HMO executives may, at times, wonder how it came to this. Their
health maintenance organizations currently rank dead last on a
Gallup confidence-level list of 15 institutions. Americans are more
likely to say they have confidence in "big business" (22%) than in
HMOs (17%) -- which is saying a great deal, considering last year's
corporate scandal epidemic (even last year, in the midst of the
corporate scandals, HMOs ranked below big business).
That's all the more ironic given that managed care enjoyed
spectacular growth in the 1980s as a prospective means of "curing"
America's ailing fee-for-service health system. Under that system,
healthcare providers priced each of their services and billed based
on the units of work they did -- the more services one used, the
more money one paid. Insurance companies' biggest costs came from
services rendered at the most expensive places (hospitals), and as
their costs grew, so did their premiums. Finally, the system
emphasized fixing health problems (restorative care) rather
than preventing them (preventative health maintenance, or
wellness).
The strict fee-for-service system invited huge and unnecessary
expenses, and it didn't do much to help people stay healthy. The
most logical solution seemed to be the development of a system that
promoted preventative care so that costly restorative care could be
avoided. The ideal system also promoted cost control, encouraging
people to seek care in the least expensive setting by covering the
costs of outpatient and physician office care. For the sake of
efficient care, the system reimbursed with a fixed fee, rather than
with itemized payments for units of treatment. Thus, the healthcare
maintenance organization (HMO) was conceived.
What Went Wrong?
But it didn't turn out as planned. June 2003 Gallup Poll
results* indicate that confidence in HMOs is significantly lower
than confidence in the medical system overall and could be dragging
down Americans' confidence in the healthcare system as a whole.
Women are the key healthcare decision-makers in most families --
and only 14% of them have either a great deal or quite a lot of
confidence in HMOs.
How have HMOs lost the confidence of the American public? First,
instead of controlling costs, HMOs seem to have lost control of
them. According to a recent article in the American Medical
News, healthcare expenditures increased 9.6% in 2002, an
increase nearly four times the rate of the overall U.S. economy.
Increasingly, costs are shifted to individuals through higher
co-pays and deductibles. Even so, health insurance premiums have
increased 15% in 2003.
Second, the shift to all-inclusive coverage and preventative
care -- the original vision of HMOs -- has failed to materialize.
Many people still lack prescription drug coverage, and preventative
programs, such as exercise training, are not covered by most
HMOs.
Finally, the HMO dream of reducing inefficiency and encouraging
healthier lifestyles to control costs has not been realized.
Accessing HMO care is anything but efficient. It has become a
bureaucratic jungle of approvals and denials. Services are rationed
based on institutionally defined, and sometimes irrational,
criteria. Treatment for a life-threatening illness or injury may be
approved, but getting relief for excruciating (but not
life-threatening) pain may be deemed an elective procedure and
denied. Going to an emergency room with chest pains may not be
covered if a diagnosis of a heart attack is not confirmed.
Bottom Line
In a healthcare system administered by the private sector (most
HMOs are privately run), decisions about the prioritization and
rationing of healthcare may be driven not by need or quality, but
by profit. Despite these concerns, much of the healthcare
legislation now in Congress proposes to increase
private-sector HMO participation.
Aggregated healthcare data from 2000-2002** indicate that 62% of
Americans think it's the federal government's responsibility to
ensure that all Americans have health coverage. Furthermore,
results from a September 2000 poll reveal that three in four
Americans thought the government should do more to regulate the
costs of healthcare in this country -- still, Americans generally
oppose a government-run healthcare system. But, given support for
some government involvement in the healthcare system, achieving an
appropriate balance between public- and private-sector involvement
in meeting Americans' healthcare needs may help to increase public
confidence in HMOs and the medical system in general.
*Results are based on telephone interviews with 1,029 national
adults, aged 18 and older, conducted June 9-10, 2003. For results
based on the total sample of national adults, one can say with 95%
confidence that the margin of sampling error is ±3%.
**Results are based on an aggregate of telephone interviews with
2,006 American adults, aged 18 and older, conducted from 2000
through 2002. For results based on the total sample, one can say
with 95% confidence that the maximum margin of sampling error is
±2.4%.
