Study Suggests HMOs Get Bad Rap

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March 9, 2000 (Washington) -- A new report shows HMOs and other types of health plans aren't very different when it comes to frequency of surgery, problems with unmet need, delayed care, and use of emergency room and hospital services. HMOs do offer more preventive care, however, by providing benefits such as flu shots and advice on smoking cessation. HMOs also showed a smaller proportion of families with annual out-of-pocket costs over $1,000, compared to other health coverage.

The report, conducted by The Center for Studying Health System Change, was based on findings from more than 35,000 telephone surveys conducted from 1996 to 1997. Researchers compared responses of HMO enrollees to those who were covered by "non-HMO" plans, which included preferred provider organizations and traditional fee-for-service products.

Overall, the study found HMO patients made more visits to the doctor's office, but their plan paid for fewer trips to medical specialists. According to the report, non-HMO patients were happier both overall and with their physician visits than HMO participants. Even though other types of health plans may have won the popularity contest among members, observers say the study shows the managed care system certainly is not careening out of control.

What the results indicate, says Janet Corrigan, PhD, an official at the Institute of Medicine, is the "disconnect" between public opinion of HMOs and reality. The disconnect may be even more widespread, says Linda Bilheimer, an official at the Robert Wood Johnson Foundation, since "most people don't know what type of health plan they're in."

"The HMO's just the whipping boy," says Larry Green, MD, director of the American Academy of Family Physician's Center for Policy Studies.

Robert Reischauer, PhD, president of the nonprofit Urban Institute, says the findings should help to calm consumer fears of HMOs. But he was also skeptical about how much public opinion could change, given the bitterness of attacks on HMOs from physicians and others in the health industry.

Few expect that the study's findings will blunt the strong public momentum for a patients' bill of rights. John Rother, director of legislation for the American Association of Retired Persons, tells WebMD, "These findings do not support the idea of a crisis in access to care in HMOs, [but] what's driving the consumer protection debate is the desire to be assured that you'll be treated fairly." That debate, Rother says, "doesn't really have much to do with the overall statistics as much as your personal experience."

Public sentiment has already moved HMOs to soften their image. As Bilheimer noted, these plans have become "kinder and gentler."

But it may be too little, too late, given continued interest on Capitol Hill in regulating managed care practices. Lawmakers Thursday held their second negotiating session to try to resolve the differences in the House and Senate's health care reform bills that passed last year.

"Common sense thinks that the [managed care] industry should have agreed to [some reforms] a long time ago," Rother tells WebMD. "They've made themselves the target unnecessarily."

The congressional negotiators announced agreements on three relatively minor provisions. First, they agreed that parents may designate a pediatrician -- and in some cases, a non-physician pediatric provider --- as the primary care provider for their children. But that right only applies if the plan allows enrollees to designate their own primary physicians.

The House and Senate also agreed that patients may go to the nearest emergency room to stabilize their condition without prior authorization and without financial penalty. The lawmakers reached a deal that made it harder to exclude providers from their network.

But huge areas of disagreement remain in the congressional talks, including over how many Americans should benefit from the legislation, the proper appeals processes for patients with grievances, and the possible right to sue one's health plan.

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