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Healthcare Leadership Council

 March 5, 1999HI

March 5, 1999

N.Y. Times: does Managed Care Deny Too Little

The New York Times has asked whether managed care doesn't deny care often enough.

    Despite the horror stories about health plans supposedly denying needed treatment, Times reporter Michael M. Weinstein on Feb. 28 pointed to "a problem that is precisely the opposite of the one everybody's complaining about.  That problem is too many medical treatments rather than too few."

    Approving unnecessary or questionable treatments jeopardizes both quality of care and cost containment, Weinstein wrote.

What is the basis for the Times' claim?

    A law in New York that since 1997 requires health plans to report appeals of denials of treatments doctors have ordered.  The evidence shows that the six largest health plans in New York State averaged 2.5 appeals per 1,000 patients.

    One managed care organization that covers more than a million New Yorkers "reported fewer than 1.5 appeals for every 1,000 enrollees."

    In New Jersey, only 69 external appeals were requested from among 2.5 million HMO members in 1998.

    In Connecticut, only 39 patients filed external appeals of roughly one million managed care patients.

    Medicare, which makes external appeals automatic for its beneficiaries in managed care, only rarely sees such appeals.

The evidence may well overstate the incidence of denials of care.

    One large New York health plan "reported twice as many appeals, about 38 per 1,000 patients, as any other plan, and about 15 times as many appeals as the largest plans."  But the numbers exaggerate the incidence of treatment denials because nonmedical complaints, such as complaints about premium increases, were included in the report.

    Further, that plan "overturns about 30 percent of its initial denials, often after physicians produce better evidence" that the recommended treatment is appropriate in the particular case.

To ensure that quality care is delivered in every case, Stanford University Professor Alain Enthoven says an "urgent need [exists] for managed care to second-guess decisions by physicians to subject patients to needlessly risky surgery and needlessly costly tests."

    A presidential commission has said that as much as 30 percent of health care expenditures go for treatment without scientific justification.

    Medicare patients in some parts of the country are 35 times more likely to undergo mastectomies instead of breast-conserving surgery, "for no apparent medical reason."

Stanford's Enthoven warns: "The country risks making a terrible mistake if it overreacts and treats every denial as an assault on patients.  Denials are a necessary feature of a well-run plan."

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