A woman recently came into my office, and when I asked her why she was switching doctors, she replied, "My other practice was too HMO-ey. I liked my child's doctor, and I had been with her a long time, but something's different about her office now." This mother is right. That "something different" is managed care. Touted as a cure-all for spiraling healthcare costs, managed care has caused an already sick system to get sicker. How did patients and doctors get into this mess? The answer is money. Grandmothers always said, "Money is the root of all evil," and, in this case, the infection that is causing more and more patients to be dissatisfied with their doctors and doctors to be dissatisfied with their profession. Parents want the best medical care for their children, here's an insider's view of why parents are having problems with their sick children in a sick system.

How the disease began. To understand how to cure the problem it's necessary to understand how the disease of managed care occurred in the first place. Once upon a time, medical fees were negotiated between patients and doctors. Over the years, payment for medical care gradually evolved into a "third party payer" system. This meant someone else was paying the medical bills and that someone else (also known as insurance companies) would eventually figure out ways to pay less.

The brainchild of insurance companies became managed care or more aptly managed costs. Managed care executives (who often earn much more than the doctors they manage) began to figure out ingenious ways of figuring out how the company could make the most profit by giving the least expensive care. The good news was that this new way of delivering healthcare, in theory, would translate into lower insurance premiums for patients. The bad news was the patients received a lower level of care. Of course nobody wanted to believe the simple law of economics: You pay less, you get less, and it's only years later that parents woke up and figured out that this reality of economic life is also true in medical care.

Deals with doctors. In order for managed insurance companies to lower costs and make a profit they had to negotiate lower fees without either the company or the doctor being perceived as delivering less care. Here's how the managed care companies managed to do this. First they instituted the "gatekeeper" system. This meant that the "primary care provider" (formally known as family doctor or pediatrician) would see all the patients on the plan, and the gatekeeper would decide whether or not the patient warranted seeing a specialist. The incentive behind the gatekeeper plan was to cut down on expensive medical tests and referrals to more expensive (and usually more qualified) specialists. While the gatekeeper idea looked good in corporate boardrooms, what patients didn't realize was that the gatekeeper worked for the owner of the gate.

The benevolent bonus. The next challenge for the company was to offer financial incentives to the doctor, oops the gatekeeper, to keep the gate closed. And here's the greedy little secret that is just beginning to leak out. The gatekeepers are paid year-end bonuses for the tests they don't order, the referrals they don't make, and all the other ways they save insurance companies money. This legal, but in my opinion highly unethical practice, was the root of all evil that caused the overwhelming infection in the current managed care system and it went downhill from there.

Once upon a time a doctor would order a test or consult or refer a patient to a specialist out of genuine care for the best interest of the patient. The doctor was not financially rewarded or penalized for ordering a test or making a referral. With the new medical map doctors are paid more to do less, and it's only human nature that many will do less.

The flat fee fiasco. Besides the gatekeeper system the next little germ to infect healthcare was the idea of the number crunchers in the managed care boardroom—a method of paying doctors called capitation. Under the capitated system the doctors were paid a flat fee per plan member per month (known in HMO lingo as PMPM). Under this payment system doctors were paid a set fee (usually around seven dollars) each month whether or not the patient is a healthy one who rarely visits the doctor's office or a sick person who needs frequent medical care. The capitation system for a while seemed to keep everybody happy, except the patient. Well, almost. Insurance companies loved capitation because it makes healthcare costs more predictable. Employers welcomed the capitation idea because it gave them a less expensive medical plan for their employees. Some doctors even initially welcomed it since it gave doctors who had difficulty building or maintaining a practice access to a huge volume of patients and a guaranteed monthly income. In theory this new system of healthcare delivery might even allow previously uninsured families to finally be able to afford healthcare insurance. In practice the percentage of people without medical insurance is higher than it has ever been. The gatekeeper in the capitated system and insurance companies were making handsome profits. HMO executives got yearly injections of healthy bonuses and the bureaucrats raked in profits.

Pay less get less. Besides the capitated scheme, which became the payment model of HMO's (Health Maintenance Organizations) the next new medicine to be offered to this increasingly unhealthy system was discounted fees. Major insurance companies negotiated (mandated) discounted fees to the doctors that participated in the plan. These became known as PPO's or Preferred Provider Organizations, which simply mean that doctors on the plan agreed to discount fees. In real life math this translated to discounted medical services. If you decide to pay less be prepared to get less.

Soon patients and the doctors were getting increasingly disillusioned with this new system, and it was becoming obvious that the cure was more harmful that the disease. So, lets get behind the desk of the doctor to see how the average doctor (a.k.a. primary care provider, gatekeeper) tried to manage the office in a managed care system. Picture a young doctor who has invested between eleven and thirteen years into their profession. Often graduates two hundred thousand dollars in educational debt and naturally feels deserving of a return on this investment. Historically, doctors always found a way to work within various insurance schemes whether they liked it or not and so the doctors struggled to adapt. The first realization was that it was difficult if not impossible to deliver adequate medical care to patients for seven dollars a month. The costs of running a medical practice were climbing, yet the fees were declining. Something had to give and that something was patient care. Here's how doctors tried to manage.

Become a businessperson. Doctors soon realized that all their training was geared toward making them competent doctors to deliver caring medicine. They were doctors who cared about patient care not so much about medical costs. Because of the new medical math, doctors had some extra education to do. And naturally the managed care companies were all too willing to help the doctors with the business side of their medical practice. I remember when doctors used to attend continuing medical education courses to become better doctors, now there are fewer topics on better medicine and more on better business, such as how to negotiate with insurance companies, how to read contracts, how to code insurance bills most profitably, etc. I remember my first realization of what was happening to the profession I care so much about was the changing topic of conversations in the daily doctor's lunches at the local hospital. One of the joys of my day was after making hospital rounds in the morning or at lunchtime I would join other doctors in the dining room for breakfast or lunch and we would discuss challenging medical problems, often sharing ideas on how to care for particular patients. Now, there is less medicine and more business discussed. The overall theme of conversation was disillusionment with paperwork, preauthorization's, and how to survive in the managed care world.

Lower the standard of care. The next survival tactic was for doctors to figure out how to cope within the system by providing less care in less time without the patients realizing it. I still remember how shocked I was at hearing an executive of a large HMO opening his address to a group of doctors with, "Your goal, doctors, if you are going to survive, is to lower the expectation of your patients." I couldn't believe my ears. This was an audience of doctors who were often delivering life-giving medical care and giving life-enriching advice, not people delivering packages. Yet the company management is suggesting that patients need to be taught to expect a lower level of care, or what another HMO exec called it "dumbing down." Am I supposed to "dumb down" or lower the standard of expectation of my patients to make a living? Something was becoming increasing uncomfortable with this new medical math.

See more patients. The obvious answer to this new math was if insurance companies were paying less per patient and the cost of running a medical office was increasing the bottom line (as in so many realities of life the term bottom line was finally reaching medicine) was to see more patients per unit of time. Naturally, managed care companies were willing to help doctors "manage their patient flow" more effectively. The term "cost effectiveness," (a term, for reasons you will later read, I've grown to hate) became the office management buzzword. It didn't take an MBA to realize that if your being paid half as much you just see twice as many patients.

Get help. Gradually working harder and earning less took its toll on doctors who realized that it was no longer cost effective for them to see each patient. Now enters the medical assistant, a new treatment for the managed care wounds. Medical managers soon realized it was not "cost effective" for a doctor to see patients for routine check-ups. In the spirit of free enterprise, medical assistant schools mushroomed to supply increased demand for more "cost effective" healthcare providers, and if the advice of medical managers rang true—lower the expectations of the patients—medical assistants seemed to be the obvious answer. They could see patients for a lower cost than the doctor could. Some patients even began to like the medical assistants because they had more time than the doctor did. And, perhaps, the medical managers had a point: you don't need to go to a doctor whose had thirteen years of medical training to tell you whether your infant should start on bananas or rice cereal. The problem with this new person in the medical office was if the family doctor never did the well child check-up the doctor looses that frame of reference. It's easier for the doctor to be able to make a more accurate diagnosis when your child is sick if the doctor has a frame of reference knowing the child well. But, then, this rational thinking is not cost effective under the new medical system. Select the Patients. Seeing more patients in less time and having "capitated" patients seen by a medical assistant seemed to be temporary treatments to survive in the managed care arena. It soon became obvious that it was not "cost effective" to see the very patients who most needed a doctor—sick children. What about the child with a chronic illness, say asthma, severe behavior problems, ADD, multiple food allergies, etc., who sometimes needed weekly medical care? In the new medical math these patients were not "cost effective". Translation: kids who really needed medical care couldn't get it. This fact of medical office life gave rise to the next degrading label for sick children who needed frequent medical care. They were dubbed an "overutilizer". Translation: the doctor looses money on this patient. Or, as one mother who transferred to our practice from her HMO confided to us, "Every time I tried to get medical care for my sick child I felt there was a price on his head." Whereas in the old system of medical care this was just a patient that doctors wanted in their medical practice. After all that's the reason we became doctors. With the new medical math "overutilizers" often became increasingly dissatisfied with their primary care provider and kept switching providers until they realized that, as one mother put it, "The only way I'm going to get adequate medical care for my child is to be willing to pay for it."

Not only were the "overutilizers" not cost effective in the doctor's office, if the doctor tried to provide competent and caring medical care even with financial disincentives, that doctor, under the capitated system would often get dinged by the insurance company. Because "overutilizers" (sick patients) usually needed more tests and more referrals to specialists the primary care provider is forced to open the gate wider and more frequently and become an advocate to get authorization for these extra costs from the managed care company. The end result is the doctor then gets listed on the company's computer as an "overutilizer." This became a lose-lose situation. The doctor is financially motivated to weed out "overutilizers" from his medical practice and the insurance company tries their best to get rid of the "overutilizing" doctors. This actually happened to Dr. Thomas Self, one of the top pediatric gastroenterologists in Southern California and the specialist to whom we refer the children in our medical practice. Because Dr. Self became an advocate for his patients and was delivering a high quality of medical care and ordering tests and referrals appropriately, the managed care company used various tactics that eventually "dropped him from the plan." This atrocity evolved into a widely publicized lawsuit against the company, which Dr. Self eventually won. By fighting against the sick system, Dr. Self injected a ray of hope among the many doctors who still care first about their patients and second about the company they work for.

Risk. Besides being an "overutilizer," another tag sick patients often get is a four-letter word, risk. Because of a legal loophole in the law prohibiting patients from suing their HMO's for denying medical care, the doctor must assume responsibility, dubbed in HMO lingo as "sharing the risk." The sicker the patient, the more risky that person becomes to have in the office. Again, patients who need doctors the most—the young, the sick, and the elderly, there is a disincentive to have them in the practice. The worst disease of mixing money and medicine in my thirty years of practice was a five-year-old boy I recently saw in consultation, and the mother showed me the child's newborn records in which a doctor had written, "not cost effective" in making the decision to discharge the newborn from the hospital and denying surgery for what was judged an incurable deformity. This brought the lioness out in the mother who became a fierce advocate for her child, fought the system, got the necessary surgery for the child (which the whole family scraped up enough to pay for) and now has a happy, healthy, five-year-old as a testimony to her efforts.

Don't ask; don't tell. Another remedy to cope with this sick system was to keep secrets like "capitation" and "overutilizer" secret. If you don't ask insurance companies what "capitated" means, they won't tell you. Neither will your doctor. Under capitation, your doctor works for your insurance company or your HMO instead of being your advocate. That's why many insurance companies instituted "gag-clauses" hoping that patients wouldn't find out that the more care the doctor denies, the more money the doctor makes. These clauses prevented doctors from discussing how medicine and money mixes in ways that may be hazardous to patient's health. Due to consumer awareness, such clauses are becoming increasingly illegal.

Work less. The final remedy to help doctors cope in this new system was by decreasing their availability to their patients after hours. After all, this made good economic sense. If under the capitated system you were not paid for seeing patients after hours or being available for that 3 a.m. phone call (translation being available as a doctor when your patient really needs you) it became deemed "not cost effective" for doctors to remain on call. In the American free spirit of enterprise then came after-hours clinics to see the patients of these off-call doctors and these centers were all too willing to contract with the managed care companies to see a large volume of patients after hours at a lower cost.

Once upon a time, the patients chose doctors because of the three "A's"; a doctor had to be able, affable, and available. With the new math, a fourth "A" is added, affordable. Managed care has managed to attack all of these 'A's. Doctors are motivated to become less able since much of their continuing medical education time is spent more on the business aspect of medicine rather than the profession. Some managed care providers are becoming less affable. That personal, even therapeutic touch and bedside manner is now deemed too expensive, or "not cost effective." And, because under the capitated system the doctor is no compensated for after- hours care, many doctors are not longer available. Not only are patients disgruntled, the morals of medicine are at an all time low, as is the care. There was a popular cartoon in a recent medical magazine with the caption "Will operate for food." Doctors are forced to play the company game in return for their fee. California, the most affluent state, now leads the nation in managed care. Even people who can afford better medical care aren't asking for it. Oftentimes, a person will come into my office, and I feel like saying, "What's a person with your income doing with a plan like this?" Dr. Arnold Relman, editor-in-chief emeritus of the prestigious New England Journal of Medicine once said, "The entry of for-profit companies into healthcare may be the most troubling development in medical care of this century."

Be your child's advocate. Don't leave healthcare reform up to the government. The powerful insurance lobby injects millions to keep this sick system from getting well. The various patients bill of rights seems to be chronically stalled in Washington. Don't rely on your employer to be your insurance doctor. They also have a financial motivation for keeping the system sick. Your doctor is powerless to make a change. Parents must. Since insurance companies have become a barrier to children receiving the best medical care, be your child's advocate. The medical system, like all others, operates on the principle of supply and demand. Your doctor, and your insurance company, will supply the level of care that you demand. If you feel your child needs a specialist, insist on it. If you feel your child needs more time with the doctor or needs to see the doctor instead of the medical assistant, demand it. One pediatrician who was a victim of managed care recently confided to me, "Many patients really don't seem to care." Most doctors want their patients to be happy with the level of care they are receiving, and your doctor won't know you're unhappy unless you tell them.

Do your homework. Do your doctor a favor and know what your insurance coverage is. Here's how to make points with your doctor. Before your office visit, call your insurance company and inquire: have you met your deductible; are immunizations and well childcare visits covered? How many? And, above all, is your child enrolled in your medical plan and is your child's doctor on that plan? If you come in your doctor's office with this information (or ask your insurance company to fax your doctor's office a printout) you merit a sticker and perhaps a place on your doctor's preferred list. Doing your homework tells your doctor that you care enough about your relationship and your doctor's care to save the staff and the doctor time; instead of waiting to see the doctor and the doctor waiting to see your child; while a staff person hangs on the phone waiting for "preauthorization" from on high about what is covered on your plan. Next time you're in a doctor's office, listen to the office staff try to extract insurance coverage from the company, "Please hold, an agent will be with you shortly."

Set priorities. Define your priorities. What insurance plan can you afford? How important is the time and availability to your family? Do you want a pediatrician who helps your infant through the colicky first few months, the trying two's, the germ-of-the-month at school, and the teen troubles? Do you want a doctor who is competent, caring, and committed, not just cost effective? I once counseled parents who were struggling with a decision on whether or not to pay more for an insurance policy, and was it really worth it? To help them in their decision, I queried, " If your child was critically ill, would you want her cared for by the lowest bidder?" They got the point.

There is tremendous joy in being a pediatrician. I recently attended the wedding of a twenty-two year old young man who I cared for since he was a 4½ pound preemie in the hospital. I felt proud to have the privilege of being this child's doctor and knowing that in some small way, I had a lasting influence on his life, and no managed care company had interfered with these priceless memories.

Ask and they will tell. When choosing an insurance plan, ask how your doctor is paid: fee for service (the old fashion way) or could you unknowingly be in a capitated fee plan? Ask your doctor if, under your plan, he or she is paid an incentive bonus. After all, many businesses are required to disclose potential conflicts of interest why shouldn't the doctor?

Show the doctor you care. One day, during a patient's first visit to our office, I asked the mother why she chose our practice. She replied, "Because you're on my insurance plan." Lose points!

Show your employers you care. It's unhealthy P.R. for a company to get the reputation that it's offering a cut-rate insurance plan to their employers. While most companies offer several plans, the bottom line is that they want you to choose the least expensive, which is HMO capitated medical coverage. Here's another little company secret: as an incentive for employees to choose a less expensive plan, employers often a non-HMO plan that is prohibitively expensive for the average wage earner. Companies are now realizing that adequate medical coverage is a healthy perk to offer their employees.

HMO's (Health Maintenance Organizations) are usually pre-paid or capitated insurance plans in which individuals, or their employers pay a fixed monthly fee for services, instead of a separate charge for each visit. Most HMO's require authorization by a primary-care physician to be referred to specialists for care. More established HMO's, such as the Kaiser Permanente Organization, employ their own doctors at their own hospitals or clinics. Of all the HMO health plans, Kaiser Permanente has, over the years, have received the highest marks. Yet, in recent years, even this venerable organization has been struggling against competition by cut-rate HMO's.

PPO's (Preferred Provider Organizations) pays a doctor on a fee for service basis. Yet, the patient pays a nominal co-pay. While usually a bit more expensive than HMO's, patients have the freedom of choosing doctors and hospitals within the plan's network. Because the doctor is paid a fee for service under the PPO plan, patients perceive they will get better medical care, especially when these plans are entitled most clever marketing plans, such as "prudent," "preferred" or "select." Buyer beware: these plans often mean that the insurance company has negotiated with the doctor a discounted fee, which often translates into discounted medical care.

POS (Point of Service) is a relatively new insurance scheme developed for patients dissatisfied with the HMO system, yet are unable or unwilling to pay the higher premiums of a PPO plan. With POS, you have a primary-care doctor, like an HMO, yet, like a PPO, you are allowed to seek medical care "outside the network" for an additional fee, of course. Buyer beware: most point of service plans, like HMO's, pay the primary-care physician a capitated fee.

On your own, sort of. Commonly known as "major medical," these plans offer the most flexibility in choice of doctor and oftentimes quality of service. With this type of plan, you pay a high deductible (one- or two thousand dollars a year per family member), yet the monthly premiums are drastically lower. Oftentimes what you pay the doctor in fees is less than what you would have paid the insurance company in higher monthly premiums. Buyer beware: Even in some major medical plans, the insurance companies have mandated that the doctors only charge the patient the discounted fee, which can translate into discounted medical care.

On your own, completely. Many parents are beginning to realize that in certain medical circumstances, to get proper medical care for their child, they are willing to pay the doctor the old fashion way—cash. With this type of non- plan, a patient will call the office and inquire what the doctor's fee will be for a half-hour consultation. They let the staff know that they will be paying for this themselves. Obviously, with this type of arrangement, the doctor and the staff can focus completely on the patient without having to waste time filling out insurance forms, holding on the phone for preauthorization and repeatedly chasing down an evasive clerk to find out why the claim has been mysteriously "denied."

Because I care about the medical care your child is getting—or not getting, I have been blunt. I have given you straight talk about a current medical system and what you can do to help fix it. I care deeply about the quality of my profession. Our two oldest children, Dr. Jim and Dr. Bob are now partners with me in our pediatric practice, and our third oldest child, is now one-half Dr. Peter, who has just finished his second year of medical school.

It's not uncommon for a doctor to run into former a patient at a soccer game, and during the dialogue, the patient says, "Remember me, you use to look after my child, but our insurance changed." Because patients are either unwilling or unable to fight rather than switch, doctors, especially pediatricians, interpret this as lack of caring about a long-term relationship between the pediatrician and the child. One of the joys of pediatrics is becoming involved early on in the care of a child and growing with that child and witnessing the person that child later becomes. In the old medical system, pediatrics was a long-term investment. In the new medical system, it's more like a short-term business relationship.