Watch the video below to learn more about undisclosed conflicts of interest regarding HMOs and PPOs and explore the difference between HMOs vs. PPOs.
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Video Transcript
Timestamps
0:00 Intro
0:19 Undisclosed Conflicts Of Interest Regarding HMOs And PPOs
1:36 Undisclosed Conflicts Of Interest Regarding HMOs And PPOs: Undisclosed Conflicts
2:36 Undisclosed Conflicts Of Interest Regarding HMOs And PPOs: Kickbacks
3:02 HMOs vs. PPOs
3:51 HMOs vs. PPOs: HMO Payment System
6:00 HMOs vs. PPOs: HMO Conflict Of Interest
9:14 Be Your Own Healthcare Advocate
My name is Dr. Kenneth Chessick, and I’m an attorney and the principal of the Law Office of Kenneth Chessick, MD.
0:19 Undisclosed Conflicts Of Interest Regarding HMOs And PPOs
I want to talk today about conflicts of interest in medicine and why they are a danger of which you need to be aware and protect yourself. Conflicts of interest are everywhere. Every time you see an advertisement, every time you see a car commercial, a commercial for food, those are all conflicts of interest. The advertiser and the car company wants you to buy their car and you know that and you know that you have to listen to what they say and be a little skeptical and judge the veracity of that communication. It’s the basis of all commerce, there’s nothing wrong with disclosed conflicts of interest and conflicts of interest that we know exist.
In medicine, however, there’s real problems because there’s a great deal of potential for undisclosed conflicts of interest, and those undisclosed conflicts of interest can be very dangerous to you and your health. You need to be aware of those conflicts and be an educated, advocate for your own healthcare.
1:36 Undisclosed Conflicts Of Interest Regarding HMOs And PPOs: Undisclosed Conflicts
Now, what is an undisclosed conflict of interest when it comes to medicine? Well, I’m a general surgeon. When I have a patient come to me and they’re complaining of pain in their abdomen and I tell them, well I want to do a test and I think this might be your gallbladder and I ordered that test, and lo and behold, you do have a problem with your gallbladder stones, and I tell the patient, well I think that’s causing your symptoms. Now we want to take that out and the cost of that operation I disclose to you whether it’s a thousand dollars, fifteen-hundred, depends on what decade we’re dealing with. But it’s a disclosed conflict of interest and I disclose that to you and you understand that I’m going to personally benefit from that. There’s nothing wrong with fee for service. Medicine, which is a disclosed conflict of interest.
2:36 Undisclosed Conflicts Of Interest Regarding HMOs And PPOs: Kickbacks
What is a problem is where doctors are paid or healthcare providers, whether it’s an organization, a corporation, or a larger system, where they have hidden ways in which they get paid, and that can affect their interests.
3:02 HMOs vs. PPOs
Two primary examples of that are HMOs and PPOs. HMO is an acronym for healthcare maintenance organization. Tthey’ve been around for many many many decades. PPOs are provider organizations, preferred provider organizations. That’s also something that’s been around for many decades. What you need to know as an educated consumer of healthcare services is what that means in the HMO/PPO system. To do that, you need to understand how doctors in HMOs and PPOs too, get paid.
3:51 HMOs vs. PPOs: HMO Payment System
In HMOs, the doctor is generally paid a salary from that organization. An alternative way they do it is by providing money to doctors for a specific number of patients in their practice. Every patient in that practice, whether they use the medical care services or not, generates revenue to that doctor and that doctor’s medical practice. If you don’t use those services, they get paid if you do use those services, they get paid. Doctors and these HMO systems can vary in the specifics. But generally speaking, doctors get paid bonuses. We’ll call them and the HMO provides a fund for laboratory and x-ray and MRI and other testing, and for that specific number of patients in their practice, if the doctor does not utilize all of the money in that fund for testing, that depending on the system, that doctor may get a bonus based upon what monies he did not expend from that testing fund.
Similarly, there’s a separate fund in many of these HMOs where it provides for funding for hospitalizations and for consultations with other physicians. Once again, if the doctor orders a consultation or a hospitalization that’s the cost of those services to the hospital and to the consultants, is deducted from that fund. If there’s any money left over in that fund at the end of the year, the doctor gets paid a bonus based upon that.
6:00 HMOs vs. PPOs: HMO Conflict Of Interest
So the doctor has a vested interest in not utilizing services unless they’re absolutely necessary, and there’s a great temptation for that doctor to not order tests if he doesn’t think they’re essential or to wait when ordering those tests. Here in lies a problem, not ordering necessary tests at all. When the doctor orders a test for that patient, that’s actually going to cost him money based upon what his bonus is at the end of the year, both for those tests as well as consultants and then from another fund for hospitalizations. Indeed if he orders too many tests and too many tests are determined generally by a plan administrator, not by a physician based upon patient need, he may be dropped from that HMO. He may be dropped from that healthcare organization.
The doctor has a vested interest in withholding healthcare services. In fact, that’s the whole basis, the theory that HMOs use to reduce the cost of healthcare. It’s planned into the program, it’s planned into the system. The problem is that you, the patients, don’t know about that. You are being affected by an undisclosed conflict of interest, and that can be dangerous.
Now, let me stress, I think the vast majority of physicians consciously do not withhold care that is necessary based upon getting paid. But I must tell you that there are cadres of doctors who and there’s significant numbers of them, but it’s still the vast minority who are very much interested in their own well-being and are willing to sacrifice patient welfare for that goal, that end.
Now we know that a small number of doctors are responsible for the vast majority of medical malpractice lawsuits, and I stress again, I think the vast majority of doctors consciously do not withhold care that they think is necessary. But it’s up to them to decide what is necessary and that’s a slippery slope.
One of the most common causes of medical negligence is the delays in the diagnosis of conditions like cancer or heart disease or strokes. You all know that cancer and cardiac disease, cardiovascular disease, strokes, etc. constitute the two single most causes, common causes of death to patients in America. So this is a serious problem.
9:14 Be Your Own Healthcare Advocate
Now, what does that mean? Practically for the patient, the patient has to be aware of this bias that’s built into the system to withhold care, to withhold testing with all hospitalizations, and you have to be a zealous advocate for your own care.
I’ve talked about conscious actions by a small number of doctors who recognize that there’s a need for patients testing and need for patient care and don’t do it. But there’s also unconscious bias. Maybe the doctor isn’t thinking about that but he recognizes at least without consciously making that choice that maybe that we can get away without doing these tests, maybe we can get away without getting another opinion, getting a consultation from a specialist. Those are the things that the patient must be aware of and if you’re not satisfied with the explanation of the doctor in refusing to get a second opinion and refusing to get necessary testing, that ultrasound, the gallbladder that I described, then you will not understand the system.
You have to be a zealous advocate for yourself and your loved ones, and if something does not make sense to you, if what he’s saying seems like he’s dragging or she is dragging her feet and not doing the necessary testing, you must demand that. You must demand it until you get an explanation as to when it was, what the plan is, when those tests will be done, and what is going to trigger the occurrence of those tests because I stress once again, delays in diagnosis of cancer, delay in diagnosis of infections like meningitis, particularly in children, delays in diagnosis of heart symptoms which lead to heartattacks or strokes, are the most common causes of medical malpractice, and the HMO and PPO systems both encourage the withholding of medical care. They’re designed to withhold medical care until some trigger point is hit which demands that those tests be done, those consultations be done, and the appropriate care be given.
If you have any questions about conflicts of interest as they apply in medicine, I’d be happy to talk to you about it. Thank you.
