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HMOs Dump Elders . . .

Health care: The senior market, no longer a money-maker, is being left in the cold.

October 23, 1998|JAMIE COURT | Jamie Court is the director of Consumers for Quality Care, a health care watchdog project of the Santa Monica-based Foundation for Taxpayer and Consumer Rights. He can be reached by e-mail:

On the day that Congress voted to go forward with impeachment proceedings, President Clinton offered a censure of his own, directed toward the latest health maintenance organization industry outrage: elder dumping.

Forget drive-through deliveries, which gave new meaning to the term "maternity leave," and outpatient mastectomies, the avant-garde of the amputation-and-go medicine. Elder dumping is the clearest demonstration yet of how HMO medicine is a fair weather friend and why Americans should dump the managed costs system before it prematurely discharges them.

Just months ago, HMOs aggressively sought the business of healthy seniors with enticements such as free prescriptions and eyeglasses. Now, claiming high costs, HMOs are summarily dumping seniors and the disabled in Medicare.

Seniors were once attractive for HMOs to enroll at an average $471 per month per head. But caring for the elderly can be expensive. The trick for the HMO corporation, which keeps every dollar not spent on the patient, was to enroll the well. When HMOs could cherry-pick the best risks among older Americans, the companies set enrollment records, coaxing seniors out of safe Medigap policies, which covered what traditional Medicare would not. To enroll the healthy, HMO "senior ambassadors" gave their pitches for the plans at places the ill could not frequent--shuffleboard centers, golf clubhouses, the second floors of two-story buildings with no elevators.

But the government caught on. The U.S. General Accounting Office concluded in 1997 that the Medicare program paid HMOs $1 billion more than it should have because HMOs enroll people who are healthier and less costly than the typical Medicare recipient. The GAO also found that seniors with chronic conditions tended to leave the HMO on their own and return to the fee-for-services sector. The costly fee-for-service Medicare system (and the taxpayers who subsidize it) was saddled with all the sick patients, while the HMOs were paid to care for the healthy.

Now that the government is no longer tolerating HMO cherry-picking and is paying Medicare HMOs commensurate with the actual costs of the seniors they enroll, the HMOs are refusing to cover many seniors. It is cost-prohibitive for the stranded seniors to buy back into new Medigap policies after abandoning them to join the HMO.

The HMO pullouts will directly impact more than 400,000 Americans--1 out of every 15 beneficiaries now enrolled in HMOs.

Seniors who stay in HMOs and get sick tend to run into obstacles getting care.

One out of every five Medicare HMOs had disenrollment rates above 20% in 1996 and most of the enrollees left because of problems getting treatment, according to two 1998 GAO reports. The message is all too clear: HMOs do not want to care for the sick, only the well.

The indelible lesson for Americans should be that a system set up to manage money will never truly care for patients. HMO corporations will simply shift costs away from themselves. Legislative efforts to maintain a firewall between money managers and healers have fallen victim to the retrenched HMO lobby.

More potent cures are needed. The simplest remedy is to agree as a nation to capture the entire $1 trillion now paid annually for American health care and cover everyone with a reasonable, basic benefit package; put nonprofit medical professionals in charge of truly managing care and cut the HMO corporations out. It's not a new idea. But, with scandals like elder dumping, it just may catch on.

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