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Chapter 11

AT THE TRENCHES

This chapter refers to health care in the years 1995 and 1996, and to events preceding a new election of officers in the American Medical Association.

By this time, the major insurance companies had found it expedient to "carve-out" mental health services. The irony of this is that supposedly managed care was going to organize and integrate mental health care.

The "carve-out" produces the opposite. The managed care company contracts for "medical services" with a medical "provider", and for "mental health services with a "behavioral health" company. This company, after taking a substantial profit for the shareholders, contracts with mental health professionals to provide minimal services at a discount. Out of one dollar allocated to health services, 20 cents may go for profits and administration to the insurance company, 40 cents may go to the hospitals, and 40 cents will be distributed among physicians in family care, internal medicine and all other specialties. The result is that 97 cents will be distributed to others before 3 cents are allocated for mental health care, even though the patient may see nobody but a mental health professional. This patient may be thinking of the dollar she paid and not of the 3 cents of services she may or may not get.

At such a tremendous discount, not much can be offered to the patient. The Behavioral Health Carve-out companies need to make sure that psychiatrists do not evaluate the patient, do not establish a differential diagnosis, do not evaluate all treatments available, and do not do psychotherapy. What is left is hiring them to write prescriptions, and that is what many companies have tried to do: hire psychiatrists to write prescriptions for patients diagnosed and treated by others with lesser training and experience. Most psychiatrists have rebelled against this humiliating abuse. The companies have tried to use "gag rules" to prevent psychiatrists from sharing with patients their reasons for not accepting the companies' impositions.

By 1995, the Behavioral Health Carve-out companies had acquired power and were consolidating it: they had established their own association (so much for their respect for anti-trust considerations!) and were not only sharing information, but also giving signs that they would eventually gobble each other up, so that a few survivors would have a monopoly on the care, or better, the obstruction of the care, of the mentally ill.

The reality observed by those inclined to examine trends was quite bleak:

1. Employers were offering reduced coverage to smaller numbers of employees. As a result, more patients were using government plans to obtain health care. In mental health, fully 58% of treatment was subsidized by government programs.

2. For-profit companies were rapidly taking over the managed care field. This was accompanied by the emergence of executive officers who were making millions each year while fewer patients obtained lesser benefits.

3.The managed care companies were merging so that soon there would be only a few companies controlling the medical care of large groups of people.

4. Profits and large administrative costs kept on piling up. This permitted the managed care companies to launch marketing campaigns that led many to accept their statements about their altruism and their commitment to excellence.

5. The managed care companies proved adept at inventing a new vocabulary that disguised the reality of their operations. Though they were supposed to offer coverage for services, the money they spent in services became known as the "medical loss ratio" (!).

6. As abuses became intolerable, a new kind of lawyer emerged around the country that was ready to sue for damages to patients. Though this in itself was good, the settlements and reasons for them were often kept confidential, so that people not directly involved could learn the facts.

7. The managed care companies felt protected by anti-trust legislation (see chapter on Trust and Anti-trust), by ERISA (see chapter on ERISA) and by a republican congress likely to be friendly to them.

8. New ways of hiding abuse were found. The only way to treat many mentally ill individuals was by charging them for the results of their illnesses. Prisons replaced hospitals, so that a population of several hundred thousand mentally ill people ended up being treated in prison.

9. Millions of people lost their health coverage, so that the ranks of the uninsured kept on swelling far beyond 40 million people in the 1990's.

10. As the managed care companies drained every penny available in employer sponsored programs, they came to see Medicare, Medicaid and Champus, the government health coverage programs, as new areas of opportunity. The potential was immense because the poor protected by government programs were even less likely to complain than the middle class patients buying employer sponsored programs, so that the most abusive practices could be implemented in Medicaid, Medicare and Champus.

Physicians in clinical practice knew that the situation was rapidly advancing to a critical point in which physicians, their patients, the patients' families and the community at large would rebel.

Physicians not directly involved in patient care, administrators, some researchers, and many educators, were not as aware of the situation. Physicians working for managed care, some making millions a year, were less inclined to criticize the situation.

In the APA, many who had followed Dr. Eist in his first campaign for APA President, came to urge him to run again and make the APA a national leader against to abuses of managed care.

The situation was far from clear. Though the need for a strong push against managed care practices was clear to many physicians, a small minority were profiting from the system, a substantial number were trying to work within the system, and many, mostly younger physicians starting their practices, were controlled by the system.

A potential struggle against managed care now required using information that often was not easily available, educating those who were not familiar with all the facts, and appealing to the highest values of those that so far had not been involved in the rough and tumble of a struggle against a powerful industry.

At the same time, there was a reservoir of decency, altruism and desire to do right that could be used to present clear facts, develop new initiatives and advance toward better protection of patients increasingly damaged by the managed care industry.

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©2000 Munoz and Eist, The People v. Managed Care