California Doctors Opt Out Of HMOs, Citing Quality, Costs

Dana Bartholomew
c.2000 Los Angeles Daily News

LOS ANGELES -- For Cindy Maxey and her family, her pediatrician's recent decision to
refuse HMO payments meant spending $100 more a month or leaving the beloved family
doctor behind. She decided to stay, but some of the other 4,000 HMO patients of
Agoura-West Valley Pediatric Medical Group may not be able to afford to do so, forcing
them to find new doctors or go without care.

``I feel really uncertain as for what the future holds, because if this is happening today,
what will happen tomorrow, or next year?'' said Maxey, 36, of Woodland Hills.

What happened to Maxey reflects what doctors say is a growing crisis in health care:
Doctors are leaving HMOs increasingly because they say they don't get enough
reimbursement.

Health maintenance organization officials contend the exodus is not significant, and
those doctors who leave are doing so just to make more money.

Agoura-West Valley Pediatric Medical Group's decision to forgo HMO payments
coincided with the financial collapse last week of the Family Health Care Group of Simi
Valley. Family Health Care had funneled HMO money to Agoura-West and provided
care for some 50,000 patients in East Ventura County and the San Fernando Valley.

``Every week there are more and more doctors who refuse to accept HMOs,'' said Dr.
Marie Kuffner, president of the California Medical Association.

``These are good doctors who for years have said, we will take care of our managed
care patients, and having tried that, couldn't do it,'' she said. ``It's a level of frustration, and
a feeling of failure, that you're just not paying the bills.''

The California Association of Health Plans, which represents HMOs, asserts there is
no such exodus of doctors.

``Doctors place the blame on managed care for doctors not getting the fees that they
like,'' said Bobby Pena, spokesman for the association. ``That's wrong.''

What's happened is there's just not enough money going into the health care system to
cover costs, he said. Doctors do make money.

For doctors at Agoura-West, the choice was easy.

``When we signed with HMOs, we did it with the understanding we'd provide only
one level of care: quality care,'' said Dr. Andrew K. McLaren, one of eight doctors in the
Mission Hills and Agoura Hills practice.

Unfortunately, he said, ``services necessary for patient care were being denied on a
routine basis.''

Denied referrals to specialists. Denied vaccines for meningitis, ear infections and
pneumonia. Denied, or late, checks. Reimbursement rates by HMOs slashed by 10
percent.

Enough was enough, the doctors said. We're burned out.

So, apparently, was the Thousand Oaks Pediatric Group, which bailed on HMOs 1
1/2 years ago. As was the Valley Pediatric Medical Group, whose six doctors reached the
same conclusion.

``We've never regretted our decision,'' said Valley Pediatric business manager Carolyn
Beilfuss. ``We were so frustrated with it; it HAD to be better without (HMO) managed
care.''

While doctors' advocates say HMOs have compromised care and eroded incomes
since they were introduced 30 years ago as a means to cut costs, defenders say they have
allowed more employers to insure their workers.

Some 20 million Californians are in managed care, more than half of everyone who
has insurance. Health maintenance organization plans control costs by prepaying doctors
and specifying costs and medical procedures.

Agoura-West doctors said the reason for leaving was largely so they could practice
medicine without having to worry about financial oversight.

A Moorpark mother recently brought a 4-day-old baby yellow with jaundice to some
prominent San Fernando Valley and East Ventura County pediatricians.

What the baby needed, Agoura-West pediatricians saw, was home therapy by trained
nurses. But nurse after nurse each said they wouldn't do it for fear of not being
reimbursed by the baby's health maintenance organization.

Such decisions are intolerable and justify a change, said Debbie Karrer, the insurance
manager for Agoura-West. Abandoning HMO patients may begin the demise of the
HMO system. ``This will become a domino effect in health care,'' she said. ``Once our
physicians do it, all will follow suit. And it will be wonderful.''

But a California health care think tank is skeptical that many doctors are abandoning
HMOs in the guise of increasing patient care. They insist it is all about doctors wanting to
make more money.

``The bottom line is this: They're getting paid what they want to get paid,'' said Dr.
Elaine Batchlor of the California Healthcare Foundation. ``The bottom line is their
income.''

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