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A News Reporter Explains His 'HMO Horror Stories'

MANAGED CARE September 1997. © MediMedia USA

A News Reporter Explains His 'HMO Horror Stories'

If you've ever grumbled about how the press plays up one tragedy while ignoring millions of successes, you won't enjoy reading this. But you should. There's a lesson here about managed care's failure to tell its story effectively.
William Sherman
MANAGED CARE September 1997. ©1997 MediMedia USA

If you've ever grumbled about how the press plays up one tragedy while ignoring millions of successes, you won't enjoy reading this. But you should. There's a lesson here about managed care's failure to tell its story effectively.

William Sherman

At first I thought the bad buzz I was hearing about HMOs was no more than the lament of Fifth Avenue doctors whining about the prospect of lower fees.

"Oh, pity the poor physician," I teased my doctor friends who were doing the complaining. Did that mean they would have to cut back on cell phone usage by the nannies who minded their kids, or perhaps slice that respite in Antibes by a few days?

That was 2-1/2 years ago, and in New York City, where I work as a reporter, managed care had barely captured 18 percent of the health care market, all the hospitals had not signed up with the HMOs and traditional indemnity insurance was by far the norm. This was before Congress and individual states passed protective legislation for managed care consumers, before — well, before all the HMO "horror stories" came out, at least on the East Coast.

But the more I listened — and those doctors did go on — the more apparent it became to me that at least some of the things they were saying made sense. That was the beginning for me. Six months of investigative reporting later, there it was in the New York Post, a nine-part series of 26 articles titled "What You Don't Know About HMOs Could Kill You."

The impact was immediate. Hundreds of telephone calls from readers and doctors, politicians promising reform legislation, hearings in the state legislature, bills proposed in Congress. And of course the managed care fraternity was yowling and counter-lobbying like so many scalded cats. In their own way, the articles were the perfect newspaper series: Health care, big rich health insurance companies, doctors, and no lack of victims — patients who were mistreated, not treated, and given the runaround by HMOs when they protested managed care decisions handed down from on high.

Stirring the pot

It was the quintessential story of people without much money being pushed around by big corporations with health and medical care the high stakes of the game. And if you want to stir the pot, those are the ingredients to use, because collectively we are a society of individuals in near constant turmoil over health care delivery.

Rich, supercilious physicians, uncaring nurses, hospitals that reduce us to anonymous ciphers — everyone knows someone with a chilling story about "bad" care.

In New York state, there was a new big player on the scene. The HMO. And the HMOs didn't even provide the care, they just "managed" it. And if doctors themselves were outraged and would provide the details of numerous cases that amounted to much more than cuts in their diagnostic and surgical fees, why then, this was indeed a winner.

The editors of the Post were enthusiastic from the moment I proposed the series. Everyone would read it, they believed, and nearly everyone did. After it was published, I was interviewed on radio and television, by other newspapers and magazines. Both Time and Newsweek followed the Post's lead with long articles of their own.

But there are other issues about this series, and others like it, that should be raised.

A legitimate story?

Why has the managed care industry failed to paint a better picture of itself? International arms dealers seem to have a better public relations apparatus. And what precisely are the internal dynamics of this kind of investigative series, including editors' attitudes and oversight by newspapers' lawyers guarding against libel actions?

The case in point is the series I wrote for the Post, the six months spent on the reporting, and the interaction I had with editors and the newspaper's attorney.

None of that was known to hundreds of thousands of readers, all of whom were left with the indelible impressions of the bold-face headlines.

They included, "Mom Recalls How Baby Died as She Pleaded for Help," and "Ex-New Yorker Is Told: Get Castrated So We Can $ave." All were accurate and all reflected the stories below them.

And there were pictures of the victims: the dead baby, his parents, a woman who couldn't get a badly needed spinal operation, and doctors speaking out against the strictures of utilization review, loyalty oaths and gag orders. Everything was on the record, with no "informed sources."

The series was packed with details about how managed care companies, including Oxford, U.S. Healthcare, Aetna, Prudential and HIP, made glorious promises in their brochures and advertising campaigns but failed to deliver when policyholders became seriously ill.

Then there was paradox of capitation plans where it seemed that the obvious incentive was to provide less care, or no care, and direct financial incentives — the now notorious withhold on fees if doctors' treatment patterns exceeded the dictated model.

It was all in there, day after day: people dying because of denied care and denied pharmaceuticals, dying because their HMOs were denying costly treatments for breast cancer like high-dose chemotherapy with bone marrow transplant.

In the "castration" case, a 76-year-old man was ordered by his HMO to undergo the operation as a cost-effective alternative to his monthly injections of Lupron. This drug suppresses the production of male hormones, a function necessary to keep the man's prostate cancer in check.

Deny. That was the operative norm because the for-profit managed care companies were ultimately concerned with the bottom line, and their profits were soaring.

That's the way it came out in the New York Post. And it wasn't that the "other side," the companies and their spokespersons, didn't have their say and plenty of it. Editor Ken Chandler, metropolitan editor Stuart Marques, managing editor Mark Kalech, and the series editor, Marsha Kranes, all insisted on balance.

Not that I needed a lesson in objectivity, but there were reminders from the top. "Doesn't U.S. Healthcare have any response to this?" Kranes asked incredulously when I told her the HMO had declined to comment. "I mean, the infant died?"

No comment's consequences

Other managed care companies did get space for their views, although in the main they refused comment on individual named cases of "victims." From any objective public relations standpoint, these "refused to comment" tags hurt the HMOs.

The reader's immediate emotional response after digesting a story with a named victim and specific recital of medical records with comments by treating physicians is obvious. "If these guys are on the up and up, why are they refusing to comment?"

Indeed. There was no issue of patient privacy here. The patients had already gone public.

U.S. Healthcare (now merged with Aetna), one of the five HMOs whose policies and practices were examined in detail, took a very unusual stance. Despite receiving an oral and written list of specific questions more than three weeks before the series ran, company officials refused any and all comment. Then, two days after the series began, a spokeswoman called and asked if the company could fax the Post a written response that would be included in the articles.

The newspaper's decision was that the company's fax offer was too little and too late. How could a newspaper run an HMO's response to questions and issues raised the first day of the series on the fourth day of the series when the focus was on a totally different topic?

Also, U.S. Healthcare was not interested in a question-and-answer interview, but instead wanted to make a policy statement that more properly belonged on the op-ed page. That was the forum offered to that company.

Oxford, Prudential, Aetna and HIP all commented generally about their emphasis on preventive medicine and saving consumers and employers money through lower premiums.

However, pitted against the doctors' detailed descriptions of difficulties in dealing with HMOs' utilization review processes and getting approval for "medically necessary" procedures, the managed care companies' statements simply didn't stack up equally.

On the fifth day of the series, the Post printed the salaries and benefits and other holdings of U.S. Healthcare's founder and chairman Leonard Abramson, and Oxford Health Plan's Steven Wiggins. Both were publicly traded companies.

Before Aetna bought U.S. Healthcare, making Abramson a billionaire, his annual salary was $3.85 million and his shares were worth $63.2 million. Wiggins' shares on Sept. 22, 1995, were valued at a tidy $97 million. Of course, both had stock options, and generous benefit packages.

So in totality, the reader was left with the conclusion that tremendously wealthy bean counters were refusing to provide one of the critical ingredients necessary for life: health care.

Anemic defenses

It resonated and infuriated in a big way. Trusting policyholders seduced by advertising campaigns were getting sick or sicker and dying.

The other side of the story, the statements made by managed care executives, paled by comparison. The surveys showing that the vast majority, more than 85 percent of HMO policyholders, were satisfied with their care could not compete with the personal stories of the victims.

Similarly, the fact that more than 9,000 airplanes land safely worldwide on any given day cannot compete with the story of one plane that crashes killing 160 people.

That sense about what is considered "news" aside, the HMO series was "fair" by any journalistic standard.

Thousands of words were printed out of an investigation that produced 160 single-spaced, computer-typed pages of interviews, not to mention five cartons of documents — and there were no libel suits, not even the threat of one.

One reason was that many of the documented cases were directly from the files of New York's Department of Insurance, which had received detailed complaints from dissatisfied patients and angry physicians in hundreds of cases.

The state agency had investigated those complaints and resolved them in almost every case against the HMO insurers.

Another reason the series sailed through with no repercussions was that for each individual victim's story, and other parts of the investigation, the Post's attorneys insisted on documentation that supported each charge.

Hours were spent going over specific charges, notes, public documents, financial records and lawsuits. With no backup, no item got in.

At the same time, there was another dimension to the story that never occurred to me, even during the writing and editing process: the politics of the newspaper itself.

It is no secret that the Post's editorial page philosophy is Republican conservative, and no secret that many conservative Republicans are in favor of managed care for everyone, including all Medicaid and Medicare recipients.

But that was never brought up by any of the editors. Later I heard — though I could not verify — that a nationally prominent Republican politican had personally telephoned someone high up in management in an attempt to curtail the series.

If he did, there was no effect. Not only wasn't it curtailed, but it was on the front page every day. Three weeks after the series was over, another newspaper, the New York Observer, took note of the fact that the effect of the series was way out of line with the Post's editorial-page philosophy.

Just good journalism

The editors simply thought it was a good story. Politics wasn't a factor — and I'm not writing this in an attempt to curry favor with management.

Most telling is the fact that the HMOs, including Oxford and U.S. Healthcare, so roundly criticized in the series, continued to buy advertising space in the Post.

So now it is two years later, and the fact is, little has changed. If anything, the public perception of HMOs has gotten worse, especially with controversy from the nation's capital about managed care companies' rapidly growing role in Medicare. And there have been more horror stories published and broadcast throughout the country, despite the passage by many state legislatures of consumer protection regulations on everything from mandatory two-day minimum maternity stays in hospitals to mandatory disclosure of financial incentives provided by HMOs to doctors in limiting care or conforming to treatment and billing profiles.

Still, the managed care companies have not found a way to improve their image despite large amounts of money poured into public relations and lobbying. They have a story to tell, but they haven't found an effective way to tell it.

Our series worked because its reports were true, dramatic and important to people. Is there an equally dramatic case to be made for the good done by HMOs? If so, I haven't heard it yet.

William Sherman is a Pulitzer Prize-winning journalist and Emmy and Peabody award-winning television news correspondent and producer. He won the Pulitzer for an 18-part series on abuses of the national Medicaid program by providers who were delivering substandard care. He is an investigative reporter for the New York Post.