To print this page, select "Print" from the File menu of your browser salon.com > Health & Body Nov. 12, 1999 URL: http://www.salon.com/health/log/1999/11/12/unitedhealth Letting docs decide UnitedHealth Group will give doctors outright control over patient care, making the HMO attractive to the 8 million government employees now eligible for open enrollment. - - - - - - - - - - - - By David McGuire Proving once again that there's nothing quite like a legislative threat to grease the wheels of corporate altruism, HMO giant UnitedHealth Group earlier this week announced that it would give physicians outright control over all patient care decisions. With federal managed-care reform legislation looming and the economic basis for micromanaging physicians eroding, other HMOs may soon follow suit, observers say. "Winston Churchill said, 'In the long run, Americans will always do the right thing -- after exploring all other alternatives.' That is so much the case in the American health-care system," says Princeton University health-care economist Uwe Reinhardt. "Eventually these people will realize that [the pre-authorization model] buys them ill will and costs them too much money," he added. United's announcement -- which came conveniently one day after the start of the federal government's open-enrollment period, during which 8 million government employees will be allowed to switch their health coverage -- has resulted in a deluge of uncritical press for the HMO giant, and has set combatants on both sides of the managed-care debate into full spin mode, molding the news to support their widely disparate positions. "The market has been leading and is ahead of legislation," says Karen Ignagni, president of the American Association of Health Plans (AAHP), the managed-care industry's most visible trade and lobbying group. A recent AAHP member survey supports -- to a large extent -- Reinhardt's predictions about the decline of pre-authorization, Ignagni adds. While "it's not going to be a one-size-fits-all" approach, "a number of plans are going to reduce their procedure-by-procedure" involvement with physician decision-making, Ignagni says, citing preliminary findings of the survey. The survey, which Ignagni says was initiated long before United's announcement, polled a number of HMOs on the subject of pre-authorization. Full results of the survey will be released in the next few months. Advocates of managed-care reform have a different take on the United decision. "The other side has given up tremendous ground and we are winning," says John Stone, a staffer for Rep. Charlie Norwood, R-Ga. "The other side would say: 'See, the managed-care industry is coming around through free market means.'" But, Stone warns, "as soon as we announce that the conference report is dead, [United] can turn around and reverse [its policy]." Norwood was the principal author of the Norwood-Dingell "Patients' Bill of Rights" legislation that passed the House of Representatives 275-151 last month. That bill is set to go to conference with a more lenient Senate managed-care-reform package. The passage of the Norwood-Dingell bill -- which, among other things, would give patients the right to sue managed-care companies that deny them access to care -- played a "very large role" in United's decision, Stone contends. "Because of their decision, United, under the Norwood-Dingell bill, would remain entirely shielded from all litigation," Stone says. The ironic thing in all of this is that United and other health plans may actually save money by scrapping their controversial pre-authorization measures, Reinhardt says. "If you supervise every doctor's [decisions] but turn down only 1 percent of their proposed treatments, then obviously you are losing money." Ignagni confirms that the average HMO approves 97 percent of all physician treatment recommendations. At the same time, managed-care companies maintain huge staffs to evaluate those recommendations. "They [United] have seen in their records [that they were spending] $100 million a year to deny $20 million a year worth of coverage," Stone asserts. Far less expensive than pre-authorization is the "profiling" method that is being adopted by United, Reinhardt says. Under a profiling approach, a health plan gives physicians more or less free reign to make care decisions and then examines those decisions at intervals to identify physicians who don't hold to accepted care practices. "If a physician ... winds up being a very heavy prescriber of an expensive antibiotic or orders a lot of MRIs, then that physician will be taken aside" and spoken with, Reinhardt says. "Its much cheaper to do and just as effective." United representatives could not be reached for comment on this story. salon.com | Nov. 12, 1999