It hasn’t always been easy for those in the health insurance industry to stand by HMOs. Thanks to a number of factors, including some over-the-top Hollywood feature films, the public image of HMOs has not always been positive.
However, the effectiveness of HMOs as vehicles capable of containing health care costs while delivering quality health care has never diminished.
“John Q,” a 2002 film in which Denzel Washington stars as a man who takes over a hospital emergency room by force when his HMO refuses to pay for his son’s heart transplant, represented a high-water mark of sorts for anti-HMO image-making. With a distorted, villainous image like that, how long could HMOs survive?
As it turns out, HMOs are surviving quite nicely, and the future seems bright. HMOs may have appeared to be an endangered species at the turn of the 21st century, but at the midpoint of the century’s first decade, they are far from dead. In fact, evidence points to HMOs being more accepted by the public than ever before.
In an August 2004 survey conducted by the National Opinion Research Center (NORC) at the University of Chicago, a majority of respondents indicated that they were in philosophical agreement with many of the basic tenets of managed care.
* 54 percent said they thought requiring substitution of less costly drugs was either a good or a very good idea.
* 52 percent said they thought having to get a referral to see a specialist was either a good or a very good idea.
In addition, 43 percent said they would support prior approval for new and/or expensive treatments. Gatekeeper features of this kind were long cited as reasons members were dissatisfied with their HMOs. The 2004 survey indicates that many people not only accept the restrictive aspects of managed care but that they also understand the reasons behind those aspects.
“The managed care backlash is easing up,” says Claudia Schur, principal research scientist with NORC. “That is probably because consumers are feeling the pinch of rising costs themselves.”
Schur says that support for managed care is “quite segmented,” and determined largely by an individual’s health care experience and needs.
A number of managed care organizations were able to help change attitudes about HMOs by reshaping plan offerings. Health plans responded to the public’s early negativity about HMOs by removing obstacles that members found obtrusive.
This meant offering more PPOs (Preferred Provider Organizations), in which there are fewer limitations in terms of network use and specialist visits. In recent years, we have seen a rise in consumer-driven health plans such as flexible spending accounts, health reimbursement arrangements and health savings accounts.
Essentially, health plans are offering greater freedom of choice to those consumers who are willing to pay for it. Health plans can still charge lower premiums on HMO plans for those who are willing to accept some limits on their care.
Consumers have become more comfortable with HMOs because they understand that the restrictive parts of these plans are designed to serve a greater good — controlling health care costs. In the early 1990s, when the economy was growing faster than medical costs, criticism of HMOs was at its highest.
Since 2000, when the economy slowed and medical inflation (including the cost of prescription drugs) was on the rise, the public has come around to the concept of HMOs as a method of containing spiraling costs.
The entire concept of managed care is seen in a different light by employers and consumers, in part because managed care organizations have done a better job of publicizing the things they do well. As Susan Pisano, vice president of communications for America’s Health Insurance Plans, points out, these include “promoting affordability, putting prevention on the map, emphasizing good care for patients with chronic disease and advocating evidence-based medicine.”
Successful disease management programs, innovative product plans and an understanding of employer and member needs have always been part of successful HMOs. They also help explain why HMOs have not and will not fade from the health insurance scene.
Ronald J. Vance is vice president of sales and marketing for UPMC Health Plan. The Health Plan, with 440,000 members, is part of the University Pittsburgh Medical Center’s integrated medical delivery system and is the only provider-led health plan in Western Pennsylvania. Reach him at (412) 454-7642 or [email protected].
