A Doctor's Farewell: Why He Says No to HMOs

Dr. Jerome A. Lackner, who served as state health director of California under Gov. Jerry Brown, is a reputed Sacramento physician who specializes in the care of alcoholism and drug abuse patients. We hereby reprint the full text of a letter Dr. Lackner recently sent to his patients, explaining his decision to close his medical practice.It is with both anger and sadness that I begin this letter. I have had to come to the grudging acceptance that, for me, there is life after my patients. It has always been my passion to simply be a good physician. I had planned to practice medicine in my usual fashion, hoping to drop dead in the office (in between patients, of course) in my mid-to-late 90s. I was 70 years old in April of this year, and I was looking forward to another 20 or so years of practicing medicine as I think it should be done. But I have come to the conclusion that I cannot do so. It is no longer possible in the current context of private medical care. I am the son of a physician, the brother of a physician, the uncle of two physicians and the father of a physician. But as of Sept. 30, 1997, I will close my practice. Please understand and forgive me for this change in my life and in our relationship. And know that I am not retiring; I have been forced out of practice by managed care. Now this office has never been, for good reasons, a big producer of net income to me, but at one time it did produce enough to keep the doors open and even allowed me to see some patients at reduced rates or even for no fee at all. I have been blessed with many difficult patients with easy diseases. That is to say, I have been blessed with patients whose diseases are treatable, but whose recovery depends on their compliance not only with medication instructions, but also with profound changes in longstanding habitual lifestyles which can worsen disease states: bad nutrition, inactivity, (physical, mental and social), use of dangerous substances -- tobacco, alcohol and other chemicals. My favorite patients are those in which the judicious use of medical means coupled with changes in lifestyle combine to produce a healthier patient. But the current system of managed care makes no provision for the type of medical care that I give. My practice has always been dedicated, caring and competent care of patients. It never made sense to me that when you were well enough to walk into the office, you got to see the physician who knew you best and who had a complete record of your medical history, but when you were much sicker at 2 or 3 in the morning, you could only talk to a doctor who didn't know you, who had no access to your office chart, and who sometimes couldn't care less because he or she was answering your 2 a.m. telephone call primarily because he or she was paying back an obligation to another physician. When my father practiced medicine, there were no answering services, there were no voicemail services, no pagers and no cellular telephones. Still, I gradually became comfortable with the absolutely excellent emergency-care provided by the emergency room physicians in this community, especially since I've always been contacted by them to discuss your care. My big impediment to "signing out" was the realization that I could not provide good medical care to the sickest patients of four or five other doctors without either access to the office chart, access to the doctor or, preferably, both. So, I have been "on call" to all of my patients all of the time because it is actually easier for me. Fortunately, it is also better for my patients. I am not really conscious of the number of after-hours and weekend calls that I get each month, but I recently glanced at a bill from my paging service, and they billed me for over 1,000 pages this past May. For past months, the totals have been 639, 741 and 1,030 respectively. I am not worn down or tired out by taking good care of patients; I am simply no longer compensated for doing so. Unfortunately, fiscal incentives were created to reward doctors who were either financially desperate enough or morally comfortable enough (or both) to diminish the care provided to you, on the one hand, and to punish those doctors who were not to desperate or not sufficiently comfortable with the conflict of interest to do so, on the other. These incentives were designed to put the doctors' financial well-being in conflict with the patient's physical, mental and emotional well-being. I have not been able to accommodate this system. Managed-care systems have produced many mechanisms to deny your care and increase their profits. They have increased patient volume per unit of physician time, both for primary-care physicians and for specialists, leading to shorter visits for you and for longer intervals in between visits. One of the most onerous and odious features of managed-care entities is their untreated, rampant paperwork addiction, and its untrammeled appetite. This voracious paperwork appetite creates hours of uncompensated administrative work for the doctor's office -- whenever the doctor wants to obtain consultations, referrals, diagnostic procedures, treatment procedures, nonformulary, medications, etc., for their patients. The mass of paperwork stacked in my office is beginning to look like the Augean Stables. This time-destroying system exerts further pressure on doctors to forego obtaining such care for you. Selection of patients is correspondingly affected. There are money-based pressures to avoid the enlistment, placement and retention of patients who will have higher net costs of care, such as the sick elderly, the disabled, the poor, the chronically ill, the emotionally disturbed, etc. Remember that the system has dictated that a portion of the costs for your care comes out of your doctor's pocket. Think of this the next time the need occurs for care beyond your briefer and briefer and less and less frequent office visits. They have also impaired the continuity of care, as patients are shifted back and forth between primary care providers. Also, because of constricting panels of specialists, patients have had to change their specialists as well. Change your insurance carrier, and you may lose all your doctors. Keep your insurance plan, and the panels from which your specialists are selected become progressively emaciated. So, selection of specialists becomes more and more restricted. Remaining specialists are compensated in such a way that the less care they have to give, the better it is financially for them. After having gone through an authorization process, it takes longer for a new patient to get into a specialist's office and, after having established your care there, it takes longer to get a revisit. Consultation notes are progressively briefer, and some are no longer typewritten or legible. The tendency in consultative care has been for the specialist to follow the patient along with the primary care physician as little as possible and return them to the exclusive care of the primary physician as soon as possible. What is all this nostalgia for the old fee-for-service medicine; why this pious whining about the demise of the old system? Weren't there great aberrations from quality of care under that system of financing as well? You can bet your life and health there were. The old system fostered overutilization -- big time. Doctors were rewarded for giving too much care more than they were rewarded for giving the right amount of care, and often they were rewarded for the provision of inappropriate care more than they were for the provision of appropriate care. There was overutilization -- lots of it. But how do we know there was? Precisely because the system was uniquely self-reporting. We doctors had to bill the payer of care for every excessive, inappropriate and unnecessary service. With the development of computer technology, standards for appropriate amount and kinds of care were developed. There were well-tested instruments for detecting, documenting and measuring overutilization. Remedies were simple. They consisted of lack of prior authorization and the warning of nonpayment. When proper authorization was not sought or followed and care was believed to be too much, the wrong kind or otherwise inappropriate, there was retroactive denial of payment. We fiercely complained about these remedies. How little at that time we could ever imagine the disaster of managed care. Conversely, underutilization is intrinsically much more difficult to detect, document and measure. In the face of an entrenched and pervasive medical financing system that currently rewards and encourages underutilization, there is absolutely no competent instrument to identify, document and measure underutilization. Since any system of medical financing -- fee-for-service, capitated, prepaid, managed care, salaried, for profit, not-for-profit, etc. -- has its own built-in conflict of interests between the various beneficiaries of the medical-care dollar; no system of medical-care financing can be evaluated separate from the ability to measure its unique incentives and to monitor the departures from quality of care produced by those incentives. Those entities purporting to identify, measure and track deviations from quality medical care have neither a clue nor a chance. They are inadequate in symbolism and flimflam over substance in health-care monitoring. California Cooperative Healthcare Initiative (CCHI) is an insurance plan dominated contradiction. Health Plan Data and Information Set (HEDIS) is a legume-enumerator's approach to the quality of medical care. Foundation for Accountability (FACCT) -- with a board of directors which includes payer's representative and federal types, as well as persons purporting to represent consumers (formerly known as patients) -- doesn't have a clue or a chance either. All of the rating entities are beset with very serious methodological difficulties and will fail to pinpoint other than a minuscule fraction of the very monumental quality of care destroying underutilization that it created by the health-care financing system. This would be true if there were no large conflict-of-interest issues in the self-proclaimed monitoring effort. Again, there is no competent instrument to identify, document, measure and otherwise evaluate underutilization and its malevolent effect on the care of your health and the health of your loved ones. Anyone who argues to the contrary that the current efforts do this is either unknowledgeable, gullible or dishonest. The whole effort taken individually and together is merely bovine excrement. But, be patient; mark my words. Someone will tell you that, in time, a diamond will be created out of this substance. Not only was the old self-reporting, pre-managed care system easier to monitor, but it also put more power of choice in the hands and feet of the patient. If you had to wait too long to get an appointment, or even if your doctor's phone lines were too frequently busy or if you were put on hold too long when the phone was finally answered, you simply changed doctors. If for any reason you did not believe that the doctor was giving you appropriate care, you were able to change doctors. Doctors had to meet the needs of patients to keep patients; now, doctors have to meet and satisfy the needs of the power and money brokers to keep patients and to receive the financial incentives attached to each patient. The leaders of (dis)organized medicine are advocating regulation, on the one hand, and trying to teach to doctors to "do well in the system" -- i.e., make more money while providing less care on the other. This system really can't be properly regulated. The managed-care companies have billions of dollars in excess wealth (saved, ironically, from denying your medical care). This gives them great leverage in the halls of legislatures and in the respective executive offices. Even if legislation is passed, the financial barons who now own the industry are able to buy and pay for agents and employees that are better funded, less overworked, better compensated, more motivated, more industrious, more resourceful and less hampered than the regulator. They will always find new ways to profit the industry at the expense of your care. Legislation and/or regulation to manage and control utilization review, truth in advertising, full disclosure of plan benefits and restrictions, specific length of hospital stays for a few selected diagnoses with great voter appeal, grievance processes; the banning of gag orders, regulating patient recruitment enlistment measures to minimize patient's skimming practices are all fine and dandy but, for the most part, will be grossly ineffective to diminish the vast bulk of underutilization that the system creates. Why didn't the medical profession reject a system of payment based on a conflict of interest with their patients, a system whose aberration from quality care cannot be identified and controlled? Ironically, but understandably, many of the organizations that are now appropriating as much as 20 percent of your health-care dollar for "administrative costs" were originally formed by doctors intending to make the old system work better for you and also improve their cash flow. Gradually, these entities have been turned into the opposite of what they were intended to do, namely to provide more people with better care. Doctors were either easily outwitted and/or simply bought off with relative ease. To paraphrase Nancy Reagan, if doctors had uniformly "just said no" to managed care instead of thinking they could fix it, perhaps it never would have developed. The universities and medical schools have always turned out what the financing system paid them for. They are now falling all over themselves to profit from managed care and to turn out doctors who serve well the new system. The new graduates will never have known a better financing and delivery system. Our generation of doctors, by caving into corporate interests, have set the wrong path for new doctors and have, therefore, disastrously perverted the entire future of medical care for patients. Giant facades are now being erected purporting to ferret out and control underutilization. There are springing up new entities with 1-800 telephone numbers providing mechanisms for underserved patients to grieve to some nameless, faceless peon of unknown training, competence and concern. Most of these entities will prove to be creatures of the forces they are supposed to be monitoring. They are like tethering a dog with a chain of linked sausages. They serve to protect the system, not the patient. They will form the nexus of a vast patient pacification system. Some of you already think that the new system has gotten as bad as it can get. Absolutely wrong! I don't want to go into the history of how we got to this point, but the fact is that the ultimate payer of health-care costs, employers, are not the beneficiaries of the health-care services provided. Their primary incentive is to reduce costs in order to remain in a highly competitive marketplace. Health-care costs for their employees are a huge part of their overhead. So in addition to downsizing, part-timing, outsourcing and otherwise reducing the size of their workforce, they naturally want to cut the health-care costs for all of the employees they can't get rid of. The managed-care brokers, the health insurance entrepreneurs, can't get their slice of the health-care dollar unless they can get contracts from employers to manage the health-care costs for their employees. Competition for these contracts is brutal, especially with megamergers of the health-care giants into fewer but grosser giants. The remaining few companies will compete even more fiercely for contracts with employers for control of their managed care lives. They understand the employer's economic imperatives to cut their health-care costs, so in order to get the contract and the money that goes with it, they will offer to provide and manage care for even less cost to the employer. In order to retain a significant amount of that money for bloated executive salaries, options, bonuses and other benefits, in order to pay the stockholders and in order to metastasize to areas of the country where there is less competition for managed care, lobby lawmakers and outmaneuver regulators, etc., they need to encourage their captive and dependent physicians to become more "cost-efficient" and to provide less care. But the managed-care companies that lost the contract last time will lower their bids next time in order to survive and so on, so that the amount of money left to provide your care goes inexorably downward over time. The fact is, that the worst is always yet to come; it is built into the system. Incidentally, doctors are not the only conflicted providers. Hospitals are under huge economic pressures to reduce their costs again and again. What better way than to dumb down their caregiving staff, downsizing especially the highest cost professionals and replacing them with poorly trained, impossible-to-supervise new categories of "patient helpers." Inevitably, there will be, there have already been, omissions of due care leading to damage to the health and welfare of patients entrusted to their care. The so-called nonprofit entities must behave just like the for-profit entities or worse in the scramble for managed care lives. I am sure that many of the people positioned in the interstices between the payers of medical care financing and the doctors who provide it are good, well-meaning people. I can't judge their motives, only the effects of their actions. They are trying to improve, make less harsh a system that, in the end, is morally perverse. If well-meaning, they will be as unsuccessful as Sisyphus, reputed from Homeric times to be the craftiest of men, but who was punished for trying to outwit the gods and was condemned for all eternity to roll a huge boulder up a mountain, only to have it roll down every time it almost reached the summit. Such is the task of those who would reform managed care to the patient-benign and doctor-friendly. Any system whose financial rewards to physicians are inverse to the care provided and whose financial punishments are proportional to the care provided and whose evil cannot be detected, documented, measured and managed simply can't be fixed. When these changes first occurred, I was able to subsidize the practice from funds left to me by my parents. My wife Becky remortgaged her property. I took out a large line of credit. Now there are no longer any assets against which we can borrow to subsidize the practice. I am now absolutely certain that my style of caring for patients and the current financial system of medical care are intrinsically incompatible, and there is no way for me to preserve quality and to survive in the system at the same time. Incidentally, I owe medicine's traditional enemies in the legal profession a big amends. You who have, ironically, been increasingly barred from initiating individual and class-action lawsuits against the makers of dangerous and injurious products: never fear, you will find your niche in the health-care field. The regulators will prove themselves impotent, the untried and sham grievance and monitoring systems will fail. But for you, the lawyers, the issues will be simpler and much more understandable to jurors, and the burdens of proof much easier than in the product liability field. Also, please don't be surprised if physicians who once banded together in silence against you under the old-fashioned medical-care financing systems will come forward in the defense of patients rights and welfare in the forum of the legal system, since it has become increasingly less possible for doctors to protect the patient within the forum of the medical system itself. But the public relations mouthpieces of managed care say this won't be necessary since the regulators are preventing "gag orders" and mandating that the dismissals of doctor from plans be "for cause" only, etc. So, now, doctors will be able to advocate for the patient freely and fully within the medical forum. Wrong! Let me tell you that any managed-care entity that can't make a doctor's life miserable without a gag order and the right to discharge them without cause from the plan simply does not exist. Because doctors have made an execrable bargain and have bought into a system of medical financing with an abominable built-in conflict of interest with their patients -- one whose evils cannot be detected, measured, monitored or controlled -- the worst fears of the old-time doctors will become a stark reality: The last guardians of quality of care are in fact within the American Tort System and the Plaintiffs Bar. I am hopeful that they will create strong fiscal incentives for managed-care entities to provide more and better care. To protect the interests of patients under the current system, I believe many changes will have to be made. The Employees Retirement Insurance and Security Act (ERISA), a federal law enacted in 1974, should be changed to outlaw provider risk-sharing schemes and incentives contrary to public policy. The law should be changed to permit any lawsuits, individual or class action, against managed-care entities that would normally be available to any injured party seeking remedy at law from any tort feasor including, but not limited to, individual and class-action suits for breach of contract and warranty, consumer fraud, malpractice, intentional infliction of emotional distress, wrongful death, etc. The law should abolish the independent contractor myth as it applies to health-care providers and their organizations and clearly establish that the relationship is one of agency or even that of employer-employee relationship. The so-called no fault alternatives for dealing with intentional or negligent injury to patient should be prevented and abolished. Arbitration schemes should be outlawed.Shifting of liability costs from insurance companies to providers of care, such as doctors, should be prevented. Whereas current MICRA type laws (Medical Injury Compensation Reform Act of 1975) for doctors truly acting independently should be maintained, limits of recovery in cases involving managed-care entities as defendants should be abolished; their pockets are bottomless, filled with ill-gotten gains obtained by denying care for patience. There should be mandatory full disclosure of all provider compensation schemes, including all direct and indirect perks and all negative and positive incentives, monetary or otherwise. These should be communicated in clear language and print no smaller than that of the puffery touting the benefits alleged by the plans. Non-English disclosure statements should be available. All providers of medical care and all managed-care entities should be held by law to the highest of of fiduciary standards. The Racketeer Influence and Corrupt Organizations Act of 1970 (RICO) should be made applicable to the health-care industry. These changes will be difficult to obtain through the federal legislative process, but they will be more effective than the piecemeal incremental regulatory-type reforms proposed in the state legislatures. They put the defense of quality care where it belongs: into the courts. Legal professionals who advocate for patients are, contrary to bureaucratic regulators, compensated based on what they win for patients. Their efforts should create a large deterrent to the continuing decline in health-care quality. Finally, as Sam J. Irvin Jr., the late great United States senator, used to say, "If it ain't broke, don't fix it." How wise, but the converse is not necessarily wise. If it is broke, rather than fix it, the wisest course of action often is to get rid of it altogether and replace it with a better system. Such is the case with managed care.What does my future hold? Right now, I am trying to break into prison to escape managed care. I hope the State of California, Department of Corrections, will find a use for me. I have served a whole bunch of their former residents while in private practice. I am hoping to get 25 to life; managed care is a death sentence. Practically, I will be able to provide continuing care until and through Sept. 30, 1997. Referrals and directions for future care will be best provided by the owners of your managed-care lives, namely your health insurers. They control the list of "providers" to whom you are confined. I will keep the office open until 1 p.m. on Oct. 15, 1997. If you need advice or assistance from and including Oct. 1 through Oct. 15, there will be, of course, no charge. Being a primary care doctor for these many years has meant that my patients have had access until recently to the very best specialists in the world (my experienced opinion). The number of these wonderful doctors is intentionally being reduced by the system. Please choose your new primary-care doctor with an intent to keep your current specialists. Importantly, summaries of the relevant portions of your records will be made available to your new physicians at your request, but only in response to a special release form. As I said, I am the son and brother and father of a physician. But my mother's side of the family provided rabbinic scholars. I now wish that I'd been more heedful of that part of my family heritage; I would have been better balanced and better behaved if I had. This is not burnout (the politically correct term in current use to exculpate a malicious system of health care financing); I am just unwilling to get a prefrontal lobotomy in order to achieve financial success as a doctor under managed care. Please indulge me this long, emotional, rambling, free association on the occasion of losing the privilege of being your doctor. You may contrast it with the much briefer matter-of-fact notices you will receive soon and from time to time from Sacramento (In)dependent Physicians (SIP) and its keeper, Managed Care Systems (MCS) ... we just axed your specialist; get another from a smaller and smaller list; all specialists are equal. Get a new primary-care physician; yours couldn't jam in enough patients to pay the bills. Emotional problem? Well, good; we have a grab bag of various mental health professionals of varying competencies; no choices, of course; any one will do; oh, yes, only so many visits; bare your soul quickly; get well quicker. Your new doctor's waiting room looks like the Greyhound Bus Depot; that's cost-efficient; here, read last week's People magazine again; you won't sit here long; quality of care is measured by the rapidity of the waiting room (depot) turnovers, no. There are no dogs in the office; they were not required by HEDIS, etc. This letter is already too long, but also too short as well, for it is only a fraction of what I should communicate to you. Most importantly, I want to thank you for all that our relationship has meant to me and for what knowing you has given me. In return, you have my love and prayers for the days ahead. Ambrose Pare, the father of modern surgery who revolutionized wound care in the late 1500s, explained the success of his efforts honestly with a simple statement that, "I treat and God heals." So it has been with me and also with all other doctors, whether they know it or not. Thanks to that partnership and your own efforts and actions in that regard, I have repeatedly witnessed more miracles in our practice in a month than they see in the Grotto of Lourdes for a year. For that reason, I am not essential to anybody's medical care; the Majority Partner in my practice remains with you. Sincerely yours, your doctor

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