David Lawrence, chairman and chief executive officer of Kaiser Permanente, warns that in an environment rife with attacks on managed care, "what's at stake is the fundamental trust of the American public."
Whom does the public trust when it comes to healthcare matters?
A Towers Perrin survey of 1,081 Americans last September found that when people look for support in making healthcare decisions, at the bottom of the list of those trusted "a lot" are advertising (2%), the media (6%) and the government (8%).
Doctors are trusted the most, at 62%. HMOs scored 14%, but that's still more than the media.
Despite those statistics, legislators assume the public believes what the media is telling them about managed-care plans. And legislators are acting accordingly, even though HMOs may protest that some media reports distort the facts.
For example, the California Association of HMOs, fighting news stories on the issue, has been maintaining that its members' physician contracts have "no so-called `gag rules' that restrict a physician's ability to discuss with the patient the healthcare of that patient," according to an association statement.
Recently, the group even adopted "Principles of Patient-Physician Communication" to reaffirm unrestricted communication between doctors and their patients.
But it's clear that legislators believe the media more than HMOs. And these days the media are providing a field day for legislators.
"This is the year for outlawing the so-called HMO gag rule," Herschel Rosenthal, chairman of the California Senate committee on insurance, told the CAHMO's annual meeting early last month. "The critical media coverage of this issue has been substantial, and most of you have probably seen the magazine covers with pictures of gagged doctors.*.*.*.*Essentially, the public is disturbed by the impression that HMOs, to protect their reputations and market share, are imposing gag rules."
The managed-care horror stories have "a ring of truth," Rosenthal told CAHMO members. "Perceptions become reality....Legislators like me take notice."
The result is that in California, where HMOs vehemently deny there are gag rules in physician contracts, Rosenthal and four other state legislators have authored five bills that would outlaw gag rules.
Similar measures have been passed-in Massachusetts, for instance-or introduced in a number of states as well as at the federal level.
The American Association of Health Plans says even HCFA has developed new regulations "prohibiting abuses that have not been associated with health plans," namely a ban on rewarding physicians for withholding necessary care.
During the current legislative session, California lawmakers are considering a whopping 109 healthcare-related bills, many of them in response to HMO abuses and perceived abuses.
In addition, signatures are being collected for two initiatives, sponsored by the California Nurses Association and the Service Employees International Union. Opponents say the radical measures would gut managed care.
The CNA's initiative seeks to control restructuring, contracting and other aspects of the managed-care industry. The measure would impose penalties on healthcare organizations that merge and hospitals that eliminate inpatient beds. It also would set limits on premiums and other charges and would prohibit HMOs' requirement that an enrollee agree to mandatory arbitration of medical claims alleging harm.
Bills and initiatives that opponents say go beyond patient protection and threaten the processes of managed care have been introduced in other states. In Oregon, an initiative seeks to ban capitation, a keystone of managed care.
Some bills mandate coverage, such as bills that require HMOs to provide a minimum of 48 hours of inpatient care to new mothers and their infants.
Charles Calderon, chairman of California's Senate Judiciary Committee, explained legislators' dilemma to CAHMO members. He said the committee conducted oversight hearings on capitation in which lawmakers considered media reports on HMOs' denial of care.
Despite the polls showing enrollee satisfaction with HMOs, there's a growing backlash, he said. "We don't hear from the satisfied customers."
HMOs, armed with their data illustrating high-quality care, as well as the satisfaction surveys, seem to have "deaf ears" to problems reported in the media and to the need to make the system "user friendly," Calderon said. Rather than fixing problems, HMOs seem to have "an answer to every issue being raised," he said.
"But I have too many family members and co-workers who all have stories about their managed-care system," he added. It could be they feel they aren't in charge anymore, he said, "but you have to deal with that, too."
"The anecdotal stuff is what drives legislators," Calderon said. It gives the public "the notion they're not getting proper care. People react according to what they think."
Responding to the legislators' remarks, Myra Snyder, the CAHMO's executive director, said the lawmakers "just don't get it." If they continue to be propelled
by the horror stories rather than by outcomes data and by a balanced view of the industry, "they could dismantle managed care," Snyder said.
The widely proposed solution to this dilemma is still elusive: HMOs need the ability to demonstrate quality to consumers.
"We're deeply vulnerable" to the mounting anecdotes in the press because of the lack of documentation on quality, said Lawrence of Oakland, Calif.-based Kaiser, one of the nation's largest HMO companies.
He warned that while methods of demonstrating quality are being developed, hostility against managed care is "going to get a lot worse before it gets better."
What about the National Committee for Quality Assurance's HEDIS project? "The report cards you generate on your behalf simply lack credibility," Rosenthal told CAHMO members.
That's why another California bill would require regulators to issue independent report cards on HMOs and make them available on the Internet.
"We're in a race with the legislators," said Paul Ellwood, M.D., president and CEO of the Jackson Hole Group-a health policy development organization that originally gained visibility for its influence on the debate over national healthcare reform. He's also organizer of the Foundation for Accountability, a group preparing a common set of measures of healthcare quality for consumers.
Ellwood urged CAHMO members to begin gathering data to use with the standard measures.
"I can't think of any way to blunt that movement (to legislate healthcare)" unless we can prove we produce better health, he said.
Tom Elkin, former director of benefits for the California Public Employees Retirement System and now a consultant, told the HMO executives, "With the media feeding frenzy...you can get legislated very easily." If HMOs can't demonstrate what managed care can do, "managed care can change very radically," he added.
Marc Rodwin, an associate professor at Indiana University School of Public and Environmental Affairs, is writing a book on how to promote healthcare accountability. And he says it can't be done effectively by legislatures.
Although oversight is needed, as are "broad processes and reviews," micromanagement of HMOs is counterproductive, he said.
"In general, legislating for specific clinical treatments can't work well," he said. While the issue of newborn babies grabs a lot of attention in the media and the statehouses, other patient populations-people turned out of the hospital one day too soon after a heart attack, for example-won't carry the same lobbying clout.
A recent development in Arizona suggests a better way. The Arizona Medical Association reached individual agreements with eight HMOs ensuring that length of maternity stays will be determined by treating physicians.
The health plans said they will support policies that don't conflict with guidelines set by the American College of Obstetricians and Gynecologists and the American Academy of Pediatrics. Those guidelines are a 48-hour stay for a normal delivery and 96 hours for a Caesarean section.
Because of those agreements, an Arizona legislator dropped a bill that would have made those stays mandatory.
Said Marilyn Laughead, M.D., president of the Arizona Medical Association: "We were called to the plate, we hit a home run, and the bill was dropped. It's better for everyone if healthcare isn't legislated."