Ethics and Managed Care

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Ethics and Managed Care

• Where did it go wrong? (If it did?)

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Louis Harris Poll, 1980

• 97 of HMO enrollees satisfied, would renew
• 30 of non-members find HMO concept very
  attractive

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WARNING
The following slide contains adult language.
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Fucking HMO bastard pieces of shit!
--As Good As It Gets (1997)
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You know youve joined a cheap HMO when..They
give you Viagra tablets in different colors with
little ms on them.
--David Letterman
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What is managed care?

• Same organization combines two functions
• Insurance
• Delivery of services
• Specified, covered population
• Prospective financing of services from a limited
  budget
• Buchanan, 1998

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The first HMOs

• 1940s
• Either labor union-driven or community
  cooperative (all non-profit)
• Payment per member per month (capitation)
• Financial incentive to keep people healthy
• Group practice/clinic model

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Turning Point 1970-1980

• Health care share of GDP went up from 4 to
  10-12 since 1945
• Big Three realized they were paying more on a
  per-car basis for health care than for steel
• For first time, HMOs attractive as a way to cut
  costs, not as a way to change the direction and
  quality of care

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1980-2000

• New Federal legislation encourages creation of
  HMOs
• Some evidence early that this led to a slow-down
  in rise of health costs (temporarily)
• Suddenly for-profit managed care is the fastest
  growing segment of industry

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Kaiser plan, 1970

• Has served same population for 30 years
• Very stable group of physicians and staff
• Most work there out of choice
• Work as team to assure that quality of care is
  kept high
• The competition is very wasteful, so even a
  modest trimming of costs makes Kaiser the best
  deal

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Acme HMO, 2000

• May have been created yesterday
• Physicians are tied in virtual network, no
  history of teamwork
• Rapid turnover of patients, no way to capture
  savings from preventive care
• Competition lean and mean cant compete unless
  costs cut to the bone

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Does the term managed care specify an entity
with a constant, predictable set of ethical
problems?
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Basic ethical problem

• Physician or nurse as gatekeeper
• Gatekeeper may recommend care as medically
  necessary or not
• Plan pays for medically necessary care
• If less care recommended, staff may make more
  money (or may be retained, not fired)

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• Rationing
• Bedside Rationing

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Rationing

• There is a limited amount of resources available
• Need/demand exceeds the available resources
• We must have SOME system to decide who gets how
  much
• Ability to pay
• Lottery
• Degree of need
• Etc.

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Where Rationing Occurs
Administrative Level
Bedside Level
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Administrative Rationing

• Policymakers set very general guidelines based on
  data of effectiveness and cost
• Physicians at bedside merely apply those
  guidelines with virtually no discretion
• Examples
• No one over age 70 gets renal dialysis
• No one gets expensive anti-ulcer medication for
  more than 2 months

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It is society, not the individual
practitioner, that must make the decision to
limit the availability of effective but expensive
types of medical care.
--Norman Levinsky (p. 102)
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Bedside Rationing

• Physician/nurse caring for individual patient
• Makes a decision not to provide some treatment
• Decides on basis of relative need of this patient
  vs. other patients in plan

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Trust and Rationing

• Levinskys argument
• If administrative rationing, physician is still
  uncompromising in personal dedication to patient
  welfare
• If bedside rationing, physician a double agent--
  willing to compromise patient welfare in name of
  cost saving or service to society ( other
  patients)

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Fee-for-service practice

• Patient (or insurance company) paid a set amount
  for each service
• Strong financial incentive for physician to
  recommend or perform unnecessary services
• Return office visits
• Unnecessary surgery
• Unnecessary labs, x-rays

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No one has yet designed a way of financing health
care that pays the providers when, and only when,
they do something beneficial for the patient
--so every plan has some perverse incentives
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Is Less Care the Problem?

• Assume ethical flaw in managed care is that
  physician is rewarded for doing less for the
  patient
• Assumes that more care is always better care
• If so, should see consistent trend in research
  for managed care to have worse outcomes (not so)

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One Example ABMT

• ABMT for advanced breast cancer thought to
  provide 10-15 chance of survival when all else
  has failed
• Costs 150,000
• Many women sued HMOs successfully when ABMT
  denied because experimental
• Latest research-- ABMT adds nothing to survival
  in advanced breast cancer

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The real question

• Is gatekeeping ethical?
• Can gatekeeping be avoided?

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What is Gatekeeping?

• Physician cares for a population of patients
• Limited budget
• If patient 1 gets something, there is something
  that the other patients will not get
• Comparative judgments of relative priorities of
  need among patients

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Example 1. ICU nurse

• Nurse has 2 patients
• Mr. Smith Just about ready to transfer out but
  has a lot of questions
• Mrs. Jones Acutely unstable, impending multiple
  organ system failure unsure of cause
• Who will you spend more time with?

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Example 2. Primary care office

• NP has waiting room full of patients
• Mrs. Green Has a 10-min appointment, starts to
  complain of several new problems which she has
  had for years
• Mr. White Has a 10-min appointment Oh by the
  way chest pain
• Will you reschedule or run overtime?

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Inevitability of Gatekeeping

• Time and not just money is a limited resource
• So long as you have more than one patient in your
  practice, you must always make tradeoffs among
  needs of different patients
• Seems reasonable to make tradeoffs based on best
  assessment of relative need

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Inevitability of Gatekeeping (Morreim)

• Policy-makers write clinical guidelines to save
  money and maintain quality
• All guidelines have wiggle room
• Physician must decide whether to adhere to
  guideline or try to declare this patient an
  exception-- both bedside decisions impact on
  resources available to other patients

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Eddys Argument

• Two positions
• First position I am generally healthy, my
  chances of getting any one particular disease are
  relatively low
• Second position I already have developed an
  advanced disease

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30yo Healthy Woman

• Would rather have lower premiums and put money in
  kids college fund, etc.
• Strong interest in funding preventive care e.g.
  mammograms
• Little interest in funding desperation care
  like ABMT

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45yo Woman with Metastatic Breast Cancer

• Prevention is now of no use
• Ive paid my premiums for all those years now
  its my turn to get something back
• Strong interest in having funding for last
  ditch measures even if low likelihood of success

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Eddy The Conflict

• Should we interpret the ethical question as the
  patient vs. society?
• Or is it ourselves at one point in our lives vs.
  ourselves at another point in our lives?
• If the latter, which of the two positions is
  ethically privileged in terms of taking a moral
  priority for health policy?
• Eddy argues First position

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When is Gatekeeping Unethical?

• Very generally-- when financial incentives are so
  intrusive into physicians thoughts that she is
  highly likely to place financial concerns ahead
  of concerns for the well-being of the patient

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Bowman Case (TN)

• Prisoner died of pneumonia had known sickle cell
  disease
• For profit prison management firm had capitated
  contract with physician
• By denying care physician could double his annual
  income
• No carve out for prisoners with known serious
  illnesses

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Gatekeeping cases spectrum
Predominant duty is to conserve scarce resources
for others
Predominant duty is to do whats best for sick
person
ExampleIV antibiotics for pneumonia
Gray zone-- tough choice (e.g., treatment very
expensive but also very beneficial)
Example MRI scan for tension headaches
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For-Profit Managed Care

• Is this form of financing inherently unethical?
• Is a for-profit plan inherently less trustworthy?

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Non-Profit Plan
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For-Profit Plan
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For-Profit vs. Nonprofit

• Unless for-profit plans considerably more
  efficient, they will have less to spend on care
• No evidence of such efficiency
• BUT at least a few non-profit plans spend less on
  care than a few for-profit plans, tho on average
  NP spends greater percentage than FP