Cancer is one of the most expensive and time-consuming illnesses to treat and that's a bad combination when it comes to managed care.

The tremendous cost associated with cancer treatment means that conflicts between doctors, patients and health maintenance organizations struggling to rein in costs are almost inevitable.

And in Los Angeles, perhaps the nation's capital of managed care, these conflicts have often been played out in court.

Horror stories about companies refusing to pay for "experimental" cancer treatments have helped foster a widespread view that HMOs are so focused on cost control that they can be hazardous to a patient's health.

But public health experts say it's not clear if managed care is worse or better for cancer patients than the old system of reimbursing providers when there was little or no second-guessing for services rendered.

"To me, it's not all white or black," UCLA Medical Center Director Michael Karpf said of managed care's record. HMOs "got into trouble in the past when the standards weren't clear," he said, but "for the most part, managed care organizations do a reasonable job."

Dr. Katherine Kahn, a professor of medicine at UCLA and a senior scientist at Rand Corp., says any mode of health care should be judged across the spectrum of care. That covers issues like timely diagnosis, appropriate treatment, follow-through after treatment and even hospice care. "My own view is that we really don't know yet" how managed care measures up, Kahn said, "and we won't know for several years."

Nonetheless, there is a distinctly negative attitude toward managed care among the public, particularly when it comes to the way HMOs treat cancer. Much of that attitude has been fueled by lawsuits or judgments from regulators.

In 1993, a jury returned a verdict of $89.1 million against Health Net (now part of Woodland Hills-based Foundation Health Systems Inc.) for refusing to fund a bone-marrow transplant to treat a patient's breast cancer (the case was later settled for a smaller amount). In 1996, the state Department of Corporations fined TakeCare since then acquired $500,000 for refusing to pay for outside surgeons who treated a 9-year-old Bay Area girl for a rare form of kidney cancer.

Cancer also figured in a malpractice case that led to stinging criticism from the state Supreme Court last year against Kaiser Permanente, the nation's largest HMO. The court said Kaiser had used its binding arbitration system to delay consideration of a claim that its doctors had misdiagnosed a patient's lung cancer. Kaiser has since agreed to speed up its arbitration process and put it under an independent administrator.

But are HMOs as bad as many Californians think?

In one area, the fight against breast cancer, managed care gets at least a passing grade in a study led by Dr. Arnold Potosky of the National Cancer Institute. Looking at the treatment outcomes for 13,358 women aged 65 or older with breast cancer, the study published last year in the NCI Journal said the long-term survival of those in two HMOs were "at least equal to, and possibly better than, outcomes in the fee-for-service system."

It's not clear if these results would hold true for Southern California patients, since the two HMOs studied were Kaiser Permanente of Northern California and the Group Health Cooperative of Puget Sound. In an editorial in the same issue of the NCI Journal, Dr. Sheldon M. Retchin of Virginia Commonwealth University warned against reading too much into the study. "The aphorism, ' if you've seen one HMO, you've seen one HMO ' clearly holds true," he wrote. "No two health plans are alike. Local market characteristics and attributes of the health plans themselves are extremely influential variables in the quality of health care delivered by these systems."

Oxnard attorney Mark Hiepler has been watching the Southern California HMO market for some time as an adversary to local managed care companies. He brought the case on behalf of his late sister, Nelene Fox, that led to the $89.5 million judgment against Health Net, and he has been taking on the HMOs ever since.

But even Hiepler sees change for the better in the treatment of breast cancer. The bone-marrow transplant denied his sister in the early '90s because of cost $150,000 at the time is now much cheaper and almost always covered by health plans. In this area, he said, "I haven't seen a denial in years."

Health Net, the state's third-largest HMO, says it funded 207 requests for bone-marrow and other organ transplants last year and turned down only four. From 1993 to 1997, it has approved 95 percent of such requests.

Hiepler still objects to the system of incentives used in the managed care industry. HMO contracts, he said, often force physicians to assume the full financial risk of doing what they feel is necessary for their patients.

What can a cancer patient expect these days from an HMO? Critics of managed care say the answer still depends too much on the particular organization. Standards vary, they say, and the patient may not know there's a coverage problem until he or she is seriously ill. The definition of appropriate care (as opposed to "experimental" treatments that aren't covered) also is constantly shifting with advances in research.

But patients have been gaining some ground, especially in their ability to get second opinions. A state law due to take effect July 1 will require all health insurers, not just managed care groups, to call in independent panels of experts to settle disputes over unproven treatments for gravely ill patients. Kaiser backed this legislation, and many large HMOs (such as Health Net and WellPoint Health Networks Inc.'s Blue Cross managed care network) already make a similar review process available through outside groups like the Virginia-based Medical Care Ombudsman Program.

"Historically, HMOs have long tried to save money by calling things 'experimental' for as long as they can," said USC Medical School Professor William B. Schwartz Schwartz said. Looking forward, he says the pressure to cut costs by rationing care is getting worse, because managed care groups have saved all the money they can from cutting out unneeded procedures.

But this is not true only of managed care, says Schwartz. All third-party payment systems, including government programs such as Medicare, are feeling the pinch and are under the same incentive to limit access to costly technology. If that's true, then HMO defenders may have a point when they say the grass isn't any greener on the fee-for-service side or what's left of it.

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