Health Against Wealth - HMOs and the Breakdown of Medical Trust by George Anders, Houghton Mifflin Company, Boston, 1996, xii & 299 pages, $24.95

Review by Del Meyer, MD

George Anders, a Wall Street Journal staff reporter since 1981, has been covering the intersecting worlds of medicine and money since 1993. In Health Against Wealth, he tells the personal story of his lifetime insurance coverage and non-coverage, his understanding of health care and insurance issues, a background concerning the problems with the past and current systems and his perspective in how to manipulate and live with them.

Anders begins with a horror story of the small baby whose parents were advised by the 24-hour nurse-advice hotline to go to an HMO-contracted hospital 42 miles past other medical centers. The infant suffers cardiac arrest, is resuscitated, and suffers brain damage from meningococcemia. Multiple amputations ensue resulting in a catastrophically handicapped child who will lead a tragic life despite a $100 per hour lifetime jury award. Clearly an HMO problem that doesnít occur with standard insurance or medicare.

In the second chapter, Anders give us the account of Allied Signal Corporation which some feel heralded the onset of managed care in 1987. Edward Hennessy, its long-time chairman, recalls the moment when soaring health costs finally prompted him to slam down his fist and declare, "Enough!" as he learned that employee health care costs were climbing 39% a year. He asked for all the employees medical bills that topped $100,000. When he saw the size of the stack, he revised it to, "Show me the bills that are $250,000 or more." He reviewed these folders containing an endless barrage of tests, exams, and therapies. He noted that even when death was imminent, bills kept piling up, while the insurers hired by Allied Signal to administer this system did little to hold down cost. Ultimately, all these medical expenses were passed on to Allied Signal as premium increases which then became direct costs. From that moment on, Hennessy crusaded for change. "If we donít fix this ourselves, [corporate raider] Boone Pickens is going to fix it for us," he told his subordinates in early 1987. When his head of human resources delicately explained how he hoped to slow health care costs to a 15% increase, Hennessy snapped, "Thatís unacceptable! Come back and tell me how itís going to be zero." They invited a dozen big insurers and health plans to compete for the chance to put most of Allied Signalís 76,000 workers, as well as their dependents, into managed care. There was no transition period. Workers were put into the new plan immediately in 1988. One after another, companies recoiled in horror to open-ended health plans that allowed employees to draw upon the most that American medicine could offer at hardly any direct personal cost.

Anders states, "This 'businessmanís revoltí was more than a money-saving issue; it had emotional and moral overtones as well. The companies that aggressively opted for managed care did so partly from a belief that doctors and hospitals, unsupervised, simply couldnít be trusted any more... Health experts debated whether the huge American buildup in hospital-based medical technology--far beyond what existed in any other country--actually helped patients or simply helped providers get rich. As corporate payers began studying the health-care market in greater detail, they often convinced themselves that the savings offered by managed care not only benefited their own companies, but might actually be better for society at large."

Anders then traces the trend to managed care as 20 million Americans were rapidly nudged into HMOs. He outlines the flow of power from doctors and hospitals, even the best and most trusted ones, into the hands of insurers who ran these tight fisted programs. He covers several of the problems including gatekeepers, non emergency visits to the ER, dealing with mental health, quality, and gives his perspective on dealing with, not building a better system.

He then concludes with an optimistic note: "Eventually the pioneers of the HMO industry may be viewed much like the corporate raiders of the 1980s. That is, they will be seen as intensely provocative "change agents" who briefly seized control of a big piece of the economy but faded from the scene as society found a more palatable way of carrying out that mission. We are only partway through that cycle; HMOs continue to lambaste doctors and hospitals for wasteful ways, just as raiders stormed into corporations in the mid-1980s... at some point doctors will figure out how to run a cost-effective medical system without abandoning compassion... at that point the swashbuckling middlemen will be left with much less to do."

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Editorially cut from Anders Book Review:

As a child my family had coverage with Blue Cross. When I went to medical school, I had my own BC policy which cost me about $30 a quarter. When I had my own practice, I continued with BC and purchased it for all my staff. When the premiums increased to $500 a month, the costs escalated to about $2000 a month for my employees and myself. When the cash flow wasnít there, my bookkeeper didnít send out the checks for a couple of months before I realized I couldnít afford unlimited private fee for service insurance. By the time I got the situation resolved, I owed BC $10,000 in premiums. I convinced BC that none of my staff had used their BC card and they canceled the past due premium. I reduced my office premium for myself in half by going to BC prudent buyer plan.

I now have Blue Shield Preferred Provider plan. (Was there really anything besides BC/BS until recent years?) I pay the first $250 per member of my family and 10% of all additional costs. The premium is $250/mo above the BS HMO rate. It allows me to see my personal endocrinologist and otologist yearly, my cardiologist every four years for an exercise ECHO, my gastroenterologist every four for endoscopy, my allergist for immunotherapy, and my orthopedist for arthroscopy without any hassle for the extra $3000 per year--truly a bargain. With the 25 percentile physician income at about $100,000. with healthcare at 15% of the GDP and assuming that one-third of that is paid with taxes, would suggest that our prorated health care costs would be about $10,000 per doctor, the very mechanism by which we all make our living. If we invest less than this, then we must not believe in what we do. If we donít believe in what we do, do we have a right to do it? When I tell patients they are much too sick to have an HMO and should get a PPO, they inform me that their employer doesnít have a PPO plan. If their employer has a PPO, they tell me they canít afford it. They would rather do without a few of the benefits to have any insurance. They donít mind the hassle and can afford the time to appeal any decision. In fact, many enjoy the hassle. The only problem is that they expect me to write all the letters on their behalf. They think they minimize the work by saying, "Donít bother with it now, Doctor, just do it after work when you have more time." Time that no insurance carrier recognizes as patient related. (Lawyers can work on your case in the bathroom and still bill you for time spent on your behalf.) On the other hand, I appreciate the fact that I can now provide my employees an HMO coverage for less than $100 a month.