HMOs and Oversight of Medical Services

“Many States Fail to Adequately Monitor HMOs, Study Finds� (Nov. 29), which suggests that HMOs are not adequately regulated, begs a question: What oversight of medical services existed before?

HMOs have inarguably added an entirely new level of quality assurance and accountability that never existed when medicine was characterized by solitary physicians and hospitals.

Before HMOs, did anyone proactively monitor quality or check for malpractice judgments and adequate training? Did anyone go into doctors’ offices to survey patient medical records to see if appropriate treatment, preventive tests and follow-up occurred? How many doctors and hospitals issued quality report cards, as HMOs are beginning to do? Where did employers turn to find out how much preventive care their workers were receiving? Who provided case management for critically and chronically ill patients?

Because of these activities, I believe medical care in HMOs, on average, will always be higher in quality and more cost-effective than that which is provided in a haphazard fee-for-service environment.

HMOs perform these functions because their customers demand it, not because laws or regulatory agencies require it. HMO executives know that these activities and data help attract and retain customers. That is why every company in our industry is rapidly developing its quality analysis and data-reporting capabilities.

Calls to increase HMO regulation are usually based on the incorrect assumption that less expensive managed care must be lower in quality than expensive unmanaged care--an assumption promulgated by groups with a financial interest in sustaining fee-for-service medicine. The reality is that high-quality care is always more cost-effective, and HMOs are making medicine more, not less, accountable.

DANIEL D. CROWLEY

President and

Chief Executive

Foundation Health Corp.

Rancho Cordova