Breaking Away by Elvira Maricic A growing number of physicians are leaving traditional managed care plans for independent, cash-for-service practices, but is this a healthy move? print article      send to a friend

One of the ways many of them have decided to deal with the situation is to remove themselves completely from a system they consider to be, in the words of one physician, "damaged care."

Dissatisfied Doctors

"Every time I drop a managed care contract my life improves, my patients improve, and my practice runs better," says Thomas LaGrelius, president and founder of Northern California based Independent Doctors Traditional Practice Association of the South Bay (INDOC). "It's becoming more and more obvious that [managed care] is unmanageable, impossible, and unworkable, and that it's going to bankrupt the health care system and destroy the care for everybody."

INDOC, founded in 1997, has 110 members in the South Bay area. LaGrelius doesn't accept any HMO plans. While he does accept some PPOs, most of his patients go out of network to stay with him and use their point of service option. This means that they pay a certain percentage, which in many cases is 30%. For patients who take care of their bill at the time of their visit, LaGrelius offers a 20% discount. 

LaGrelius is in good company when it comes to being dissatisfied with managed care. According to the 15th annual Health Care 2000 report released by Deloitte & Touche (New York) and VHA Inc. (Irving, Texas), most physicians fail to see an improvement in their financial performance when contracting with HMOs. The report also noted that 58% of physician practices feel that managed care has negatively impacted their overall financial success.

"The lack of financial success by physicians dealing with health plans is symptomatic of an industry as a whole that is still unable to manage costs. And we are finding that the price of health care for providers and buyers is expected to continue to rise substantially over the next several years," says Merlin Olson of Deloitte & Touche.

Additionally, a study by UCSF researchers has found that when managed care organizations offer bonuses and financial incentives to physicians, the quality of care that they give to their patients may be compromised.  The study, titled "Primary Care Physicians' Experience of Financial Incentives in Managed-Care Systems," was led by Kevin Grumbach, UCSF associate professor of family medicine and health policy and Chief of the Department of Family and Community Medicine at San Francisco General Hospital Medical Center (SFGHMC), and Andrew Bindman, Associate Professor of medicine and epidemiology.

The study analyzed mail-in surveys completed in 1996 by 766 primary care physicians who practiced in HMOs or had HMO contracts in California's 13 largest urban counties. Findings include:

.       75% (575) of doctors felt pressure to see more patients per day and 24% of those believed such pressure compromised patient care

.       57% felt pressure to limit referrals and 17% of those believed the pressure was "sufficiently severe to compromise quality of care"

.       38% of the doctors surveyed (291) were subject to financial incentives to control costs

.       28% reported feeling pressure to "limit what they told patients about treatment options"

"Physicians appear to be motivated more by positive rewards for practicing good quality care than to be paid off to withhold care," Grumbach says. "Some of the more restrictive payment incentives raise concerns about quality of care as well as physician satisfaction." According to the researchers, high quality care is unlikely to flourish in an environment that leaves physicians demoralized and leads many to believe that the standards of care have been compromised."

Unfulfilled Promises

Not every physician is dissatisfied with managed care or is interested in dropping it altogether. "If I were the consumer, I'd be upset, because independent physicians really don't have an incentive to keep them healthy," says an Iowa physician who didn't want his name used. "The more patients they see in a fee-for-service setting, the more money they make. And the insurance companies are in a win-win situation either way--if they have to pay out more, they just raise their premiums," he says.

However, Jack Valancy of Jack Valancy Consulting in Cleveland Heights, Ohio, says he can understand why some doctors are breaking away from managed care. "It's a growing trend and sort of a prediction (for the future). What I'm seeing is that physicians are reasserting their independence and autonomy because they realize that a lot of the promises that were made to them back 10 years ago have not been fulfilled," he says.

"Physicians find themselves in unsatisfactory situations and they're saying 'No, I'm not happy in a spot where I've got to work for peanuts for a managed care plan.' They're weaning themselves from plans that don't reimburse very well and from unsatisfactory working arrangements. I think it's pretty dynamic," Valancy adds.

Simplify, Simplify

Another option for dissatisfied doctors is Seattle's SimpleCare, a cash-based approach to health care.  SimpleCare allows patients to substantially reduce their patient charges by making payments in full directly to the doctor at the time of service.

SimpleCare doctors say they provide personalized, quality healthcare while patients are saving anywhere from 35 to 50% because the doctors have no diagnoses or procedures to code, no referrals to get approved, no bills to send, and no insurance forms to prepare.

Patients can join the SimpleCare network for $20 per individual and $35 per family and are charged for the length of time they actually spend with the doctor, not based on why they see the doctor. Instead of the 7,500 codes a doctor uses under the current insurance billing system, doctors see and bill patients for either short, medium or long visits. A physician can join the network as a provider for $35 per year.

"For those 50 million uninsured individuals in our country or for those who have high-deductible insurance, SimpleCare is a potentially huge solution," says Vern Cherewatenko, MD, chairman and co-founder of SimpleCare. "By cutting out the administrative waste of dealing with insurance companies, and freeing medical practitioners to practice their individual skills, we can assure that the flow of health care dollars goes to actual patient care rather than to the unnecessary administration of that care."

While SimpleCare does not advocate the abolition of health insurance, it does encourage patients to consider switching to using its service together with high-deductible major medical insurance to cover catastrophic illness.  "Most of us never spend on health care in a year the amount we pay in health insurance premiums. In fact, 89 percent of Americans do not spend more than $2,000 on health care per year and 33 percent of Americans spend $0 per year," Cherewatenko says.

That Certain Feeling

In the end, it comes down to making a choice about quality of life, Valancy says. "A lot of physicians who wean themselves from managed care find that although they're making less money (some physicians are actually making more money, which is very gratifying) . . . they are more satisfied."