By HILDY MEDINA

Staff Reporter

As managed care’s dominance of the health care industry has grown, so has the number of complaints from various managed care constituencies patient advocates, physician groups, hospitals and drug companies to name a few.

To address some of the most frequent complaints and issues of controversy, the Business Journal interviewed a diverse group of local health care experts.

They are Jamie Court, director of Consumers For Quality Care; Michael P. Dwyer, health care analyst and managing director of accounting firm BDO Seidman LLP; Assemblyman Martin Gallegos, D-Baldwin Park, chair of the Assembly Health Committee; Dr. Brian Johnston, immediate past-president of Los Angeles County Medical Association; Jim Lott, senior vice president of the Healthcare Association of Southern California; and Myra Snyder, president and chief executive of the California Association of Health Plans.

Question: Is the public outcry about HMOs warranted or overstated?

Court: I think it’s warranted but unfocused. I think people know there are problems but they don’t realize there is a systematic lack of accountability. In other words, we shouldn’t need to dictate discharge times but we should create consequences for HMOs that don’t rely on the standard of care.

Dwyer: Much of the public outcry is overstated, fueled by media coverage of horrific cases of HMO medical care gone wrong. As detrimental as such cases have been, they reflect very small percentages when you consider the millions of patients who receive their health care from HMOs.

Gallegos: I think (it’s) definitely warranted. We’ve seen three studies recently Harvard, UC Berkeley and an independent study that all showed a great deal of dissatisfaction among HMO enrollees.

Question: Everyone, it seems, has a horror story about mistreatment involving an HMO. Even allowing for hyperbole, why are there so many problems?

Snyder: I think there are about four at most, 10 stories that have been told over and over for the last four years. But if you consider that HMOs represent 18 million people, it’s not an overwhelming figure. Obviously, to that one person it’s very serious. Unfortunately, medicine is not a perfect science.

Court: I don’t think it’s hyperbole. I think the reality is, people have had tremendous travails in getting health care. The incentive of the prepaid health plan is that everyone makes more when you give less care. When the incentives are to withhold treatment from patients, they become angry.

Lott: Those of us who can remember what it was like before HMO dominance also can recall horror stories about our health care delivery system. As one form of managed care, HMOs have brought much-needed economic discipline to a system whose cost was supported by double-digit inflation. Adherence to this discipline is hard medicine for consumer advocates and many health care providers to swallow.

Gallegos: I think the reason we’re hearing about so many problems is because the patients find this system to be consumer non-friendly. What you’re seeing now is a system that is much more difficult to access. Access has been a very important concern, as well as choice.

Question: Given these problems, would you expect patients to pony up even more money for health care coverage?

Johnston: They already are. I see patients who pay out-of-pocket for the tests, drugs and consultations they believe they need. Those who can afford better, pay for it and get it.

Dwyer: Many HMOs are experiencing increased loss ratios for contracted services. As overhead costs associated with greater regulatory compliance and marketing eat away at the bottom line, individuals enrolled in HMOs can expect to see increases in premiums and out-of-pocket costs for care.

Snyder: There are some studies that have asked this same question. What they found is that patients want certain things, but the willingness to pay for them is very, very low.

Gallegos: There are ample premium dollars to cover health care needs of enrollees. What we’ve seen is a cost shift. These dollars are going into multimillion-dollar executive salaries instead of into care and treatment.

Lott: Studies confirm that consumers behave more responsibly when they share in the cost of accessing the health care delivery system, so I support the use of copayments and deductibles.

Question: The HMO industry in California is primarily regulated by the Department of Corporations, which has been criticized for not having enough expertise and being too soft on HMOs. The state task force has recommended a new agency be created for the express purpose of regulating HMOs. Who should regulate the industry in California?

Snyder: We do support the idea of a new agency solely regulating HMOs, due to the fact that there are 18 million enrollees. It’s in our best interest to have a really good regulation.

Court: We believe it should be an elected official, like an insurance commissioner, or it should be a commission with dispersed power and joint appointment by the Legislature and the governor. It should not be a single appointment of the governor who is only accountable to the governor and the governor’s campaign contributors, the HMOs.

Lott: Any business that influences how we access the health care delivery system should be monitored by an agency that does not have other responsibilities competing for its attention and resources, as is the case with the Department of Corporations.

Question: What role should the feds play in regulating health care?

Gallegos: Interestingly, we’ve seen the federal government becoming more and more desirous of getting involved in HMO regulation. I applaud this. We’ve seen legislation being introduced which attempts to implement many of the kinds of reforms that we in California have been trying out. This is clearly reflective of the experiences of people throughout the country.

Dwyer: The feds should play a limited role in regulating health care. Over-regulation leads to higher costs and more red tape for everyone.

Johnston: Based on the feds’ ham-handed criminalization of medical care in the Kennedy-Kassabaum bill, we should do everything in our power to limit federal influence in health care in California.

Question: Current state laws largely protect HMOs from major liability in cases of medical malpractice. Should HMOs in California continue to have this protection?

Gallegos: This is one I feel very strongly about. I absolutely disagree. The place we see the largest incidents of abuse is where health plans are making medical decisions. Many times these decisions by HMOs are overruling the clinical decisions of the gatekeeper doctor. What happens then is the patient is negatively impacted by the HMO’s decision. The HMO isn’t held accountable, the treating doctor is.

Snyder: Our position is, our physicians are licensed and experienced so when there are medical decisions to be made they should be accountable. We don’t believe that the health plan should be.

Court: HMOs practice medicine by overturning medical decisions made by doctors. They should be responsible for making those decisions.

Question: Should HMOs be required to post information on the quality of care they provide to allow consumers to comparison shop? If so, what should the criteria be?

Dwyer: Yes, however, without a standardized format and objective assurance, the information may only confuse the general public and be used in marketing ploys.

Johnston: I am deeply skeptical of the supposed measures of quality. Posting such information is merely an advertising opportunity for the HMOs. I do not believe quality can be measured by counting the number of mammograms, pap smears, immunizations or other procedures performed by an organization.

Lott: Purchasers and consumers of health care are demanding medical quality report cards. It’s going to happen, so we need to help design it.

Question: Should HMOs cover experimental treatments and drugs?

Johnston: Not all experimental treatments and drugs are cost effective or justified. Deciding which ones are worth using should be based upon objective review of the best scientific data available. Patients may choose to join an HMO which does not provide those services because the cost of such care is frequently very expensive.

Snyder: (HMOs) already do. What happens is, if your physician says there is an experimental treatment available and you’d like to try it, your health plan will then send your case to three expert physicians. If one says you should do the experimental treatment, then you get it.

Dwyer: There are ventures underway where clinical trials are being brought to the HMO marketplace. HMOs should participate in providing experimental treatments and drugs in partnership with pharmaceutical companies and patients. Carve-outs for experimental drugs with appropriate stop-loss provisions can be established.