Fighting Against the Evils of For-Profit Health Care: The Patientsí "Bill of Rights"
Marin Alisa McDonald
Poverty & Prejudice: Social Security at the Crossroads

Since time immemorial, health has been an important concern in the lives of humans. Civilizations have constructed complex infrastructures over the centuries to combat the malevolent forces of disease and pestilence in an attempt not only to extend life, but to improve its quality as well. In the 20th century the most dominant force in the battle for health has been the emergence of national health care, programs designed to provide sweeping coverage for all legal citizens in the United States. While this idea was a noble concept, national health care programs have been plagued with financial insolvency from their very inception. This trend, coupled with a growing need for medical care and support, led into the privatization of the medical field, or the advent of large-scale, for-profit health care. This proposed solution, however, has yielded problems transcending financial insolvency. With more attention being paid to monetary "bottom lines" than patient safety and well being, this system has stacked up a series of malpractice suits as well as a score of documented accidents. Given this, it has become apparent that for-profit health care, if it is to survive the next millennium, needs to be reformed to protect patients from the misguided efforts of for-profit health care. The Clinton Administration's response to this plight is called the patients' "Bill of Rights", a document aimed at stopping medical care fraud and debauchery by clearly defining the rights of men and women to receive adequate health care.

Prior to the 197O’s, America’s health care system was wildly overspending and overexpanding. Indemnity insurance and government agencies such as Medicare not only paid for medical costs, but also encouraged further growth. In the 1970’s, health care expenses soared to the point where it became clear that a change in the system was needed, The change came in a form of the Health Maintenance Organization (HM0) Act of 1973, which took its main source of inspiration from the Kaiser Permanente Health Care System (MacArthur, 1997). This provision encouraged the creation of organizations that would provide managed care by completely serving all its members on the capitation basis. The capitation basis mandates that each physician receive a flat fee for each patient visited, regardless of the amount of time he or she spends with said patient (Meckler, 1999). Clearly, it can be seen that such a remuneration policy encourages physicians to spend as little time as possible with people seeking health care. Furthermore, documentation suggests that physicians with certain HMOs are even afforded bonuses at the end of the year if they save money by limiting referrals and costly procedures (Meckler, 1999). Additionally, the HM() Act of 1973, originally designed to subsidize non-profit HMO'.s and combat capitation, has had little initial impact on the system. The government was unwilling to battle the American Medical Association (AMA) in pushing the IIMO reform due to previous failures over Universal Health Care. At this point an unexpected ally of the managed care reform, corporate development, made an appearance.

The corporate world had kept a close eye on the transformation of the health care system since the passage of Medicare and Medicaid, which attracted doctors to elderly and poor patients. This form of public financing was very lucrative to investors, who already owned hospital chains and nursing homes that exploited Medicare and Medicaid for handsome revenues. Ironically, the effort's for cost containment also created opportunities for corporate development. The corporate world decided to jump in and shape the HMO reform rather than be shaped by it. Government, starved for a solution, welcomed this intervention by the for-profit sector and in 1980 President Reagan reformed the original HMC) Act of 1973 to include a fund to subsidize the establishment of for-profit HMOs (Kuttner, 1996). Now it was pressure of creating efficient, business-like management of the health care system that was undermining the traditional professional sovereignty of health care providers. Thus the HMOs, in addition to the for-profit hospitals, came under control of corporate organizations, In 1994, the Universal Health Care Plan, proposed by President Clinton, targeted for-profit health care providers as an integral portion of the medical field in the United States. With this bill, Clinton's goal was to create health alliances, made up of consumers, which would select between different providers and choose the plans they thought offered the best quality and access. These alliances would complement the already growing for-profit managed care sector in creating managed competition, as envisioned by Alain Ethoven (Kuttner, 1996). The government would subsidize the uninsured, and thus the entire country will be insured and have a choice of a provider, Unfortunately, when the Universal Health Care Plan was defeated, the system was left with business-oriented provider and an uneducated consumer.

Given this lack of governmental control the for-profit providers have invented several methods to cutting costs and thereby increasing profits. The physician working under an HMO contract is subject to a review of his or her decisions by the HMO; utilization reviews, gate keepers and financial incentives to withhold care are consistently on the minds of many physicians trying to provide both for their patients and themselves, This is a central conflict within the for-profit health care sector the dispute between the needs of the physician and the needs of the patient. Managed care's traditional goal of educating physicians about cost conscience quality care, to avoid practices such as defensive medicine, has turned into a race for the lowest possible medical loss ratio, and the highest profit. The race for profit inadvertently resulted in lower quality care, as evidenced by the special cases of HMOs. In capitation, the profit is made by providing the least possible care, and nothing is more effective in discouraging a patient's return than a distasteful experience with a provider,

While some argue against this largely negative view of the for-profit health care system, statistics show that HMOs have an alarming rate of patient decrease in health and incorrect diagnosis. One study conducted by Dr. John Ware of the AMA found that, "…elderly and poor chronically ill patients had worse physical health outcomes in HMOs than in FFS (fee for service) systems," (Ware, et. al, 1996). A completely different study run by the American Heart Association stated, "In hospital mortality of myocardial patients is twice as high in HMOs that in FFS systems." (Casale, 1997). These studies, and others like them, indicate a low level of quality in the health care of HMO’s and evidence the need for reform.

Case Studies

Beyond the myriad of studies completed ascertaining the lack of effectiveness in HMOs lies the score of published case studies. There are literally thousands of documents relating personal encounters with HMOs that resulted in tragedy. Each of these occurrences stands as a testimony to the inability of for-profit health care to provide society with safe and reliable health care.

1. A healthy 2-year-old boy was taken to a local hospital after a fall, with a stick lodged between his upper lip and gums. Once there, health care personnel repeatedly misdiagnosed the boy's condition, and, mindful of the HMO's cost-consciousness, refused to authorize an $800 CT scan that would have confirmed that he was developing a brain abscess, As a result of this poor treatment, the boy was left blind and brain damaged. (Anagos, 1996).

2. A 27-year-old man from central California was given a heart transplant, and was discharged from the hospital after only four days because his HMO wouldn't pay for additional hospitalization or for the bandages needed to treat the man's infected surgical wound. The patient died as a result of the inability to obtain proper health care (Mitchell, 1996).

3. A 65-year-old Tennessee woman suffering from a painful gastric condition resulting from a bleeding peptic ulcer went to see her physician, Her doctor prescribed the drug Prilosec, but the patientts managed care company wouldn't pay for it since it wasn't on the approved company formulary. The patient was given an alternative drug without the knowledge of her doctor. When he found out, the doctor complained to the HMO, saying that without Prilosec he would have to operate on the patient's stomach, The HMO wouldn't budge. For five months the patient found herself in the middle of a battle between her doctor, who gave her free office samples of Prilosec whenever he could, and her HMO, which switched her to its approved drug just as often. At the end of the five months the woman's ulcer had become so bad it required surgery, Doctors removed 35 percent of her stomach. Furthermore, the woman suffered a stroke in recovery and is now partially paralyzed along her left side, (K eating, 1997).

4. A man suffering severe chest pains was taken to his local emergency room by his wife, His HMO wouldn't authorize an angiogram, which an emergency doctor had ordered. So the man and his wife went home, packed their bags, and drove to the approved hospital an hour and a half away, as the HMO directed. After receiving routine blood work, an EKG and an X-ray, the man was told by emergency personnel to go home or find a motel for the night, that the HM() wouldn't admit him, After passing through the hospital doors on his way home, the patient collapsed with another bout of chest pains. According to the man's wife the hospital's employees watched from a distance of 20 feet and did nothing for at least 10 minutes. Finally, a nurse told the woman, "If you really want us to admit you, we will," The woman refused this tepid offer. The next day, the patient and his wife called one of the HMO's cardiologists to complain. Concerned that the chest pains were lingering, they said they were going to bring him back to their local, non-HMO hospital. The doctor reportedly said, "Lady you can take him anywhere you want, we're not covering it. if After entering the emergency room the man finally had a heart attack. A request to treat him was refused by the HMO. An angiogram was performed anyway and five blockages were found. A request to transport the patient to another hospital for bypass surgery was also refused by the HMO. Surgery was performed nonetheless. The HMO would not pay for the surgery, saying the man did not meet its criteria for emergency services (Riedel, 1995).

5. When a couple's daughter was born three months premature, an eye exam indicated she had the early stages of retinopathy, a condition that is usually correctable, Doctors assured the parents that there was no cause for alarm, and a follow-up test was scheduled, The parents' HMO demanded that they again see a primary care doctor before the test could be approved. That led to an eight-week delay, which resulted in the little girl becoming permanently blind, (Findlay, 1997).

6. A 50-year-old woman complaining of bladder pain and blood in her urine was seen by five different doctors in her HM() over an eight-month period, The HMO physicians told her she was suffering symptoms of menopause and was given estrogen Finally, the woman saw an urologist who diagnosed bladder cancer, (Landers, 1997).

7. A Pennsylvania woman visited her primary care physician's office complaining of chest pain, mild shortness of breath, and numbness in her shoulders lasting about twenty minutes. Her blood pressure was in the high normal range. An electrocardiogram revealed an abnormality. The doctor wanted to monitor the patient with a device called a Halter Monitor but her HMO wouldn't pay for more tests. Two weeks later, while driving her car, the woman experienced extreme chest pain and passed out. She was rushed to the hospital where prolonged resuscitative efforts were performed. The patient never recovered; she remained unconscious with cardiac arrest and to this day has not regained consciousness. The woman suffered irreversible anoxic encephalopathy, and is expected to remain in a persistent vegetative state for the rest of her life, (Elsesser v. Hospital of the Philadelphia College of Osteopathic Medicine, 1992.)

8. A mother in Atlanta called her HMO at 3:30 a.m, to report that her 6-month-old boy had a fever of 104 and was panting and limp. The hotline nurse told the woman to take her child to the HMC)'s network hospital 42 miles away, bypassing several closer hospitals. By the time the baby reached the hospital, he was in cardiac arrest and had already suffered severe damage to his limbs from an acute and often fatal disease, meningococcemia. Both his hands and legs had to be amputated. A court subsequently found the HMO at fault, (Rabin, 1996).

9. A Medicare HMG beneficiary with symptoms of pneumonia and a heart attack was denied admission to a hospital, with the concurrence of his HMO primary physician. The man died on the way to see the doctor. (Rosenthal, 1996).

10, A Washington, D.C. woman complaining of a post-surgery sore throat and nausea went back to the hospital for treatment. Her HMO allowed a relatively inexperienced physician's assistant to examine her and prescribe some medicine and bed-rest. The woman died at home that night. She was suffering from a punctured esophagus received during surgery a little more than a week earlier. (Hilzenrath, 1995).

These are just a sample of the host of malefactions committed by the HMO in the wake of increasing the profits of medical care. Clearly, given this type of failure rate, and the severity of the failure itself, the situation mandates defensive measures to combat the evils of for-profit health care.

The "Bill of Rights" is a measure taken by the government to create standards of quality and access for providers to follow standards otherv4se overlooked in the modern drive for profits by the medicine sector. Several legislation proposals, the major one being the patients' "Bill of Rights", are currently being debated in congress with the purpose of easing the threat of managed care on health care delivery in this country However, the patients' "Bill of Rights" is only a temporary measure; as the health care system enters managed competition, the quality and access will be necessary characteristic of a successful provider. The parties and practices that made patients' "Bill of Rights" a necessary measure for a current system merit further examination.

Theoretically, if the services for-profit institutions provide to the consumer are substandard, the patient, as a consumer, will be free to find another provider by taking their business elsewhere. In reality, the patient in the health care system is a captive of well-known "asymmetries of information"(Kuttner, 1 996j'; the effect of competitive market is obstructed by the lack of information the patient has in choosing between other health plans. A quote by Francis Moore M.D. sums up the effect of having uninformed patients in the health care marketplace, Without consumer input, market forces often fail completely or behave perversely, acting strongly on price without regard to quality and breadth." (MacArthur, 1997) The perverse behavior" results in low quality care in favor of maximum possible profit.

Besides lowering the access to and quality of care provided to its subscribers, commercial medicine has other side effects on the entire system of health care in the United States. For-profit health plans tend to avoid customers with chronic illnesses, AIDS or other conditions that will cost the insurer more than the premiums paid by the patient (MacArthur, 1997). These high-risk cases are dumped onto the public sector, while healthy patients are lured away to the private one. In addition to skimming the low-risk patients, the for-profit sector in general tends to avoid contributions to research teaching and responsibility to the broader community. Ironically, many non-profit health plans are now forced to follow the same business practices as the for-profit ones in order to stay in business.

Increasingly the for-profit sector in shaping the U.S. health care into a system in need of a patients' "Bill of Rights". Columbia/HCA, the world's biggest for-profit hospital chain, is a prime example of this trend. Columbia/HCA buys out the non-profit hospitals in communities and turns them into for-profit hospitals (Kuttner, 1996). Immediately following the conversion, the charity care provided to the community drops tenfold, leaving the area's other institutions to absorb a disproportionate amount of uninsured patients. Columbia/HCA also offers doctors investments in their local ventures, which guarantee a steady flow of patients since doctors have a stake in hospital's success. This is an example of lack of information and power that patients have in choosing hospital that offers best possible care. It is the doctor's responsibility, who has been empowered by the patient’s trust and confidence, to provide the patient with provider. Accordingly, whatever the quality of Columbia/HCA's hospital, the physician will still refer his patients to it due to a stake he or she has in hospital's success (Kuttner, 1996).

The patient care and the mission of the medical profession have forever been changed. Historically, the physician was independent of the cost issues associated with patient care he or she recommended. Professional physicians have always had a close link with the poor of their communities, and they worked under a set of ethics that prohibited patient care to be influenced by anything other than the good of the individual patient. Society supported the physician due to these altruistic ideals and refrained from interference. Yet increasingly the physicians’ ethical ground is being tested; the forces of the marketplace make physicians choose patient care on the basis of whether it is consistent with the bottom line. A physician-employee is just an employee, and thus he or she can no longer be relied on to provide the best possible care. The patients' "Bill of Rights" will now assume the function of patient advocate, a role that was previously, and still should be filled by the physician.

The patients' "Bill of Rights" will play the role of patient advocate until the system can make a complete conversion into managed competition. Ironically, for-profit institutions are hastening this transition. The for-profit's threat of monopolizing managed care and hospital business is causing many non-profit organizations to organize and compete against them in securing patient contracts. One example of such consolidation is TennOne, a chain of non-profit hospitals in Tennessee that organized to compete against Columbia/HCA (MacArthur, 1996). TennOne and institutions like it will cause a complete conversion of U.S. health care to managed competition. Once this transition takes place the role of patients' advocate no longer will rest with the "Bill of Rights", but instead it will be filled by commercial competition.

Opposition to the patients' "Bill of Rights" will undoubtedly arise from several sectors. This bill would also have a price tag associated with it; it would empower patients as consumers to have more autonomy in determining the health care they receive. In a way, it would move the health care system backwards, to a time when a patient could tell a physician what test he or she wanted. This freedom would result in higher premium paid by the employer. This attribute of the bill will encounter extreme opposition from representatives of small business interests as it signals an increase in employer output. Additionally, for-profit health care groups will also innately oppose this bill because of its potential to undermine the corporation's profit making abilities.

It was only a matter of time before an intervention by the government had to he made in assuring quality care for the patient. When the for-profit sector took over the HMO reform there were no guidelines set for the maximum profit and minimum care, leaving a for-profit corporation to determine the guidelines on its own. Since the only true mandate of for-profit corporation is to make profit for their shareholders, it is not surprising that the commercial medicine in U.S. has reached a level where patients' health became a function of a bottom line. The patients1 1'B ill of Rights" will not only protect the patients' rights in the current system, but it will also provide that last ingredient necessary for managed competition to actualize in the American Health Care Marketplace, an informed consumer.


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Casale, Paul N., Dr. "In-Hospital Mortality is Higher in AMI Patients Enrolled in an HMO". Online Report of the American Heart Association,, November 1997

Elsesser v. Hospital of the Philadelphia College of Osteopathic Medicine . C.A. No. 92-3045, United States District Court for the Eastern District of Pennsylvania, September 1992.

Findlay, Steven, "Holding HMO’s accountable", USA Today, August 6, 1997.

Hilzenrath, David S, "Costly Savings: Downside of the New Health Care". Washington

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Mitchell, Larry. "Butte Urged to Immunize Against Potential HMO Ills", The Enterprise-Record, January 21, 1996.

Rabin, Roni, "In Case of Emergency". Long Island Newsday, February 1996.

Riedel, Linda, "How an HMO Changed My Life", Posted at the HMO Page web site, August 19, 1997.

Rosenthal, Harry. "HMOs not Popular with Medicare Recipients", Today's Sunbeam, January 1996.

Ware, John E., et. al. "Differences in 4-Year Health Outcomes for Elderly and Poor, Chronically Ill Patients Treated in HMO and Fee-for-Service Systems". JAMA, October1996; 276:1039-1047

Utterback, Margaret J. "Mother dies after delays in care in Kaiser phone advice" California Nurses Association's Kaiser Casualty Of the Day, October 2, 1997.

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