ustxtxb_obs_1974_02_15_50_00011-00000_000.pdf

Austin There’s a new catch phrase at the State Board of Insurance these days. People are talking a lot about Joe Christie’s “Hybrid form of HMO.” If you breed a horse and an ass, you get a mule, and that’s a hybrid form. If you cross the restrictive provisions of Texas medical statutes with growing political pressures for consumer-dominated health maintenance organizations, you get the Insurance Board’s guidelines for the creation of prepaid comprehensive health care plans a hybrid form of HMO. A mule, however, is a sturdy and serviceable beast; the Insurance Board’s plan is a cumbersome animal of disjunctive parts beset by legal difficulties. Joe Christie, the State Insurance Board chairman, issued his , guidelines last December. The TMA, which defeated efforts to pass legislation authorizing consumer-controlled HMO’s, renewed its attack post haste.. The day after the guidelines came out, Sen. Babe Schwartz hurried a letter to the attorney general’s office requesting an opinion on the legality of operations falling under Christie’s new rules. The opinion has yet to be issued. Although recent federal HMO legislation contained a passage superseding certain state laws restricting the formation and operation of HMO’s, it is by no means certain how that federal act will affect the Christie-TMA struggle. It is possible that the new federal law will pertain only to those programs to be funded by the monies which it provides. Despite the fact that Christie’s guidelines are in a kind of legal limbo, several groups across the state are eyeing them as a possible modus operandi. Prudential Insurance has received the approval of the Insurance Board on a contract form for a prepaid plan and is now shopping for group enrollees and the medical facilities needed to make the project a functional reality. Ms. Cox is an Austin freelance writer who has worked as a grants consultant for the Mexican-American Council for Economic Progress and for the Governor’s Rural Development Commission. The coalition of interests that moved Christie to action on HMO’s included the Texas Catholic Conference, the Texas AFL-CIO and the Texas Hospital Association. The delivery system which these groups support has received widespread national publicity. In 1971, Nixon lauded HMO’s as a potential cure for the outrageous rate of inflation in health care costs. Liberals also espoused the cause, and ‘the HMO bill finally signed into federal law last December brought praises from both parties. Part of the $325 million which that bill authorized will be spent in Texas over the next fiv6 years, and the funds will no doubt intensify the fighting between other interest groups and the TMA. BESIDES political side shows, what can the public expect from HMO’s? According to Fortune magazine \(April, advantage of HMO’s is that their fixed annual fees hitch the profit to a new goal in medicine: keeping the cost down.” The fee for membership in an HMO usually covers a full range of medical services, including outpatient care and drugs, as well as hospitalization and surgery. But besides being a prepaid insurance mechanism, an HMO is a way of doing business which builds in cost controls. Using actuarial data to project exact utilization rates, HMO’s reduce expenses by employing the most efficient mix of other health professionals and medical staff; by combining the techniques of preventive medicine and outpatient care to reduce unnecessary hospitalization costs; by purchasing drugs and other supplies in bulk; by owning on-site diagnostic labs; and by consolidating records keeping and billing functions. Operating histories of HMO’s indicate that they can reduce a family’s medical expenses by as much as 20 percent. Sounds good, doesn’t it? Sen. Roy Harrington, Port Arthur, thought so, as did Rep. Mickey Leland, Houston. In the last session both sponsored bills to permit the organization of consumer-dominated HMO’s in Texas \(Obs., But the very idea that doctors might work, for management is anathema to the TMA. “Unclean!” they cried, “Unclean, unholy ‘ and illegal.” Illegal because subdivision 14 of Article 4505, Vernon’s Civil Statutes, prohibits a doctor from “permitting or allowing another to use his license or certificate to practice medicine in this State. . . . ” Judicial interpretation of this provision, has held that a physician employed on a salaried basis in a clinic totally owned by a non-doctor was, in effect, guilty of selling his license to another and therefore subject to having that license revoked \(Rockett, M.D. v. State Board of Medical Examiners, TMA counsel’ Ace Pickens appears to have little faith in the professional independence of physicians. He foresees a real danger that doctors could be made wage slaves who would compromise quality of patient care for the sake of saving their greedy employers a few pieces of silver. There are, of course, those who feel that physicians have already compromised patients’ interests without the intervention of a third party. In a consumer-dominated HMO, the governing board elected from the patient group would be unlikely to jeopardize the quality of their own care to cut costs unnecessarily, and they would be in a position to bargain for the rates to be charged them by physicians. But consumer-oriented arguments proved less persuasive in the Texas Legislature than the moneyed voice of the TMA lobby. The Harrington bill was killed in committee. The Leland bill was delayed to the eleventh hour, then crushed by a TMA all-points bulletin which brought legislators angry calls from their personal physicians demanding control over their own destinies. February 15, 1974 11 Health maintenance organizations By Jackee Cox