing, and on paying utilization 
     reviewers to micromanage each case. In order to amass the 
     profits necessary to pay executive salaries in the seven 
     figures, enrich stockholders and offer bonuses to elite 
     physician providers--some of whom now receive year-end perks 
     based on the amount of care and treatment they denied--
     managed care companies must cut labor costs, increase 
     provider productivity by enforcing assembly-line conditions 
     and skimp on the care and treatment they make available to 
     patients.
       Over and over Washington politicians insist that Americans 
     must be willing to make sacrifices and tough choices to solve 
     the nation's health crisis. But it is politicians, not 
     patients and their families, who need to make them. Our 
     health care crisis will be solved only when government 
     leaders are willing to set global budgets, negotiate fee 
     scales for physicians, rein in drug company costs and fairly 
     and democratically ration expensive medical technology, as is 
     done in every other industrialized country. Not surprisingly, 
     politicians, who would rather avoid the accountability for 
     such tough decisions, are attracted to a free-market approach 
     (not to mention free-market dollars). But substituting the 
     invisible hand of the market for the visible courage of 
     political leadership is the wrong prescription.
       Study after study--as well as the experience of governments 
     in Europe and Canada--has documented that a single-payer 
     financial reimbursement mechanism is the only way to save 
     money and increase access while maintaining quality and 
     continuity of care. As patients are learning every day, 
     managed care, on the other hand, does little but manage the 
     care right our of out health system.
  And that means that insurance companies interfere more and more 
aggressively in the treatment decisions of doctors. They do this not to 
protect the patient's quality of care, but to protect profit margins 
for their stockholders.
  This is happening not just in HMOs. All patients are experiencing the 
reality that it is their insurance company, not their doctor, who 
determines whether or not they are admitted to a hospital.
  It is their insurance company who decides if a child can stay in the 
hospital overnight after a bad reaction to surgery.
  It is their insurance company who is deciding that women should be 
discharged from the hospital on the same day as childbirth, or that 
newborns should be sent home before their first feeding.
  These decisions are not being made by the physicians or nurses or 
other practitioners who actually care for patients and bear the 
responsibility for their well-being.
  They are being made by company employees who never see the patient 
but are sitting at a 1-800 number just to approve or disapprove care.
  The American people know in the hearts, in their guts, and in their 
minds that something is terribly wrong with this arrangement.
  They know that this cost-control approach by the insurance companies 
ultimately will ruin the quality of American health care.
  And I want to be clear, It is not the Government that is doing this. 
It is the free market approach to health care that is giving the 
insurance companies unprecedented control over the doctor-patient 
relationship.
  I am getting a lot of mail and hearing a lot of stories from 
constituents about the effects of managed care on people's lives. I 
want to share these with you because I know you will understand 
immediately what I am talking about.
  One mother told me about her 4-year-old daughter who had to have a 
tonsillectomy after months of chronic infection and enlargement.
  After the surgery, the child's blood pressure did not stabilize, the 
intravenous fluids could not be disconnected, and the child was 
vomiting blood.
  The surgeon, appropriately, and all the nurses attending the child 
determined that the little girl needed to be admitted for one night to 
be stabilized and treated after surgery. The insurance company would 
not consent to the admission.
  Fortunately, the surgeon felt strongly enough about the need for the 
child to stay in the hospital, that he was willing to spend 2 hours 
continuously on the phone with an insurance clerk in another State to 
convince them to consent to the admission.
  Two hours of a doctor's time defending a decision that was 
unquestionable. Two hours that could have been spent caring for 
patients. Two hours just to protect a patient from her own insurance 
company.
  Why? Because the insurance company had a policy that tonsillectomy is 
an outpatient procedure--a rule that I doubt the American Academy of 
Pediatrics or the surgeons, or any parent who has been through it, 
would agree with.
  And even if the policy were justified in general, which it is not, 
the surgeon caring for and responsible for this child said, ``this 
child is too sick to go home, she is not stabilizing.'' Should not that 
have been enough?
  Then there is the case of Mr. Howard Silver. Mr. Silver developed 
prostate cancer in Florida. Prostate cancer is the most common form of 
cancer in men. There are two ways to prevent the recurrence of prostate 
cancer once it is initially treated.
  The first way is to take medication that will inhibit recurrence. It 
is expensive. It costs about $4,000 a year, but it enables men to lead 
relatively normal lives and keeps the disease in remission.
  The other way is castration. This costs only about $2,000, and of 
course is a one-time expense. His HMO would agree only to pay for the 
castration, not the medication.
  Mr. Silver fought the decision of his HMO in court and won. Why did 
he have to go through this?
  His insurance company decided to substitute its judgment for his 
doctor's and his. I want to emphasize again that it is not Government 
that is doing this. It is the free market that is giving insurance 
companies this control.
  No democratic government that had to face elections would dream of 
trying to get away with these kinds of practices.
  Indeed, one of the most ominous recent developments was the 
announcement on March 22 that Travelers Insurance Company and 
Metropolitan Life are entering negotiations to merge their health care 
operations. Where are the patients and providers in this merger?
  I am a physician as well as a Congressman. I practiced medicine for 
25 years. To me, just as the family is the building block of 
civilization, so is the physician-patient relationship the building 
block to good medical care. That is why I support single-payer health 
reform. Because it is the only mechanism that will preserve the 
patient-doctor relationship.
  In single-payer systems throughout the world, patients choose their 
own doctors, and physicians do not have to justify individual treatment 
decisions to insurance companies or to the Government.
  They do not have to seek permission in advance for the treatment they 
and their patients have chosen.
  In fact, in the single-payer bill I have coauthored, the American 
Health Security Act, interfering in treatment decisions is expressly 
prohibited.
  We are the only country in the world that permits interference in the 
relationships between patients and doctors--and to what end?
  It has not controlled costs, it has not improved quality, it has not 
made life better for patients or doctors.
  When the American College of Surgeons endorsed single-payer as its 
choice for health reform, it did so because it recognized that doctors 
cannot continue to tolerate insurance company interference in their 
decisions if they want to practice good medicine.
  The Government Accounting Office just completed a study on the 
availability of bone marrow transplants in the United States compared 
to other countries.
  The study looked at both the availability of transplants and whether 
they were done at the best time for the best result in the patient.
  It concluded that the United States ranked 7th--behind six single-
payer countries--in both availability and timing or appropriateness for 
these transplants.
  The GAO also testified at the hearing on its report that what 
differentiated these countries' medical practice from the United States 
was the amount of interference in U.S. doctors' treatment decisions.
  In single-payer systems, the doctors made the decisions and were not 
second-guessed by insurance companies or Government.
  Mr. Speaker, single-payer health care reform will do four things for 
the people of the United States.
  It will guarantee your coverage, it will let you choose your own 
doctors, it will preserve your relationships with your doctors, and it 
will cost less because it will eliminate insurance company 
administrative overhead and profit from your health care bill.
  Mr. Speaker, it is my hope that the American people will call their 
Members of Congress and tell them they want single-payer. It is time to 
take the insurance companies out of the practice of medicine.

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