Problems with HMO's

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Problems with HMO's

Many employees must designate a health plan through their employer. These days, as HMOs (health maintenance organizations) and managed care plans continue to proliferate, that means a choice between bad and worse. As employees line up in the lunch-room for a process called open enrollment, they may be surprised to learn that managed care rates have gone up — again. The mirage that managed care is cheaper care is finally fading. And, for the first time in years, employees may also have the promise of free choice in medicine in the form of a new method of financing health care. Consumers are already aware of horror stories involving HMOs, but cheap rates persuaded many that managed care is less expensive. Recent rate hikes are proving otherwise. Many patients must go out of network for crucial care. Co-payments are rising. It's little wonder why. As HMO executive Randall Crenshaw, chief medical officer for Cariten Healthcare of Tennessee, recently told the Wall Street Journal, more managed care patients are becoming "frequent fliers;" they over utilize health care and drive costs up. The deterioration of managed care stems from a basic economic principle: health care subsidized by government and rationed by bureaucrats is doomed to failure. Canada's socialized medical system, which designates knee replacement an elective, is sending patients scurrying across the border and national health care in the United Kingdom restricts heart transplants to anyone under age 55. Managed care in America is no exception. Congress made health insurance premiums fully tax deductible to employers covering employees' health care in 1942. This discouraged individuals from buying insurance for themselves and encouraged emplo...

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...ncial incentives: for patients, to see a doctor only when absolutely necessary; for doctors, to provide more tests and treatments rather than less. In managed care, patients pay vastly reduced fees to see their "primary physician" – but they can't see specialists or other medical service providers without their primary physician's approval. For patients, the financial incentive encourages casual doctor visits for such things as preventive care, but makes it almost impossible to choose medical options not approved by the primary physician. And for doctors, watched over by plan accountants, the incentive encourages minimum tests, referrals and hospitalizations. Both systems have their advantages, and no consensus exists among

medical researchers about whether consumers are being served better or worse in the managed care environment than they were in fee-for-service.

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