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July 1997
HMO Makeover: Are Managed Care Efforts to Overhaul Its Image too Little, too Late?
Kertesz, Louise; Modern Health Care, May 12, 1997, vol#: 35-51.
[ no abstract available ]
Everyone is aware that the managed-care industry has an image problem, but this article helps to shed light on the specific details. For example, in a survey released by a public relations firm in 1996, only 10% of a cross-section of consumers thought the managed-care industry was "believable." This placed the managed-care sector well behind the computer/software, drug, public utilities, food manufactures, airlines, auto manufacturers, and insurance companies---and only slightly ahead of the tobacco industry!
When asked in February 1997 who is doing the best job serving consumers, physicians placed highest, with a view that 83% performed a "good job," followed by telephone, computer, drug, hospitals, banks, auto manufactures, life insurance, oil and health insurance companies. Fifty-one percent of those polled felt that managed-care companies performed a "good job" and 38% indicated a performance of a "bad job."
The results of these and similar reviews indicate that managed care companies appear to be among America's least likable industries. The industry has begun efforts to stem this problem, led by its chief trade group, the American Association of Health Plans (AAHP) to improve its standing among consumers, payers, and physicians. Much of the strategy is targeted at addressing considerable restrictive legislation following much negative publicity in 1996. Although there are claims of improvement in the managed care industry, observers question whether the efforts of the AAHP can lead to a successful outcome.
It appears that even more challenges lie ahead for the managed care industry. Many of the problems of today for the industry began with legislative action in 1996 occurring throughout the country. At that time more than 100 laws restricting managed care clinical or administrative practices were enacted during that year.
Also during that time the media portrayed HMO's as greedy organizations that deny care, resulting in patient suffering and death--all for the sake of enriching HMO executives and share holders in an industry that rakes in 6 billion dollars in revenues annually. Apparently, the industry was caught off guard by the legislative and media response.
The Group Health Association of America merged with the American Managed Care Review Association to form the AAHP in 1996. This association adopted a "philosophy of care" statement that failed to appease its critiques and was reviewed with overwhelming negativity. Probably the lowest point for the industry was a Wall Street Journal report in November of 1996 indicating that HMO's were increasingly performing mastectomies on an outpatient basis over the protest of physicians.
In contrast to earlier responses, the managed-care industry rallied quickly at this point, convening a new "AAAP Quality Committee", which adopted the position that none of their plans would require mastectomies on an outpatient basis. Only a month later, the AAHP launched its "Putting Patients First" initiative.
This was intended as an ongoing informational program for enrollees and the general public to present the various perspectives of the HMO's. A policy statement was prepared which supports patients' rights to all relative information about their health care, including the basis of utilization review decisions and how participating physicians are paid.
Additionally, the AAHP stated that its member HMO's do not prohibit any communication between patients and enrollees about their health care. The latest "Patients First Policy Statements" deal with the recommendation that health plans involve doctors in designing, directing, and monitoring quality-improvement programs, practice guidelines, utilization management and drug formularies, which all should be based on current medical information.
The "Patients First Initiative" was intentionally not promoted as a public relations tool, in an effort to reshape the managed-care industry's image, and to avoid the perception of a debate between the family doctor and the big corporation.
The question now is whether significant progress is being made in the managed care industry regarding their public perception. All indicators are that the managed care industry has collectively begun to act in concert to improve their image, but there are significant hurdles ahead. Members of congress now have drafted more than 100 new bills dealing with managed care.
Among the bills are bans on "gag clauses," incentive arrangements that limit medically-necessary devices, and requirements that health plans cover emergency services without prior authorization when a "prudent lay person" would believe his or her symptoms warrant emergency care. Serious trouble is forecasted by some for the HMO's as a result of the efforts of attorneys to file class action law suites charging fraud based on product warranty.
Much of the concern related to the viability of the HMO's seem to hinge on the success of the "Patients First Initiative." Critiques say that this is simply a result of damage control arising from a period of crises, while others indicate that this may be a means of creating meaningful industry standards which have been badly needed.
At this point, it is unclear how effective the AAHP has been addressing the adverse practices and publicity associated with HMO's. It appears that the degree to which they can respond to the true needs of patients and other consumers and establish consistent standards for the industry will determine the longevity of this industry as we know it.
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