Despite their proliferation in the media today, medical horror stories were not spawned by HMOs.
In fact, HMOs may even be curbing some of the abuses that generated older medical malpractice stories, industry sources say.
And that, in turn, may spell higher profits for medical malpractice insurers, one analyst believes.
A review of older published accounts indicates healthcare has been hazardous to health for a long time.
For example, a May 5, 1986, New York Times story reported that "across the United States, as many as 28,000 people may be practicing medicine and treating tens of thousands of patients each year, even though they do not hold physicians' licenses and in many cases have little or no medical training, state licensing officials report."
Quoting an executive of the Federation of State Medical Boards, the Times reported that the nation's health was being threatened by a "rapidly growing pool of unlicensed and unlicensable people.
"`There are no hard data on how many people are working without medical licenses..but we hear many anecdotes about what these people are doing,"' the executive said.
Like current anecdotes, some of the older ones contained a good dose of hype. David Willett, a partner at Hassard Bonnington, a law firm in San Francisco, believes it was a stretch to say there were 28,000 unlicensed practitioners.
Willett has been representing insurers and providers for 30 years.
But Lee Newcomer, M.D., medical director at Minneapolis-based United HealthCare Corp., said that because many state medical boards weren't active in 1986, there could have been many thousands of unlicensed practitioners.
"In the good old days, nobody knew anything about the people putting their hands and their instruments in our bodies," said Tom Elkin, former head of health benefits services for the California Public Employees' Retirement System, a giant public purchaser. Elkin now heads his own consulting firm.
Ironically, tales of medical mayhem before the reign of HMOs were catalogued in a 1994 book by Harvey Rosenfield, the consumer activist and co-author of Proposition 216. That California ballot initiative targets HMO abuses, hospital downsizing and excessive healthcare executive compensation.
One of the more shocking stories in Rosenfield's book, called Silent Violence, Silent Death, tells of James C. Burt, "a Dayton, Ohio, obstetrician-gynecologist (who) was proud to be called the `Love Surgeon,' and even self-published a book (in 1975) to promote his medical specialty-experimental surgery on the sexual organs of women, supposedly to enhance their sex lives."
Burt performed experimental surgery on women for 22 years, sometimes without their consent, while they were under general anesthesia for other procedures. "The surgeries were disfiguring, caused extreme pain and major, irreparable medical complications," according to Rosenfield's book, which also says that Burt's colleagues did nothing to stop him.
Lawsuits, publicity and pressure from the governor of Ohio and the Ohio Medical Board finally got Burt to forfeit his license and retire to Florida, according to Rosenfield.
Nowadays, it's hard to imagine a cost-conscious capitated medical group covering for a doctor who is performing unnecessary surgeries.
And under HMO prodding, more providers are following standardized procedures or clinical guidelines with proven outcomes. In another irony, Rosenfield urged the adoption of such measures to deal with the malpractice "epidemic."
With health plans collecting data and monitoring providers, and employers "putting pressure on plans to demonstrate value and quality and service, there's truly an improvement in eliminating at least the aberrant, unlicensed or poorly certified providers, or those with poor performance. They are the first to go," Elkin said.
When Elkin was in charge of the multibillion-dollar healthcare program at the California Public Employees Retirement System, he used "friendly persuasion" on HMOs. He asked them to exclude from their networks those doctors identified in the National Practitioner Data Bank as having lost their licenses or been found guilty of felony charges, he said.
Such substandard practitioners are less likely to be found in today's HMO networks. Although detractors of the National Committee on Quality Assurance's provider credentialing requirements say they are toothless, industry sources say those requirements work in helping to weed out bad doctors.
"We were actually doing it this way before the NCQA" required it, said United's Newcomer. "When we were representing to our buyers that we had a select group of physicians, we had to show them what was special about them."
But the NCQA has upped the ante. Whether or not an HMO has a proper credentialing process constitutes 25% of the NCQA accreditation decision, said NCQA spokesman Barry Scholl.
HMOs must demonstrate that they credential their providers every two years.
Among the NCQA credentialing requirements, the HMO must verify from primary sources that a doctor has a current valid license to practice and has graduated from medical school, completed residency and has board certification, if applicable.
Health Systems International, parent of Woodland Hills, Calif.-based HMO Health Net, checks the licenses of every one of its 33,000 doctors, said Kathleen Billingsley, vice president of quality improvement and utilization management.
"If you do it right the first time, you weed out the bad apples," she said.
Last year HSI credentialed 1,200 new providers and discovered one license had expired. The doctor renewed it and was credentialed, said David Olson, an HSI spokesman.
Under HSI policy, if a doctor's license is found to have lapsed, the medical group has five days to resolve the matter or the doctor is terminated. No doctor has ever been fired under this policy, Olson said. "It keeps people on their toes about their licensing.*.*.*.*Credentialing works," he added.
As far as unlicensed individuals applying to serve on HSI networks, "my suspicion is they don't even bother," Olson said.
The NCQA also requires a plan to verify a physician's work history and history of professional liability claims.
A physician's application for membership in the HMO must contain attested statements about "lack of present illegal drug use; history of loss of license and/or felony convictions; and history of loss or limitation of privileges or disciplinary activity," according to NCQA documents.
United either terminates or doesn't accept into its networks doctors who have lost their medical or narcotics licenses, or their hospital or Medicare or Medicaid privileges, Newcomer said.
In one instance, in a disciplinary hearing a United doctor was found to have had an extramarital affair with a patient. He also administered drugs to her improperly. Although he did not lose his license, "we terminated that provider," Newcomer said.
To receive NCQA accreditation, the HMO must also show that it has reviewed information on the practitioner from monitoring organizations such as the practitioner data bank and the state board of medical examiners and that it has reviewed sanctions by Medicare and Medicaid.
A physician panel reviews information in the data bank for United, Newcomer said. The panel advises the HMO on whether violations and malpractice claims in the data bank "are egregious or not," he said. Claims that are found to be "nuisance suits" generally don't result in termination. But in one malpractice claim that resulted in death "the doctor was out," he said.
One surgeon had 16 malpractice suits filed against him, and he won them all, Newcomer said. "We still didn't take him, because if you've got the kind of bedside manner that makes people angry enough to sue," United doesn't want that doctor, he said.
HMOs also are required to report disciplinary actions taken against doctors on their panels. "With the accreditation going on now, it's getting harder and harder" for a provider to escape an unsavory past, Newcomer said.
During re-credentialing every two years, the HMO must repeat the credentialing steps and show it has reviewed enrollee complaints, quality reviews and enrollee satisfaction surveys for each physician.
HSI's credentialing committee, which meets monthly, is "very serious" about provider violations, Billingsley said. "They don't just say, `Bob had a bad day.'*"
In some cases, HSI tells a medical group that a certain doctor cannot treat Health Net enrollees or must have a monitoring doctor in the room when treating them.
To get NCQA accreditation, an HMO also must show it has a mechanism for reporting provider suspensions or terminations to appropriate authorities, as well as an appeals process.
Riding the backlash against managed care, more patients are suing HMOs and provider networks, attorneys and insurers say (May 20, p. 17). But at the same time, one analyst believes managed care has contributed to a surge in profits for medical malpractice insurers, who have enjoyed average returns of 25% to 30% since 1989-far exceeding property-casualty industry averages of below 10% in that period.
HMOs are providing "increasing oversight of both the cost and quality of care," according to a report by Greg Daniels, director and chairman of insurance broker Sedgwick James' national healthcare group. HMO "monitoring (and) increasing oversight by governmental and industry groups which focus on identifying marginal healthcare practitioners, e.g., the national practitioners data bank (and) state and national medical societies," has had an effect on medical malpractice insurers' bottom line, Daniels said.
"Improvements in quality-assurance activities have led to some improvement in loss experience. Recent studies show decreases of up to 10% in average settlements and average jury awards in medical malpractice cases," according to Daniels' report.
Data published by Jury Verdict Research, Horsham, Pa., show that the average malpractice settlement fell to $325,000 in 1995, from $488,750 in 1991 .
But whatever good managed care may be doing to raise standards of practice may be offset by the deteriorating relationship between physicians and patients, which leads patients to sue, counters Hassard Bonnington's Willett.
Willett said that although managed care has "a huge potential for raising the standard of (provider) practice," that hasn't been realized yet.
"The really elegant mechanisms that can be employed by managed care to judge physician performance or to improve it have been of fairly recent origin" and are not the main reason for the good experience of medical malpractice insurers, Willett said.
The main reason, according to malpractice insurer executives contacted by Willett, is that "in the mid-1980s they were predicting doom and gloom in the professional liability industry and the carriers overreserved." In the past five years, the carriers have been releasing those financial reserves and "that has affected the bottom line on a calendar-year basis, making it look like the carriers were making a lot of money."
However, he said, "that kind of profitability is coming to an end" because the carriers have stopped overreserving.
It remains to be seen whether managed-care controls will result in fewer losses for malpractice insurers. The increasing exposure created by managed care-such as enrollees suing for misdiagnosis when a primary-care physician doesn't refer to a specialist-will dampen the effect of those controls, he said.