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ISSUES
The Confession of a Managed Care
Medical Director
As heard by a Congressional Subcommittee, May 30, 1996*
Blame Congress for HMOs and Health Plan Power
My name is Linda Peeno, and although the witness list does not
reflect this, I am a physician. I am a former medical director and
medical reviewer. I did the job that was referred to repeatedly in
the first panel as a physician manager for three health care
organizations. I currently, though, primarily work in medical and
health care ethics.
I am here primarily today to make a public confession. In the
spring of 1987, as a physician, I denied a man a necessary
operation that would have saved his life and thus caused his
death.
No person and no group has held me accountable for this
because, in fact, what I did was I saved the company a half a
million dollars for this.
And furthermore, this particular act secured my reputation as
a good medical director, and it ensured my advancement in the
health care industry&emdash;in little more than a year, I went
from making a few hundred dollars per week to an annual six-figure
income.
In all my work, I had one primary duty and that was to use my
medical expertise for the financial benefit of the organization
for which I worked and according to the managed care industry...
[In the managed care industry] it is not an ethical issue to
sacrifice a human being for a savings, no matter how that savings
occurs. And I was repeatedly told that I was not denying care. I
was simply denying payment.
I am not an ethicist whose primary background has come from
the books. For me, the ethical issues were born in the trenches
and pit of the pain that I have come to realize that I cause. And
if I am an expert here today, it is because I know how managed
care maims and kills patients.
So I am here to tell you about the dirty work of managed care
and this is the kind of straight talk that I wish Ms. Ignagni
[President and CEO of the American Association of Health Plans]
could hear now.
Now, let me explain to you the ways that I was a good medical
director. I was regularly consulted by marketing on ways to change
expensive benefits or change the language to give me loopholes to
make denials when requests came.
For example in one plan, we were able to structure our
investigational language exclusion so that I was often able to use
it to deny almost anything that was expensive, and particularly
out-of-network requests.
I turned preexisting exclusions into a game as I tried to
connect almost any prior medical complaint or visit as a reason to
deny payment.
There are many more thing that I could tell you about, but,
ultimately I was only as good&emdash;and I put that in quotation
marks&emdash;as the doctors in my network, for it was their
numbers that I needed to prove that I was doing my job.
That meant that I did whatever it took to control them:
intimidation, hassling, humiliation, I have done it all. I have
used inadequate and inaccurate data to create reports to get
doctors to make their numbers better, in other words, decrease
their usage.
I have used "economic credentialling" to select the best
inexpensive physicians and rarely correlated these with quality
factors.
I have helped design contract provisions to ensure our payment
and monitoring schemes got the results we wanted at the plan, and
I have threatened deselection to numerous physicians who were
especially difficult or costly.
However, there is one last activity that I think deserves a
special place in this list. This is what I call the "smart bomb"
of cost containment and that is medical necessity denials.
Let me take you to the heart of managed care.
Even if a plan denies using all the other things that I could
list, it is impossible for them to deny their use of this practice
because it is vital to managed care; that is making medical
decisions about access, availability, and use.
And even when medical criteria is used, it is rarely developed
in nay kind of standard traditional clinical processes. It is
rarely standardized across the field. The criteria is rarely
available for prior review by physicians or the members of the
plan. So, even if a a plan has a clear benefit package and has all
the perks, like free eye exams or free screening tests for cancer,
other marketing ploys, the member's physician will never be the
final authority on what his or her patient will get.
This might go unnoticed for simple needs, like a regular
office visit or a bout of the flu, but I can tell you that when
something unexpected or expensive happens, it is like a bucolic
pasture turned battlefield. The land mines will start exploding
everywhere.
And somewhere in every coverage booklet for every managed care
plan is a claim that establishes the plan as the final authority
for medical necessity. What that means is that there is some
physician at some plan doing what I did.
That person rarely is continuing a clinical practice. They are
sitting behind a desk making decisions about a patient they will
never see or touch, completely removed from the consequence of
their decisions. They are getting paid by someone to make
decisions for the benefit of the plan and not for the benefit of
the members.
I would like to conclude by saying, what kind of system have
we created when a physician can receive a lucrative income for
adding to the suffering of patients? I became a physician to care
for, not bring harm to my patients, and I am haunted by the
thousands of pieces of paper on which I have written that deadly
word, "denial." Thank you.
In her prepared written testimony which was long and
detailed, Dr. Peeno concluded with the following statement:
I contend that managed care, as it has become, can exist only
through serious ethical transgressions against individuals and
society. Furthermore, I contend that a health plan's resistance to
ethical correctives is proportionate to its reliance on ethical
transgressions for its "success." Disclosure and exposure would
present serious disadvantages in competition for cost-cutting and
profit making. In summary, it is a fair assessment to claim that
managed care's "success" depends upon the following:
- Use of non-medical agendas to drive medical policies and
practice;
- Collapsing of the rights of individuals for purported greater
collectivist goals;
- Supersession of the care of the individual by the care of the
collective;
- Creation of ill relations between professional ambitions and
the absence of moral inhibitions;
- Reliance upon righteous ideologies about reform and societal
benefits coupled with cost-cutting policies;
- Disparagement of the "weaker" (i.e. costly) groups within
society;
- Linkage of economic imperatives and professional
self-interest;
- Direction of medical professionals by parameters set by health
care and financial administrators;
- Establishment of quotas and internal processes for control
with little regard for the physical and psychological cost of
their effects;
- Selection of professionals who are ideological converts and
"good" practitioners of its goals;
- Enticement of physicians as agents of an organization, such
that organizational goals are supplied with medical validation;
- Facilitation of unethical professional practice by financial
rewards and bonuses, as well as job security and advancement;
- Generation of moral void by use of propaganda;
- Degradation of moral expressions of compassion and sympathy
for persons who have been designated costly or needy;
- Induction of guilt into those who are made to feel a drain on
resources or a threat to the collectivist goals.
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- The list could go on, however, there is enough here to suggest
drastic needs for change. Of course, each of these would be
vehemently contested by the managed care industry. If they are
inaccurate, then it seems that the industry should have no
reservations about supporting transparent and publicly accountable
activities.
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- We know, though, they do object to this. Why? Because control
of patients and doctors depends upon unethical practices. To this,
at least, we should object. Manipulation and exploitation for any
reason, even beneficence, is unethical and destructive of social
good.
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- We have enough experiences from history to demonstrate the
consequences of secretive, unregulated systems which go awry. The
list above is not new. In fact, it comes from a book detailing the
characteristics of a dire period of recent history.3
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- The last time this combination of forces worked in concert,
over 200,000 individuals lost their lives in Nazi Germany (even
before the Final Solution). Most of these persons were German
citizens sacrificed for medical reasons set by economic and social
agendas. I find the parallels chilling. One can only wonder: how
much pain, suffering and death will we have before we have the
courage to change our course?
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- Personally, I have decided even one death is too much for me.
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- * Dr. Peeno delivered an oral statement along with written testimony for a Congressional hearing on "Contract Issues and Quality Standards for Managed Care." Her testimony was heard on May 30, 1996 by the Subcommittee on Health and Environment of the House of Representative's Committee on Commerce. Her entire testimony can be found at the National Coalition of Mental Health Professionals and Consumers." (http://www.nomanagedcare.org/DrPeenotestimony.html).
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