For the past few years there has been much controversy regarding the issue of health maintenance organizations (HMOs) and their treatment of patients. There are many problems occurring within this type of system and not nearly enough solutions. This paper will point out some of the major problems with health care in the United States and discuss some possible solutions for the future.
The most important thing to understand is the way in which managed care actually works. It is a health care network where costs are restricted through utilization management.In this case, a primary care provider serves as the arranger for access to specialty care. Patients do not seek help from the specialists themselves. Instead the primary provider is left responsible for finding a more reasonable doctor at a more reasonable price. Most of the time physicians within managed care systems are paid as employees or receive a flat fee per patient per year. Patients using managed care systems usually have the option of choosing a primary care provider within the network, or paying an additional “out-of-pocket” expense to choose their own provider outside of the network.Both HMOs, and PPOs (preferred provider organizations) are examples of managed care systems.
 When it comes to health insurance companies HMOs prove to be identical to any other type of business. They are backed by stockholders, and tend to care very much about maximizing their profits. Their main concern is making money in order to keep their stockholders happy.
Many times this becomes a major problem in cases that involve the health of patients who belong to HMOs. Not more than ten years ago health care expenditures in the U.S. were increasing “at a rate of 11% per year. ”  Many large corporations worried that if these costs continued to grow then spending on research, development, and employee salaries would have to be cut. At this time corporations began to persuade their employees to use managed care plans. Today “more than 160 million Americans are now covered by managed care plans, up from about 60 million in the 1990’s. ”  The problem is that many of these 160 million people are enraged at what managed care has done to them.
Most of this dissatisfaction comes from instances involving malpractice. Should these cases of negligence be attributed to the physicians themselves, or is there an underlying reason for the costly mistakes? One case study in particular involves a 33-year-old woman who lives in Bloomington, IL. Cynthia Herdrich went to her HMO doctor claiming to have a pain in her abdomen. She was diagnosed with a urinary tract infection.
A urine test was done and after many days the results came back negative. Cynthia did not have a urinary infection.After visiting her doctor once again with the same symptoms, “a second exam revealed a suspicious mass in her abdomen” (Redbook 94). The decision to do a non-emergency ultrasound scan was made. “This meant Herdrich would have to wait eight more days to get the scan through her HMO instead of being able to go to a facility outside her plan…” If she had been allowed to do this she would have been seen immediately. When the results of the scan finally arrived, they showed extreme internal damage. Her appendix had burst and the infection had moved through her whole body.
This terrible misdiagnosis almost cost Cynthia Herdrich her life. As a result of the trauma she was subjected to, Herdrich sued her doctor and her HMO alleging that, “the HMO’s policy of paying doctors to keep down costs- including costs for diagnostic testing- had compromised her care. ” Although her doctor had in fact mishandled the case, a federal law called ERISA blocked her accusation against the HMO. This law protects employee benefit plans (including many managed-care organizations) from lawsuits.The main problem with this law is that it prevents HMOs from taking responsibility for their actions. If improper treatment of a patient occurs based on the financial position of an insurance company, who should be taking the blame? If the HMO provides its physicians with incentives in order to keep their costs down and make the stockholders profit, then it is the patients who will suffer. In this situation the patients should be considered the stakeholders, or the ones who have something at stake.
Here, it is their health.Kenneth Goodpaster tells us in his article titled “Business Ethics and Stakeholder Analysis,” that when it comes to the decision making process, ethically responsible management includes careful attention not only to stockholders but to stakeholders as well (White 205). Often times these managed care organizations are manipulating the system in order to make a financial profit for their company. In order to save money they may use certain processes ! to delay or deny care that is necessary for the patient.This creates a conflict of interest for the HMO.
They are trying to keep their costs down, and simultaneously provide treatment for their patients. The result is an ethical problem for the insurance company. It must choose between the stakeholders and the stockholders. Because the insurance company is dealing with the health of a human being, it seems morally wrong for them to put the profit before the patient. In the case of Cynthia Herdrich there was no excuse for an eight-day delay when a mass was discovered in her abdomen.If the HMO encouraged bad judgment by rewarding the doctor for the hesitation in order to keep costs down, then both the doctor and the HMO should be held accountable. Giving patients the right to sue their HMOs requires these managed care systems to stay focused on their patients rather than on their own economic profits.
Eventually this would help reduce the problems with misdiagnosis. When looking at this situation from a Kantian viewpoint it becomes apparent that it is wrong to treat people merely as means to an end.It is wrong for the HMO to profit from the mistreatment of individual patients. Each person should be cared for properly because they deserve to be treated as ends in themselves. Although the cases of malpractice due to HMOs are minimal in comparison to the number of people in managed care plans, it does not justify the wrongs that have occurred. >From the perspective of the utilitarian the rational is quite different.
The utilitarian would simply respond to the problem of affordable health care.Do the amount of people who benefit from managed-care plans out-weigh those who have suffered because of its negligence? HMOs have reduced the rate of medical spending in the U. S. They have provided a number of people with affordable health care. The fear is that new legislation might increase the cost and reduce the availability of insurance.  If this proves to be true, the utilitarian would suggest choosing a solution that will be beneficial to the greatest amount of people.In this case the patients who were mistreated would not receive any compensation for their pain.
Allowing patients to sue their HMO is a law that has not yet been passed by Congress. However, the result of it would most likely decrease the corporate power of HMOs causing them to focus more on their individual clients, and less on their overall monetary gain. It is important for people, as well as corporations, to be held responsible for their actions. This is a key factor in business ethics, and an essential solution to the current problem with HMOs.