Everybody hates HMOs. They’re inflexible, they deny care, they turn medical professionals into bean counters. Conceived decades ago as a way to focus on preventing illness, they now dump the sick.
You might expect that for-profit HMOs would give better care. After all, competition between profit-seeking retailers serves the common good in other walks of life. It gives us plenty of nutritious food, ever-cheaper computers, and–once the government put its foot down–cleaner cars far cheaper than anticipated. The investors may get rich but we all end up better off.
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But the numbers didn’t come out that way. The JAMA article shows that for-profit HMOs gave lower-quality care than nonprofits in all 14 ways measured. Of two-year-olds in not-for-profits, 72 percent had had all their shots, compared with 64 percent in investor-owned HMOs. Of women in their 50s and 60s in not-for-profits, 75 percent had had mammograms in the previous two years, compared with 69 percent in for-profits. Of heart patients in not-for-profits, 71 percent had been given beta-blockers, compared with 59 percent in for-profits. Of diabetics in not-for-profits, 48 percent had had eye exams, compared with just 35 percent in for-profits.
The authors conclude their article emphatically: “The decade-old experiment with market medicine is a failure. The drive for profit is compromising the quality of care, the number of uninsured persons is increasing, those with insurance are increasingly dissatisfied, bureaucracy is proliferating, and costs are again rapidly escalating. We believe national health insurance deserves a second look.”
Regardless of what the JAMA numbers mean exactly, they highlight the uncomfortable tension that has always existed in medicine between professionalism and getting paid. A generation or two ago, most doctors worked alone and were paid a fee for services rendered. When in doubt, they had a financial incentive to overtreat patients (more services equal more fees). Cost played little or no role in their thinking. The earliest managed-care programs were community-based cooperatives that sought something better, like the Group Health Cooperative of Puget Sound, founded in 1945. In essence, a local group of patients would hire a group of doctors on salary. Such a system reduced doctors’ incentive to overtreat. More important, it encouraged everyone to save money through preventive medicine, patient education, and cooperation among doctors to deliver the best care.
Why has it been so hard to make the market work for everyone’s benefit in health care? For one thing, says Woolhandler, there’s not that much competition between HMOs: “At best you have oligopolies,” a small number of companies that carve up the market among themselves. And even when HMOs do compete, the buyers in the marketplace are employers, not individuals. In theory your employer would like you to be healthy, but in practice what your employer shops for may not be what you would shop for. So you rarely have a chance to send a signal to the marketplace by choosing United instead of Humana or vice versa–your bosses already sent their own signal.
