Study: HMOs take money from patient care

pickledpepperRN · Nov 27, 2003

http://www.thestreet.com/_more/stocks/melissadavid/10128215.html

HMOs Look to Fatten Up on Medicare Reform By Melissa Davis

To judge by current Medicare proposals, lawmakers seem intent on abiding by the same Hippocratic oath that guides the medical profession itself.

They have opted to "first, do no harm" to the private health care industry. Their proposed legislation, meant to provide seniors with prescription drug benefits, also rewards health care players across the sector.

"In order to get the drug bill passed, Congress needed unanimous support, which was only possible by increasing payments for all groups," Lehman Brothers analyst Adam Feinstein explained on Thursday. "Thus, this is likely to create a near-time windfall for all provider groups."

Indeed, only a handful of specialty groups seem exposed to possible pain. Most health care players should instead receive top-notch care. And some can expect to achieve their strongest health in years.

(The Medicare bill itself was struggling in the Senate Monday morning, with a filibuster promised by Democrat opponents. To read more, click here .)

Chain Reaction

Two groups in particular -- senior insurance programs and rural hospital chains -- could be poised for the biggest recovery of all.

For years, companies such as PacifiCare and Humana :NYSE - clung to a tough insurance market that others quickly abandoned.

They provided insurance coverage to senior citizens through so-called "Medicare+Choice" programs. Despite painful reimbursement cuts -- which sent other insurers fleeing -- both companies continue to rely on Medicare+Choice plans for most of their profits.

"These companies have attempted to maintain the viability of the business by reducing benefits to seniors and by exiting service areas," Morgan Stanley analyst Gary Lieberman wrote on Tuesday. "Hence, immediate payment relief in 2004 -- as supplied in the House version of the bill -- is crucial to maintaining the profitability of this book of business."

If passed, the bill would nearly double Medicare+Choice hikes to 3.7% annually. PacifiCare, which relies on Medicare+Choice for 80% of its profits, has already seen its stock price rocket on the proposed increase. Indeed, both PacifiCare and Humana have recently set new 52-week highs.

But other insurance companies -- including one of the industry's strongest -- stand to benefit from the higher payouts as well. UnitedHealth which ranks as the nation's second-largest insurer, has already forged a strong relationship with seniors that could pay off even more.

"United, we believe, has significant opportunity to be a material player in the evolving Medicare managed care program," Legg Mason analyst Thomas Carroll wrote on Wednesday. "United currently offers many health insurance and health benefit-related products through its Ovation division to this part of the population."

Both Carroll and Lieberman pointed to UnitedHealth's exclusive relationship with the American Association of Retired Persons -- which has expressed support for the proposed Medicare changes -- as an especially valuable tool. ...

(click link to read the entire article)

Katnip, RN · Nov 27, 2003

What really amazes me is that they act like this is something new. It's been going on for ages. HMOs and other insurers are for-profit companies. Their business is not providing healthcare but to make the maximum profit they can to keep shareholders happy.

fergus51 · Nov 27, 2003

HMOs are the devil:devil: I can't even adequately express my feelings about them here without using a lot of words that would probably get me banned from the bb.

Long Term Care Columnist / Guide · Nov 27, 2003

Fergus is absolutely right on this one. Don't even get me STARTED on HMOs and managed care........@#%^**!!

pickledpepperRN · Nov 28, 2003

http://www.consumerwatchdog.org/healthcare/st/index_medmal.php3

http://www.consumerwatchdog.org/healthcare/st/st000503.php3

Apr 25, 2000

Husband Bleeds to Death in HMO, Wife Forced to Settle in Arbitration

® Patient's Medical History: "My husband, Dwight Lobb, entered his HMO hospital for surgery. Dwight had researched this procedure thoroughly by reading all the written material available to him, interviewing people who had had this surgery and talking to the HMO surgeon and therapists. Feeling well and confident about the surgery, he proceeded.

The surgery was performed successfully according to the HMO operating room records. After the surgery, Dwight lay unattended, neglected and forgotten at the HMO hospital, and quietly bled to death.

In spite of deteriorating vital signs and complaints of severe pain and abdominal spasms, no HMO physician was called in. Nursing cut-backs on the floor, due to corporate cost-cutting, prevented a nurse from even checking on Dwight. At the most critical time, after Dwight had complained of excrutiating pain, he went unmonitored for over an hour and a half. When Dwight finally was checked, he was dead. In less than five hours after leaving the recovery room from a routine elective surgery, my husband died from internal hemorrhaging.

Later, upon review of my husband's charts, it was easy to see that he had died simply from neglect. For whatever the reason, Dwight was not monitored or checked on properly. He died silently and alone, unable to help himself. We put our full and complete trust in our HMO. They promised quality health care. They sent me home after Dwight's surgery, promising to take care of him. They did not."

SAN DIEGO, CA- "Since that time, I have been involved in the arbitration process with my husband's HMO. You are bound by arbitration as part of your membership agreement with the HMO, should a problem arise. This, in itself, is a scam. You must retain an expensive attorney to have any chance of even getting through this process, when facing the powerful HMO attorneys. Then they wear you down through delay after delay.

In my particular case, the HMO attorneys called for a settlement conference before even one deposition was taken. By this time, I was concerned about my mental and physical health and going through another year of this anguish. I was under endless financial scrutiny by the HMO attorneys since we were self employed, and faced an additional forty to fifty thousand dollars in legal fees to try and recover compensation for our loss. While it was my decision, I felt extremely pressured and threatened by the HMO's powerfully manipulative arbitration system, so I settled.

The saddest part of this entire HMO arbitration process was the coldness. The HMO did not care how much I and my family had suffered. They didn't care that a human life was lost because the company didn't staff enough nurses on the floor to even go into Dwight's room. The HMO was only concerned about how much it would cost them to dispose of this matter and they wanted to do it as cheaply as possible.

My family and I were not fully compensated for our loss. I lost my husband, lover, business partner and best friend. My children lost the best father in the world and my mother-in-law lost her sweet son."

-- Dwight Lobb's story is reported by his wife, Suzanne Lobb.

FTCR will continue to fax daily a story of HMO Arbitration Abuse to educate the public on the need for reform. AB 1751 (Kuehl) makes HMO binding arbitration voluntary rather than mandatory.

Geeg · Dec 7, 2003

HMO's make money the old fashioned way-they steal it!