HMO Execs Debate How to Heal Their Image
By Dorothy Guellec

Quietly HMO top brass have been meeting in Texas to find ways to improve
“their battered public image.” They are divided as to how to do this. The
three big ones United Health Group, Kaiser Foundation Health Plan and Humana
suggest industry wide changes that would restore physicians to their
rightful place making treatment decisions, while the other CEO’s favor a
multimillion-dollar PR campaign. The companies are split as to what to do
but they all see the drastic drop in stock values. They are also worried
that Congress will pass legislation containing a patient bill of rights
sometime this year. The CEO’s of the nation’s 15 largest managed-care
companies began meeting in the fall of 1999. The decline in stocks of all
the managed care companies has not been discussed in Dallas, according to
two officials who have attended, rather the goal is “a recognition that you
need to have public approval and public trust, and a desire to build it,”
says Roger Bolton, an Aetna senior vice-president who is president of the
Coalition for Affordable Quality Healthcare.

Bolton’s group of managed-care companies and related trade associations,
formed two years ago to promote “a better perception of managed care, has
been working with the 15 CEO’s since they began meeting in the fall of
 1999.” The Business Week article continues to say “last year the coalition
spent $10 million on TV and print ads. But the PR campaign hasn’t done much
to blunt criticism of the managed-care industry.” The ads have done little
to stem the flow of lawsuits, including 17 class actions filed since
October. The heads of such giant companies as Aetna, WellPoint Health
Networks, Group Health Cooperative of Puget Sound, Cigna, PacifiCare Health
Systems are considering spending as much as $40 million on an advertising
blitz. Analysts think such a move would be “cosmetic”. Todd Richter said “it
’s taken them 20 years to get into the predicament they’re in now, and it
can’t be reversed in a short period of time.”
Massachusetts, on the other hand is genuinely trying to heal this industry.
The Committee to Defend and Improve Health Care filed a proposal to be on
the November ballot in Mass. In order to succeed 57,100 signatures are
needed, but they are well on their way according to economist Rashi Fein. I
reached him on Sunday February 13th. Lead signers include

Dr Bernard Lown, winner of the 1985 Nobel peace prize and the chair of the
Committee To Defend & Improve Health Care

Karen Daley, President of the MA Nurses Association

John Kenneth Galbraith, economist and author

Rashi Fein, member of President John F. Kennedy’s Council of Economic
Advisors

Dr. Mitchell Rapkin, professor of medicine at Harvard Medical School, CEO of
Care Group, Inc., former president of Beth Israel Hospital

Peggy Charren, founder of Action for Children’s Television

The purpose of this act is to ensure that there will be access to health
care for all Massachusetts residents, including strong patient protections
and a bill of patient’s rights.

Section 2 of the act provides for a patient centered system to be in place
no later than July first, 2002. HMO’s would be required to abandon most
efforts to control costs. Closed networks would be banned, so patients would
be guaranteed the right to freely choose their health care providers, to
have second opinions and to appeal denials of care. Additionally, patients
would have the assurance that health care personnel would act solely in the
patients’ interests. Plans’ and insurers’ administrative expenses would be
capped at 10% of revenues, with the other 90% mandated to be spent on
patient care, for-profit HMO’s would stop selling in Massachusetts. A
moratorium on conversion of nonprofit care insurers and hospitals to
for-profit institutions would be declared until all the other provisions of
the bill were met.

Of course this is a broad act, and I could not outline all the provisions in
a commentary, but Massachusetts, it seems, has paved the way for big
changes. The Legislature has the option until May 3rd to pass the law
itself, or try and satisfy the zeal and hard work of the petitioners with a
watered down version. If it fails to do so, and if the petitioners collect
another 10,000 signatures, which seems a foregone conclusion (remember they
collected 57,100 to get this far) the measure will be on the ballot in
November.

We all know where this effort came from. It started 4 or 5 years ago and now
there is growing anxiety, despair and anger from patients, physicians,
nurses, everyone except shareholders, the CEO’s of HMO’s and those who
persist in thinking that government has no place offering services in a
democracy. What a challenge – to try and “supplant capitalism with
democracy.” History is clear in this, an expression of the collective will
of the people, at least in Massachusetts, on controversial issues of
importance to the community can make all the difference. I believe that some
civil disobedience is inevitable.

It certainly worked in the 60’s to halt our illegal and unethical
participation in Vietnam. Recently it worked in Seattle. An expression of
the collective will to contrast with savage capitalism. The fictions of the
market system are focused upon individual transactions, giving a few ride to
capital, while disregarding society and the environment as mere
“externalities”.