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Bad Medicine
Connecticut doctors charge that new HMO rules are bad for patients' health
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10/18/1999
By: Michael C. Bingham
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The long-simmering feud between doctors and HMOs for control over the $1 trillion U.S. health-care revenue stream has erupted into open warfare.
The battle for control over the industry has hitherto been carried on behind closed doors - in corporate boardrooms, courtrooms and on Capitol Hill, as Congress debates the next round of HMO regulation. But on September 30 in Connecticut the set-to spilled into the public arena.
On that date the Connecticut State Medical Society (CSMS), which represents 7,000 physicians statewide, unwrapped a $50,000 ad campaign with full-page newspaper ads headlined, "Aetna Is Playing Doctor with Our Patients."
The ads, timed to coincide with the annual health-plan enrollment period, charge that physicians treating patients covered by Aetna U.S. Healthcare must elect the "least costly" treatment alternative in every case or place their reimbursement at risk. The strictures, say the CSMS' ads, extend to access to specialists and hospital care.
CSMS officials that same week asked state Attorney General Richard Blumenthal to investigate a new contract Aetna was asking doctors to sign, saying it violated state law, potentially compromises patient care and is tantamount to an unfair trade practice.
Blumenthal promised to look into the doctors' allegations. "They raise the specter of assembly-line medical care at the lowest common denominator,'' Blumenthal said. "We're not prepared to reach any conclusion at this point. We're going to investigate. Our hope is that perhaps Aetna will rethink their decision.''
The Blumenthal announcement was merely the latest in a series of recent Excedrin headaches suffered by executives of the Blue Bell, Pa.-based Aetna U.S. Healthcare, which contributes about 70 percent of Hartford parent Aetna Inc.'s $18.5 billion annual revenue stream. And although its market share in Connecticut is no more than about six percent, Aetna has been singled out by doctors for being, in the words of one physician, the "most pernicious" of health insurers.
\drop cap\On October 1, a consumer group announced that it would appeal a federal judge's dismissal of one of the first lawsuits in the nation to accuse an HMO of racketeering. The suit, filed in April on behalf of some six million Aetna customers, accused the company of promising quality health care but demanded widespread cost-cutting and penalized doctors who failed to increase their patient loads.
Moreover, Aetna's recent stock performance suggests the trajectory of a man who has wandered over the side of a cliff, as the company struggles to digest its $1 billion August acquisition of Prudential HealthCare. Following the Blumenthal announcement Aetna stock plunged to a 52-week low of $49.
Moreover, Aetna U.S. Healthcare is not alone on the firing line. Earlier this month the CSMS filed suit against the Trumbull-based Physicians Health Services (PHS) for breach of contract. The doctors' suit charges that the HMO failed to pay network physicians on time and permitted them little autonomy in making important decisions about patient care.
In addition, October has also brought a flurry of lawsuits brought by disgruntled patients who accuse their HMOs of defrauding customers by not telling them that doctors earn bonuses by driving down costs and that claims-reviewers earn extra compensation by denying claims.
Aetna U.S. Healthcare faces such suits in Mississippi and Pennsylvania. Another industry giant, Humana Inc. of Louisville, Ky., is being sued in Miami by two Florida police officers who allege that the company denied them necessary medical care.
\drop cap\For many physicians, the Aetna contract proposal marks the "last straw" in a doctor-HMO balance that seems to have tilted inexorably in the latter's favor.
At issue in particular is the document's "all-products" clause, which binds physicians not only to the company's present policies and products, but to any it might devise during the term of the pact.
"If a physician signs up for a certain Aetna program or HMO plan, they must agree to participate in all Aetna products or plans - even those that have not even been developed yet," explains Timothy B. Norbeck, executive director of the CSMS. "They're putting profits before patients."
Not surprisingly, doctors consider that clause a poison pill. Karen L. Laugel, M.D., a Stratford pediatrician, had been on Aetna's physician roster but said no dice to the new contract - and had to inform many of her patients that she could no longer care for them.
"Patients in the [Aetna] plan who may have signed on because of our practice are now being abandoned at a time when they cannot switch their health plans," Laugel says. "So they have to find a new physician who participates in that plan, or find a physician outside of the network and pay out of pocket. There aren't too many alternatives. The patients are really pawns in this."
Laugel sent a letter to Aetna outlining ten conditions of the proposed contract to which she and her colleagues in her practice, Pedi-Care Pediatric Care Associates, objected. Chief among these was the charge that cuts in Aetna U.S. Healthcare reimbursement had fallen below the actual cost of providing care to patients in the network.
The letter, which Laugel and her colleagues forwarded to their patients also charged Aetna with restricting referrals to specialists and maintaining highly restrictive standards of "medical necessity " that amounted to denial of services to patients who need them.
To doctors like Laugel, enough is enough. "It's a bad position to be in as a doctor. You're trained for years and years to be the patient's advocate. Now you're put in a position where your only choice is either to go along with a very unethical system, or to abandon your patients."
Laugel sees dire ramifications unless balance is restored to the doctor-HMO relationship. "The whole future of excellence in health care is at stake," she says. "Most physicians I know feel very oppressed, They're not able to do what they've been trained to do, to use their best medical judgment and to be their patients' advocate. I have never heard as many physicians as I've heard in the last five years say that if they had it to do over again, they would never have gone into medicine."
"Aetna talks on the one hand of not having as good a relationship with the physician community as they would like [on October 6, in a move to stanch rising member physician discontent, Aetna named widely respected former American Medical Association official John Kelly, M.D. to head its newly created Office of Physician Relations]," says Norbeck. "But if they really want to have that better relationship, their deeds do not match their words."
\drop cap\Aetna has attracted the unwelcome attention of state regulators elsewhere. In Texas, in the wake of Aetna's acquisition of Prudential Healthcare, the state medical association was instrumental in forcing Aetna to divest itself of another HMO subsidiary.
Of the Connecticut probe and the Blumenthal charges, Aetna officials will say only that they consider them "irresponsible."
The subtext of all this, of course, is the breakneck consolidation of the HMO industry in Connecticut. And even though Aetna U.S. Healthcare's market penetration in the Nutmeg State remains modest, it is one of only a handful of giants still standing on the bloodied HMO battlefield. And it's not afraid to flex its muscles.
"In the last ten years there have been 162 health-care mergers [in the U.S.]," explains Norbeck. "In the last five years, the 18 largest insurers have [consolidated] into six. That concentrates an incredible amount of power [in a few companies]. Power corrupts, and absolute power corrupts absolutely."
Many observers consider the Aetna case merely the bellwether of what the future might hold for the doctor-HMO relationship. Certainly if the company is able to enforce the terms of its new contract, other HMOs will sit up and take notice.
"A number of other insurers are lying in wait to see if Aetna gets away with what we consider a real pernicious policy," Norbeck says, "a contract that is so offensive, so unfair and so one-sided that we had to stand up and do something about it."
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