saying NO to managed care
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Date: Fri, 4 Dec 1998 09:01:22 -0500 (EST)
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Subject: eleven.html
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Karen Shore, Ph.D.
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Eleven Unethical Managed Care Practices Every Patient Should Know About
(With emphasis on mental health care)
By Ivan Miller, Ph.D.
August 1998
Please photocopy and distribute this document widely.
Americans want more than affordable health care--they also want
ethical health care. Ethical standards are needed to protect patients,
to assure honesty, to maintain minimum standards of quality, and to
prevent the wasteful and fraudulent use of health care funds. Without
the safeguards of ethics, the health care system will be a financial
jungle where the quick and the powerful will have great economic
advantage over the sick and the vulnerable. Such a jungle is not a
place where anyone would go or send family and friends when
frightened, weak, sick or vulnerable.
As Americans are discovering, the managed care system often does not
give consumers what they want or need. Managed care's primary focus is
on cutting costs and raising profits; its concerns about ethics and
quality of care are only secondary. Although health care professionals
and the media report widespread unethical managed care practices, the
managed care industry is not correcting its ethical problems.
Consumers who learn about the unethical managed care practices will be
better equipped to navigate today's managed health care system. In
addition, something must be done to stop the moral decline in health
care. As Americans become more aware of the ethical problems in
managed care, consumers and professionals can join together and call
for an end to these unethical practices.
Eleven Unethical Managed Care Practices
1. Disregarding personal and medical privacy.
Health care ethics call for the greatest respect for patient privacy
and confidentiality. Privacy is especially important in mental health
because patients talk about sensitive and personal topics like being a
victim of physical or sexual abuse, drug and alcohol use, personal
sexual behavior, and family problems. Managed care, on the other hand,
disrespects privacy:
* True privacy and confidentiality means sharing sensitive, personal
information with a single, trusted professional chosen by the
patient. Managed care, on the other hand, usually requires sharing
private information with several people who are not chosen by the
patient, such as gatekeepers and utilization reviewers, and
storing it in files accessible to hundreds or thousands of
employees.
* True privacy and confidentiality means protecting records so that
they cannot be seen by anyone who is not involved in treatment.
Managed care, on the other hand, usually protects records only to
the extent of federal and state law which, in the case of
insurance records, is poor protection. In fact, insurance records,
under current laws, are at times even available to employers.
* True privacy and confidentiality means patients have freedom to
control, without coercion, who can see their personal and
confidential information. In managed care, on the other hand,
patients are often forced to give up all privacy as a condition of
using their insurance benefits.
2. Using false advertising.
Professional health care ethics set a high standard for truth in
advertising. Managed care, on the other hand, often engages in
advertising that deceives many consumers.
* Managed care, particularly in states that have so-called parity
laws, often claims that mental health benefits are unlimited, when
in reality, hidden policies and rules make even ordinary treatment
unavailable.
* Managed care often claims to provide all mental health services at
times when it offers only ultrabrief therapy -- a short-term and
frequently ineffective treatment.
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3. Using deceptive language.
Professional ethics emphasize giving patients accurate and
straightforward information. Managed care, on the other hand, uses
misleading language.at every level Companies which intentionally
restrict choice call themselves names like "Choice Health" or "Options
Health." Companies who are hired to restrict access to treatment call
themselves a name like "Access Health." Cost cutting programs are
called "quality improvement programs." Gatekeepers, hired to divert
patients from treatment, are called "patient advocates." Such
misleading language does not belong in health care.
4. Violating traditional scientific ethics.
According to scientific ethics, the research support for new
treatments must be reported in peer-reviewed journals so that the
community of science can debate the new treatments' potential
benefits, possible risks, and effectiveness. Even when the research is
conducted in secret, such as during the development of new medication,
before the new medication is given to patients, the scientific
evidence, research support, and description of the medication must be
publicly disclosed. In this way, patients are protected from hoaxes,
unscientific manipulation, and harmful treatments.
In managed care, on the other hand, new methods of delivering
treatment are decided according to secret and proprietary guidelines.
Managed care claims that these are scientific guidelines, but does not
reveal the guidelines or the supporting evidence. As a result, health
care scientists and professionals cannot independently evaluate if
science really supports the new managed care methods of treatment.
Using secret treatment guidelines is just as unethical as giving a
patient a secret medication.
5. Practicing outside of a professional's area of competence.
All ethical codes forbid professionals from practicing outside of
their area of competence. In managed care, on the other hand,
professionals are encouraged and, at times, even required to practice
outside of their competence.
* Because managed care limits referrals to specialists, it forces
many professionals to treat special problems for which they do not
have the training or experience.
* Utilization reviewers commonly do not have the credentials or
training necessary to confirm that they are competent to overrule
and change the decisions of the treating professional. For
example, in managed mental health, utilization reviewers often
have merely a bachelor's degree or a master's degree with limited
experience. These reviewers routinely overrule and change the
treatment decisions of greatly experienced specialists with a
master's or doctorate degree.
* A utilization reviewer's decisions may overrule the decision of
the professional who is conducting the treatment. However, the
reviewer's decision often is based upon the limited information
contained in a two page form and discussing a case for a few
minutes with the treating therapist. When evaluating the treatment
of a patient with a condition as complex as a mental health
problem, it is outside of all professionals' areas of competence
to overrule the treating professional based on such meager
information. Unless a professional conducts an in depth
evaluation, the most appropriate action is to defer judgment to
the person who is treating the patient.
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6. Creating and intensifying conflicts of interest.
Medical ethical codes require that health professionals avoid and
minimize conflicts of interest regarding their primary obligation to
the patient's welfare. Managed care, on the other hand, does just the
opposite. It seeks out and develops conflicts of interest in which
professionals profit the most when the patient receives the least
treatment.
The conflict is most serious with case rates and capitation in which
the professional is paid a set fee regardless of how much treatment
the patient is given. Competitive mental health case rates may be as
low as $200 per patient, regardless of whether the patient is seen
once or fifty times. If patients are seen for as few as an average of
eight one-hour sessions, simple arithmetic shows that a $200 case rate
yields $25 per session. After subtracting a modest overhead cost
estimate of $20 per session1, only $5 is left. That is too little to
pay the therapist for each session and paperwork. When case rates are
this low, professionals have a terrible conflict of interest because
they cannot stay in business unless the patient is given much less
treatment than is really needed. It is no wonder that the vast
majority of professionals refuse such contracts even when it may mean
leaving the profession or the financially risky option of working
outside of managed care.
While sometimes the conflict of interest is obvious as it is with case
rates, other times it is more subtle but just as harmful to the
patient. For example, professionals may avoid dealing with important
long-term issues or cut therapy short because managed care prefers to
refer new patients to therapists with a record of short-term
treatment. The therapist has a conflict here between treating current
patients for the necessary length of time, or cutting treatment short
to assure future referrals.
7. Keeping secrets about financial conflicts of interest.
Whenever the involvement of a third party creates a potential conflict
of interest, according to professional ethics, the professional must
fully disclose both the arrangement with the third party, and how it
may influence a patient's treatment. Managed care, on the other hand,
usually hides these arrangements.
* Managed care companies often pay a "case rate" or "capitated
payment" for each patient regardless of how much treatment the
patient receives. However, the company rarely reveals this
important payment arrangement to the patient.
* Many managed mental health care companies will stop referrals to
therapists who provide more than ultrabrief therapy, but patients
usually are not told their treatment is restricted by this hidden
managed care policy.
* Some companies have contractual "gag clauses" which forbid
professionals from giving patients any information that would make
the patient unhappy with their managed care company. Due to
intense public pressure, most companies have dropped these gag
clauses, but many still use what they call "managed care
unfriendly" behavior ratings which perform the same function as
gag clauses. These ratings are used to control therapists in the
following way. If a therapist commits an "unfriendly behavior," it
shows up as a low rating. Professionals are regularly notified of
the ratings, and low ratings serve as a warning that unfriendly
behavior may result in terminating the contract. The forbidden
"unfriendly behavior" includes even telling patients when they may
benefit from a treatment not paid by the managed care company.
Patients are not told that their therapist's professional freedom
is constrained by these rating systems.
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8. Violating informed consent procedures.
The rights patients have to control the treatment of their own minds
and bodies are protected through a procedure called informed consent.
In this procedure, patients are given the important information about
treatment and the major treatment options, and after being informed,
they can decide if they will consent to treatment and choose which
treatment.
Managed care, on the other hand, often fails to inform patients of any
treatment alternatives outside of the plan. This failure to inform
serves the purposes of the managed care company because patients who
do not know other treatment is possible are more likely to report
satisfaction with the managed care treatment. Unfortunately, this
failure to inform also undermines the patients' control, because the
patient looses the choice to self-pay for the preferred treatment.
* Medication is frequently presented as if it is complete treatment.
In truth, psychotherapy for many problems, either in place of
medication or along with medication, is better treatment than
medications alone, and psychotherapy is a treatment that many
patients will pay for out-of-pocket if they believe it will help.
* Patients who are sent to psychotherapy are usually told that
ultrabrief therapy is the treatment of choice, and if they don't
improve, they are told that there are no realistic alternatives.
The reality is that longer-term psychotherapy is a more effective
treatment, and many patients find it so helpful that they will
self-pay for longer psychotherapy.
* Patients, particularly children, are rushed through treatment,
either therapy or medication, without being informed of the
benefits of psychological and educational testing to evaluate and
diagnose problems. Again, some patients or parents choose to
self-pay for this testing when they know it is available.
9. Using "kickbacks" to keep patients away from specialists.
Most states have laws against medical specialists making hidden
referral payments called "fee splitting" or "kickbacks." An example of
such a payment occurs if a family doctor refers a patient to a
cardiologist for a cardiac evaluation and the family doctor receives a
hundred dollars "kickback" for the referral. This is illegal because
patients believe that referrals are based on their best interest,
when, in fact, the referrals are strongly influenced by the hidden
kickback.
In managed care, on the other hand, the family doctor is often the
gatekeeper and may be paid a financial bonus for avoiding referrals to
specialists. These bonuses violate the same ethical principle involved
in the laws against kickback and fee splitting. The non-referral may
appear to be based on the patient's needs when, in fact, the
non-referrals are strongly influenced by hidden kickback. Although
unethical, these bonuses avoid the laws that were specifically
designed to protect patients against kickback or fee splitting.
10. Squandering money entrusted to their care.
When insurance is sold, the company promises that it can be trusted to
handle the funds prudently in order to pay for health care. Managed
care, on the other hand, commonly spends over 30% of health care money
on administration and profit and pays its executives more than any
comparable sized industry. In mental health, managed care creates
administration and profit expenses that consume over 50% of the money
that was previously available for treatment. When money is entrusted
to a managed care company's control, it is not ethical to divert large
portions of the funds on the company's own administration and profit.
It is even worse that this financial irresponsibility leads to some
patients being prematurely discharged from hospitals and other
patients having their treatment ended before they have healed.
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11. Disregarding information about harm to patients.
Health care ethics require that professionals publicly report
potential harm from a treatment, attempt to evaluate possible harm,
and consider possible risks along with potential benefits when making
treatment decisions. Managed care, on the other hand, usually reports
only those statistics that show the benefits of managed care and does
not adequately examine of the potential harm to patients.
* Managed care has many policies that can have a negative impact on
patients but does not report evaluations of this negative impact.
For example, managed care executives have reported that the hassle
of going through gatekeepers will stop 10-20% of the patients from
seeking treatment. It is well known also that depressed and
shame-ridden patients are easily discouraged from treatment and
often need outreach rather than another barrier like a gatekeeper.
However, in spite of numerous reports that gatekeeper systems keep
patients from needed treatment, managed care reports do not
estimate the harm resulting from such barriers to treatment.
* When managed care considers cost effectiveness, it often does so
only on the basis of cost to insurance, not the costs to the
patients or their families. For example, when ultrabrief therapy
is used for the treatment of depression, fewer patients will
recover. The many patients who don't recover will suffer damages
through missing work, losing a job, a divorce, inadequate
parenting of their children, or suicide. Their families also may
need to take time from work and be less productive. Both the
patient and their family will suffer emotionally. However, when
reports about managed care cost-effectiveness decisions are
revealed, these reports do not consider these important costs to
the patients and their families.
* Managed care does not adequately assess its potential to increase
death rate. Human life and quality of life are simply not entered
into the managed care formulas for measuring the treatment
cost-effectiveness. The cost-effectiveness calculations show only
insurance expenses. As a result, these formulas actually indicate
that cutting expenses as a result of a speedy death is a
cost-effective disposition for any patient whose treatment will
cost more than their monthly premiums.
Managed Care Excuses for Unethical Practices
Managed care industry ethicists and lawyers created the following
rationalizations for the industry's unethical practices.
The unrestrained free market gives the greatest benefits.
Managed care claims that traditional health care ethics can be ignored
because free markets create the best systems. Unfortunately, managed
care is not a true free market and consequently, cannot give the
benefits of a free market. In a true free market, consumers need to
have power equal to the managed care company, but in health care,
consumers have lost much of their power for several reasons: (a)
employers, not consumers selects insurance policies; (b) consumers
can't change insurance when they are sick because a new company will
not treat pre-existing conditions; and (c) consumers can't get the
truthful and accurate information needed to compare managed care
companies.
Moreover, the history of managed care shows that the so-called free
market forces are not creating a better system. As managed care has
taken over health care, the quality of health care has drastically
declined. In places like California where managed care has operated
the longest, the system is not improving with time, but it is getting
worse with time. The free market is not working and should not be used
as a rationalization to abandon ethical and moral behavior.
Managed care has a higher ethical purpose, the greatest good for the
greatest number.
Managed care claims to be ethical because it purports to maximize the
health of a population rather than individuals. In other words, they
claim that because health care dollars are scarce, it is best to avoid
spending too much on one patient and make sure that the greatest
number of people are treated with the limited money.
This argument hides two important deceptions. First, managed care has
not been truthful about this purported higher ethical purpose. What it
calls "maximizing the health of a population" means rationing
treatment services--deciding that some patients will get needed
treatment and others will not. Yet, managed care does not tell its
beneficiaries that it is in the business of rationing services. In
fact, it advertises just the opposite, complete and comprehensive care
without rationing. If managed care believes that it is serving a
higher ethical purpose by rationing care, it should truthfully
advertise that it is rationing treatment, and stop saying that it
provides all recommended treatment.
Second, if resources are scarce, it is not ethical for managed care to
squander vast resources on administration, profit (often over 50%) and
enormous executive salaries, while patients are dying.
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Managed care should not be required to follow ethical behavior because
no one does.
When confronted with ethical abuses, the managed care industry defends
itself by saying that fee-for-service health care had some abuses as
well. It argues that because everyone does unethical things, focusing
on managed care ethics is unfair.
First, this argument does not consider the degree of abuse. It is
similar to justifying grand larceny on the basis that some have
committed petty theft. The severity of ethical abuse in managed care
is enormous compared to the problems that occurred previously in
fee-for-service medicine.
Second, it is not true that everyone does unethical things. In fact,
most professionals are highly ethical. If professionals are behaving
unethically, they should be confronted as should the managed care
industry.
Professional ethics committees have not punished managed care
professionals, and therefore, they must not be unethical.
Each profession has an ethics committee that passes judgment on
complaints against members of their profession. Unfortunately, these
committees have not been able to control ethical behavior in managed
care. Professional ethical codes are usually written in vague language
that is intended to encourage voluntary compliance, and they are not
designed to catch clever violations of ethics. Consequently, while
many managed care practices miss the spirit of the ethics codes, there
may be nothing specific enough in the ethical code to warrant a
judgment against managed care professionals.
In addition, these committees can only hear complaints against
individual professionals who work for managed care, not the managed
care companies themselves. Professional leaders and ethics committees
are concerned that ethical judgments against individuals will only
harm the professional who must work in the managed care industry in
order to make a living. As a result, the professions have been
reluctant to use their ethical codes to address the problem2.
Fortunately, professional ethics committees are not the only ones who
have the right to determine ethical behavior. Every person can tell
the difference between right and wrong. The public, consumers,
patients, and individual professionals can speak out when something is
wrong. These eleven common practices are not the behavior that most
people want from health care professionals, and even though the
professional ethics committees may not be able to stop the behavior,
the public can still protest.
Consumers want managed care to continue its cost cutting practices.
Managed care says that surveys report consumers don't want government
regulation and reform if it raises the cost of health care. Therefore,
the industry argues, consumers approve of its practices without
regulation. However, the truth is that these surveys do not ask
consumers if they approve of cutting costs by using dishonesty and
unethical methods. Saving money is consumer issue, but generally, the
consumer wants only honest and ethical cost cutting.
The market makes us do it.
This argument is the economic version of "the devil made me do it."
Absolving themselves of responsibility, most managed care leaders
claim to be passive victims of market forces. They say that the only
programs that can be sold to employers are ones that use these eleven
unethical methods of cutting costs. Such an argument misses the point
of ethics. Ethical and moral standards are intended to be guides to
conduct in addition to money and market forces. If money is
everything, then cheating, lying and stealing are all okay as long as
one is not caught.
Furthermore, managed care has not been passive. The industry is
actively promoting itself and influencing the market. It actively
hides these ethical abuses. When legislation or regulation is
proposed, the industry aggressively opposes efforts to restore ethical
principles to health care. The truth is that managed care is not a
victim of the market, but it has actually made the market the way it
is.
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How can managed care continue this unethical behavior?
The managed care industry has used its power to convince business and
government that there is no other choice to contain health care costs
except managed care. State and federal governments believe that they
need managed care methods to contain Medicaid and Medicare expenses in
order to balance their budgets. The business community is frightened
of escalating health insurance expenses and believes that only managed
care will stop the cost escalation. As a result, the big players have
a financial interest in believing managed care will work, and
consequently, they have overlooked the severity of managed care
ethical problems. Unfortunately, the industry's tremendous profits
enable it to continue to promote itself, and manipulate the government
even more.
In reality, managed care is not the only choice to control costs.
Ideas for alternative cost-containment systems that respect ethical
values are being developed. Managed care not only uses unethical
practices, it is the least efficient system. The enormous
administration and profit expenses take more money away from treatment
than would be lost in any other system that could be developed today.
Two grass roots movements, the National Coalition of Mental Health
Professionals and Consumers, Inc. and the Ad Hoc Committee to Defend
Health Care, are calling for an end of managed care and the
development of a pro-consumer cost-containment system for health care.
What Can the Consumer Do?
The first step in righting any wrong is speaking out and saying that
it is wrong. Making a statement about what is right is a powerful
beginning whether confronting slavery, segregation, McCarthyism, child
abuse, drunk drivers, marketing cigarettes to our children, or the
mistreatment of the vulnerable patients of managed care. Many of these
historical examples of immoral behavior were ignored by large
organizations, big business and government until large numbers of
concerned citizens confronted them, spoke out, and demanded that the
immoral behavior be stopped. The process of speaking out begins by
talking to individuals, and then moves to public speaking and writing.
The public and professionals can make appeals to the health care
professional ethical boards. These complaints should be filed with the
request that the board issue a decision that restores the high
standards of ethical behavior to health care. Although initially it is
unlikely that these boards will make any ruling that adversely impacts
a major financial interest within the profession, they will respond
eventually to public pressure.
Some change will come through the malpractice lawsuits. While ethics
are different than illegal behavior, unethical practices can be used
to show that treatment was below the standards of good practice and,
consequently, can raise malpractice judgments.
The greatest immediate impact will come through the media. Journalists
are sensitive to the unethical treatment of the sick and vulnerable
patient and will help create public pressure on the managed care
industry.
As public pressure builds, it can eventually overpower the lobbying of
the managed care industry and relief can be obtained in legislation.
The electorate can change public policy.
Although, as one individual, a person may feel powerless, many people
joining together in a consumer and professional movement offers the
greatest hope of changing the current system that is putting corporate
profits ahead of honesty, ethics, and quality health care. Together we
can begin by speaking out and saying that these eleven practices are
unethical and wrong. We can say, "Stop it!" We can overcome the
ethical abuses of managed care.
_________________________________________________________________
Join with the people who are leading the battle to expose managed care
abuses and are doing something to create a pro-consumer health care
system.
The National Coalition has effectively alerted the media about the
abuses in managed mental health care. Now it is working to tell people
that a pro-consumer system is possible. No amount of regulation can
ever make the managed care system ethical, and the enormous
bureaucratic expenses of managed care make it the most inefficient
system possible. America needs to build an ethical and pro-consumer
health care system that controls costs while preserving consumers'
rights to choice, privacy, and control over health care decisions.
We are a membership organization like National Public Radio. We need
your membership to keep broadcasting our message.
Call 1-888-SAY- NO MC (1-888-729-6662) and ask for membership
information.
or click here for Membership Registration
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11725
Telephone: 1-888-SAY-NO-MC (1-888-729-6662) or 1-516-424-5232
Fax: 1-516-549-3942
Direct E-mail to:
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hba...@ix.netcom.com
and those dependent upon government any different? Reality is that there
are good and bad providers. The solution is to lobby for more effective
oversight and the abiliy to more easily sue for hmo negliegence (gee I
can see the lawyers tail wagging.)