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.
