14 March 1998

Business Control of Medical Practices a threat to Patient Benefit

(Keywords:- HMO, capitation, businessmen, standard)

          Of late, businessmen are coming to town in a big way -- to buy up existing medical practices. The aim is obvious: to set up Health Maintenance Organisations (HMO) -- yet another form of medical insurance scheme. Rumours are that these organisations, which have mushroomed in the United States some 20 years ago, are now facing a decline -- both doctors and patients are pulling out of them!

          What is HMO? Simply put, for a fiscal annual contribution, the “client” will have “unlimited” medical care from doctors in hospitals and clinics contracted by that HMO.

          There is an apparent wealth of benefit. To the affordable would-be patients, it provides an alternative private medical service with capitation. To the Government, in face of the insatiable demand on public health services, any system to take away part of the load must be welcomed.

          Yet, the flaws should be clearly spelt out to the Government and public alike before our society sink too deep into he quicksand.

          First of all, it should be noted that HMOs are not charitable nor non-profit taking organisations. Its existence must be linked to financial gain. To achieve the maximum profit, there can only be one solution: to minimise the expenses on hospitalization use, drugs, expensive investigations, etc -- all, if  apply injudiciously, will lead to unfathomed harm on the “clients”.

          For long, doctor-patient relationship has been simple. Yes, money does change hands, but it is for the professional service, never a business relationship. The doctor get the well deserved respect; and the patient and family the life long care.

          Today as we move into expensive high tech medicine, as our ever aging population require chronic extended care, medicine or health care is being seen by businessmen as a ludicrous undertaking. Patients are seen by them as “customers” with the “dollar sign” written all over their faces. When businessmen buy up medical practices and transform them overnight into business venture, the time honoured doctor-patient relation disappears; cost effectiveness becomes the order of the day. After all, in business there is one and only one thing -- “maximized profit”.

          In the extreme case when businessmen control professional practice, professionals could be forced to forgo standards for that extra few bucks that will go into the wallets of the directors. The businessmen take the money, but the doctors bear the responsibilities, and the patients failed to get their deserved services.

          One top HMO in the US claimed they still use the iodine based contrast for certain X-ray investigations instead of a safer non-ionic dye. When asked how they would deal with medical litigation should sensitivity reactions arise leading to complications and loss of life, the reply was simple: “we will settle it out of court, it is cheaper than to use non-ionic dye.” Patient safety, even life, only plays second fiddle to financial gain!

          From another angle, when a patient visits a doctor and is charged, say, $100 for treatment; if service is quantifiable, the patient gets $100 of service from the service provider. But if a patient joins a businessmen run HMO and pays, again, $100; that $100 ends up in a “three ways split”. Assuming an equal share split for simplicity sake, at least one-third will go to the share holders, one-third to the management and at most one-third goes to the service provider if he is luck! In short, the patient only gets $30 worth of service.

          Worse, once a business orientated HMO managed to lure a sizable number of “customers”, hence with an enormous bargaining power, the corporate manager will play Peter against Paul. He will offer his “clients” to Peter for a very low consultation fees and if Peter refuses, he will offer it to Paul for even less. Standards of practice will no doubt dwindle.

          Government must act now, before the society gets too deeply involved with their eyes close to the detriment of our health care standards!

(Hongkong Standard)