Abigail Trafford (The Post)

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What kind of health care do you have? Are you satisfied with your coverage? What do you think should be done to improve the country's health care system? Join Post Health columnist Abigail Trafford and her guest Dr. Linda Peeno to discuss the issues of managed health care on Tuesday, May 21 at 2 p.m. EDT.

What does "Jurassic Park" have to do with managed care? Actress Laura Dern of "Jurassic Park" has turned from the prehistoric jungle to the high-tech jungle of modern medicine in the Showtime movie "Damaged Care," which airs on May 28 and May 29. It is a devastating portrait of a health care system run amok.

In the movie, Dern plays a real physician named Dr. Linda Peeno of Louisville, Ky. Peeno worked for several managed care companies as a medical reviewer approving and denying claims for payment. She is now one of managed care's strongest critics.

The transcript follows

Editor's Note: Washingtonpost.com moderators retain editorial control over Live Online discussions and choose the most relevant questions for guests and hosts; guests and hosts can decline to answer questions.

Abigail Trafford: Hello everybody. Got a story to tell us about your health insurance company? Got a question? Join us now for a discussion on managed care. What it is--where it's going!

Abigail Trafford: Dr. Peeno. Hello and welcome to Health Talk. You are the subject of the television movie: "Damaged Care!" How does it feel to be played by Laura Dern? And what is the movie--and your life all about?

Dr. Linda Peeno: Hi, Abigail. It feels very strange having anyone portray your life, but Laura is fantastic. She wanted to do this project, and we talked at length before she starting filming, in order for her to understand the issues. She took a lot of time to understand managed care as well as my own way of being anc acting. Ah, what is my life about: I think it is about trying to find a way to keep my love of medicine and my care of patients at the forefront of any health system we have.

Abigail Trafford: What is the message of the movie?

Dr. Linda Peeno: The movie tried to capture how the system we call "managed care" has changed the way patients are viewed. The pressure by organizations, whether for profit or nonprofit, to save or make money, and their distance from the actual patients in need, put an emphasis on limiting and denying care--turning medical decisions into "payment" or "coverage" decisions, rather than care. Although we hear isolated stories, there hasn't been anything that captured how the whole system worked, and people need stories to understand complext things like how managed care works.

Abigail Trafford: In your experience as a medical reviewer for managed care plans, you saw companies putting profits over patients. How does this happen?

Dr. Linda Peeno: As I mentioned in the previous question, when the emphasis shifts to numbers and dollars, we forget that we are impacting individual people's lives. Health plans use variables to measure their success, like "hospital days per thousand" (how many hospital days used), and they try to lower this number because this results in savings or profits. Suddenly they are focused on percents and denials, forgetting that for a particular patient put out of the hospital too early this has real medical impact.

Washington, D.C.: I have had friends who have used the French health care system & who loved it. Is there much interest in overseas models that work well & that might work here?

Dr. Linda Peeno: I am actually in Spain right now attending an international conference in which various health systems will be discussed. Unfotunately, our press and policy makers are not very interested in looking at other systems, other than to tell us how bad they are. But we should be examining the successes of other systems, where people get more care and are more satisfied than many Americans, especially those in our country who have no coverage.

Vienna, Va.: My career path includes employment with two managed care organizations. I am convinced that when it comes to healthcare; profit and quality patient care do not mix. Two common practices come to mind:

(1). Withholding payments to doctors who make referrals is common. Only when the physicans limit their referrals are the dollars released. The patient is the looser.

(2).CEOs can make millions in these organizations. Rather than watching CEOs yank dollars from the system (paid by us thru our premiums) and stuff their pockets, it would be nice to see the money targeted for better quality patient care. The patient is the looser.

(3). Organizations produce physician report cards annually. The physicians are ranked by a number of metrics - most are cost related. For example, average lengh of stay (goal: get patient in and out of hospital as quick as possible).

Dr. Linda Peeno: Your experience is exactly the experience that led me to leave my corporate work and begin to find ways to educate the public. We have more than enough money in the system; too much of it is going in the wrong places. Eventually we are going to figure out that we cannot pay for the business of health care and health care at the same time. Unless we do something, we are going to keep supporting the business of care--CEO and executive salaries and bonuses, marketing, administrative costs, etc.-- all at the expense of real suffering and death by individual people.

Washington, D.C.: I've think I've heard about a Bush administration has a proposal for medical accounts. What is that all about? Does it have promise? What are its shortcomings?

Dr. Linda Peeno: The problem with medical savings accounts is that it requires savvy, informed public to make the right choices. The other disadvantages include: they don't control costs really; discourages prevention; their complicated to administer because of tracking expenses and allowed expenditures and their approvals; the sickest are penalized; and a government accounting agency estimates that they would raise health care costs significantly.

Washington, D.C.: Realizing that Dr. Peeno worked both for the for profit Humana and the nonprofit Blue Cross, is the bottom line behavior of both
qualitatively and quanitatively similar?

Since patients and physicians and often purchasers of care are dissatified with managed care why shouldn't we extend Medicare,a well accepted program, to people under 65? There would be common benefits and reimbursements. The uninsured would be covered and there would be few arbitrary decisions based on short economic gains.

Abigail Trafford: Let's take this in two parts--Dr. Peeno, why is the behavior the same between profit and not for profit plans? You would think that nonprofits like Blue Cross would be less interested in money. Please explain this.

Dr. Linda Peeno: Bacially, they both have the same pressures and goals, which are to save money (or make it) and we have developed a managed care model that limits or denies care to achieve that end. The focus on annual budgets means that there is not incentive to focus on long term costs savings, so both organizations end of resorting to the same tactics. We see this already with Medicare HMOs that use the same tactics to limit costs as the commercial managed care companies do.

Abigail Trafford: And what about extending Medicare to younger Americans--or even making Medicare a model for a national universal system? Are you in favor of this?

Dr. Linda Peeno: Although I am in favor of universal converage, I think we cannot have it administered through the same companies that use current managed care tactics in the commercial settings, like Medicare HMOs do. We still have to fundamentally overhaul the way we view "managed care" and unless that is done, I wouldn't want Medicare as it is right now in the managed care setting extended.

Bethesda, MD: Aspects of managed care, e.g., increased workload, substituting R.N.s with less skilled care providers, limits on time for office visits all are factors that contribute to error; how might efforts be implemented to document the extent of those problems? How might the HMOs and health insurance companies be persuaded to rectify those factors to reduce the likelihood of error?

Dr. Linda Peeno: Some of the factors you have idenitified are the result of the kinds of systematic changes that have occurred from the effects of managed care's cost-cutting. If we made managed care plans legally accountable for the consequences of their decisions, they would be incentivized to ensure that contracted hospitals had appropriate staffing, training, etc. because this would have some influence on the results of their medical decisions. We also need payment arrangements that incentivize REAL quality, not only at doctor, but also facility levels.

Washington, D.C.: Given the problems you mention with the overall health care system, is there any hope for parity for mental health coverage -- that is, comparable coverage?

Dr. Linda Peeno: I hope so. If we don't we pay increasingly serious problems in other areas of our society. Eventually we have to get the message.

Pittsburgh, PA: My sister had a double mastectomy two months ago. She was admitted to the hospital at 8:30 on a Tuesday morning, had surgery from 12:30 til 5:30; was in the recovery room til 8:30 p.m.; and was sent home the following day at 1 p.m., IV's and all ... and she has "good" insurance. I was and am appalled.
Our health care system is in a really bad place right now and I don't see it getting any better.

Abigail Trafford: Dr. Peeno--is this typical? Are all the incentives to decrease the length of stay in a hospital as much as possible? Can a physician stand up and say no! My patient needs to stay in the hosptial another night?

Dr. Linda Peeno: Unfortunately, this is typical. What is happening is that people who think they have "good" insurance find that their benefits are determined and administered through the same machinery that the most restrictive policies us, which means you may pay for regular insurance and get HMO care in return. As the movie points out, hospitalizations are the most expensive part of health care, and they are what the industry calls "low hanging fruit" -- i.e. the easiest the pluck (control). We are radically changing the quality of medical decisions through actuarial companies coming up with lengths of stay assignments that are used by plans. Doctors can try to fight, but when the plans have these formulas, it is hard for a doctor to make a case for something different. If the doctor refuses and does what is best for the patient, the patient gets stuck with the bill--so that is a dilemma for doctors. BUT, patients and doctors do need to fight for what is in their best interest...otherwise the system prevails, and care just keeps getting ratcheted down.

Abigail Trafford: One thing doesn't make any sense to me. If managed care plans are saving money by denying and limiting payment for care, why are medical costs going up so fast? I thought managed care was a way to control rising costs of health care?

Dr. Linda Peeno: Very good question: managed care had its great profitable days initially with all the one-time savings gotten through dramatic decreases in hospital stays and reduction in testing and referrals with gatekeeping, etc., but then it got harder to keep squeezing out those savings, and the machinery to do that kept costing more and more money. So, in order to keep their levels of profitability, they have to increase costs, continue to limit care more. In addition, the population continues to age and technology increases. So we keep paying higher premiums and getting less care: guess who keeps winning?

Gaithersburg, Maryland: If there is a fixed amount of money for health care, either within a government program or a company health plan, don't we need to make the best use of the money to get
the most "health-years" of life per dollar.
I would rather spend money for 200 visits by
a visiting nurse to new mothers with sick children than spend the same money on some
expensive procedure for someone age 85. Is this built into plans in any way?

Dr. Linda Peeno: No, that kind of analysis isn't really built in, except when it benefits the health plans. There is a scene in the movie about a lawsuit in which the company was making choices between groups of people, funneling resources to the group from which they could extract the most savings. The idea behind rationing (if we really even need to do that) is that if we deny something to one person, we give the savings to someone else who benefits more. That is a societal decision, not a business decision. We are the only country that rations health care by the persons who benefits economically from those decisions.

Abigail Trafford: Why haven't doctors complained more about managed care? Where are organizations such as the American Medical Association in calling for changes in the system?

Dr. Linda Peeno: I think most doctors were caught off guard by the changes. Also, there is something called the "hassle factor" -- a tactic we used to beat physicians down so they would eventually comply just out of frustration, lack of time, etc. Many doctors are so financially strapped by med school loans, and other financial responsibilities, it is easier to capitulate than fight it. Also, many physicians just haven't understand the systemic nature and effects of what m. care has evolved to.

Washington, D.C.: This question concerns accountability, and states' independent panels to review decisions denying payment for treatment. How many states have these panels, how long have they had them & how well have they worked, and what has their impact been on managed care in their states?

Dr. Linda Peeno: I don't have the current number of states, but many do seem to be overturning some of the decisions. The problem is that you have to have a denial in order to access these organizations, and plans have become sophisticated in their ability to "deny without denying" -- i.e. through obstruction, delay, substitution.

Abigail Trafford: Dr. Peeno, you have been an expert witness in a number of cases against managed care companies. Tell us about these cases. Have they led to changes in the way plans now "manage" care?

Dr. Linda Peeno: First, the cases are from the small subset of people who have the right to hold plans accountable in court. Many of the cases involve extreme suffering or death that has resulted from the failure of managed care practicies or their negligence. I am not sure of the impact. I would like to believe that it makes health plans more accountable, but I fear that they still know that this is just the snow flake on top of the iceberg and they haven't really changed practices.

Abigail Trafford: If you had a magic wand, what kind of system would you like to see in place of the current "managed care" system?

Dr. Linda Peeno: I don't want to throw out the baby with the bathwater, and I think that any system will have to have ways to control costs and ensure quality -- so I would like at least to see that "managed care" practices to be for the benefit of patients, not to their detriment. I would like to see everyone in health care accountable for the consequences of their decisions.

Burke, VA: Dr. Peeno, I have worked in the managed behavioral health field for the past 14 years. During that time, managed care firm leadership has shifted from healthcare practitioners to MBA's and financial analysts. Not a good trend. But, I also see that corporate America is at the root of the problem, by constantly attempting to reduce benefit costs to help their own bottom-lines, with little consideration to the ultimate price they pay by having undertreated employees in the workplace. Additionally, corporations continue to reduce the amount of money they will pay for managed care contracts, so the managed care companies cut their service quality even more, at the expense of members. How can we get corporations to return to a better balance of care for their workers?

Abigail Trafford: Good points. And in the movie, a man is denied a heart transplant. In the fine print, heart transplants weren't covered in his plan. Presumably it was his employer that chose the plan and made or approved of the exclusion. Who is responsible here? The plan or the employer? Let's talk some more about the role of corporate America in managed care.

Dr. Linda Peeno: This is an important point that we don't discuss enough. As long as we have our health benefits tied to employment, we are at the mercy of what our employer chooses to offer us. Under some self-funded plans, the employer often acts like the HMO--now with the incentive to limit or deny care.

Abigail Trafford: The U.S. pays more money per capita for health care than any other developed country. Why are people like Frustrated Temp penalized with costly, inadequate coverage--and nearly 40 million people have no insurance. Where is all the money going?

Dr. Linda Peeno: As in the other answers, we are paying for the business of health care, that includes executive salaries, marketing, and subsidy of the machinery that is used against the patient to limit and deny care--as well as expensive buildings, art work (see the scene in the movie about the sculpture).

Lexington, KY: The idea that plans "deny without denying" simply is not true, at least in our state. We have laws that specify exactly how much time we have to adjudicate a claim. When did you leave the managed care industry?

Dr. Linda Peeno: I am from Kentucky, and I am not talking about time to adjudicate claims. I am talking about subtle tactics that never allow a medical need to rise to the level of a claim, e.g. a capitated physician who is acting like a virtual medical director of a plan who doesn't do something and doesn't tell the patient, about the health plan that doesn't acutally deny something, but substitutes, delays, obstructs so a person never gets the care. You don't have a claim until you get care--I am talking about not getting the care and all the methods used to stop it before the claim is generated.

Abigail Trafford: Dr. Peeno. There is a need to ration resources for health care--and get the most value for our spending. We can't just write a blank check for medical care. What system do you propose to ration health care--to set priorities and make decisions on what will be covered--and what will not?

Dr. Linda Peeno: I am not convinced we need to ration care. But if we do, then we have to have an ethical system that makes fair decisions, and ensures that the money saved goes back into the health system to benefit patients, not stockholders.

Medical accounts: Even a fully-informed public can't effectively compete for needed care under medical accounts because there is a two-tiered system (at least). If you have bargaining power, you can get providers to lower their "sticker price" for you (also called negotiated discounts). But an individual waving around a medical account has no bargaining power whatsoever, so pays the sticker price.

Abigail Trafford: How can consumers with an medical savings account get discounts? Otherwise they will pay much more for basic services.

Dr. Linda Peeno: Medical savings accounts are usually affiliated with some insurer and the discounts come through that avenue, otherwise, you are right, you pay full charges.

Washington, Dc: Hi Dr. Peeno

What is your view on President Bush's call for Mental Health parity? How extensive will coverage become under his proposal?

In my experience insurance companies are extremely stingy with Mental health coverage. IE: With regard to psychotherapy for depression most companies only cover weekly visits for those diagnosed with "Major Depression." The DSM criteria for this diagnosis is, among other things, someone at risk for suicide.

Will we ever see adequate coverage for lower level (yet significant) mental health problems?

Dr. Linda Peeno: The problem with "low level" mental health is that it is like "low level" care in other areas -- we just don't understand its value, especially its preventive value. I used to hear the word "creature comforts" applied to many things that were not "absolutely necessary" by a plan's definition. We need to have a system that sees the value in such resources.

Frustrated Temp: What can we do for those of us who have exhausted COBRA or are self employed and must pay outrageous rates for insurance? I pay over $300/month for health insurance for myself, no dental, no vision, no prescription card. Why can't these people pay into the federal gov't system and get a better deal? Paying this amount each month is draining me dry.

Dr. Linda Peeno: I agree. I went on COBRA and now have insurance that I must purchase directly, and it costs a fortune! I don't know the solution, but it is related to our employment based system.

St. Paul, MN: At Blue Cross and Blue Shield of Minnesota we have embarked in an engagement study and process that gets EVERYONE involved in the discussion. We've asked these questions: What kind of health care system do Minnesotans want? How much are we willing to pay? and Who should pay? Needless to say, the last two questions have been the most difficult to get some agreement on. How would you answer these and would you be interested in seeing the results of our studies so far?

Abigail Trafford: What a great project! It's important to get the views of consumers who are using the system--and paying for it, one way or another. Those two questions--what kind of health care system and how much are people willing to pay--are basic. And also: Who decides?

Dr. Linda Peeno: I would love to see the results of this. This is exactly the kind of project we need on a national level. We have to have a way to begin to have a real dialogue, not driven by the slick marketing of health plans or political agendas of politicians, that help us get to the most basis questions. Can you send me the results of your project?

Fairfax, VA: Our health insurance annual premium has been
going up at a compound rate of 20% a year --
from $3,600 in '96 to $13,200 in 2001.

We expect another increase of 15 to 20% this
year.

My wife and I are 53; she has Arthritis; I have hay
fever.

These are MASSIVE increases. We're becoming
very concerned that health insurance costs will
overwhelm us before we can qualify for Medicare
at age 65.

Part of the problem is we're self-employed. Along
with small businesses and other small groups, we
don't have the leverage that larger corporations,
unions and government entities have to negotiate
better pricing.

Is there any strategy -- or legislation -- that
would let individuals and smaller groups get more
competitive rates?

Dr. Linda Peeno: I am not aware of anything currently, but this is typical of what I hear repeatedly and what will force us to rethink our whole system eventually.

Lexington, KY: It seems that many of your "solutions," such as health plan liability and mandated coverage, are huge cost drivers. Much of managed care's ability to control cost has been legislated away. Insurance was not designed to cover everything. Coverage for everyone is good, but if you can't afford that coverage, it is not so good anymore. The fact of the matter is, in this day and age, health care IS a business. Do you have any solutions or propositions that are cost effective?

Dr. Linda Peeno: I probably couldn't answer this in this format...but we have to have a way to control the business of medicine.

Alexandria VA: My friends in Canada have been treated through the Government's single payer system. It has its faults, but overall they're happy.

So why can't we have it here? The amount of
money the insurance companies pay for high exec salaries, fancy buildings not to mention their excessive lobbying can't be that much higher than the administrative costs of a government system, or is it?

Dr. Linda Peeno: In fact, the administrative costs in Canada are much less. We need to seriously examine many other health systems, including Canada.

Lexington, KY: You make it sound as if employers gleefully attempt to find the health plan with the fewest, i.e. cheapest, benefits, in a time when many employers are struggling to find a way to continue to provide health benefits. Racheting down benefits is the only way to keep insurance costs within a price that is affordable so their employees will continue to have health insurance, rather than cutting it altogether. What about the effects of prescription drugs, administrative mandates, etc?

Dr. Linda Peeno: All these things increase costs. The problem is how to provide what people need, fairly, equitably and ethically.

Washington, D.C>: Gaithersburg can go pound salt. My father just turned 85, served in WWII, worked in the government for peanuts, paid his taxes, raised 3 kids, and if he needs a procedure, expensive or not, he's going to get it! He's just as important to me as someone's child is to them.

Abigail Trafford: How does a country set priorities with a limited amount of resources? I would argue that the U.S.-- which spends so much on health care anyway--ought to be able to provide a needed procedure for your father AND provide comprehensive well-baby care to newborns and their mothers. We've got the money. We're already putting more than one trillion dollars into health care. Why isn't it working better?

Dr. Linda Peeno: We don't have a systematic, ethical and efficient way to ensure that the money is spent in the right places.

Lexington, KY: You have mentioned "accountability" several times. With the current medical malpractice insurance crisis in the U.S. that is causing many doctors to avoid certain specialities (OB) or areas (Washington state)-- why are you advocating health plan liability, i.e. accountability. Huge malpractice awards haven't done anything to limit the number of medical errors, why would health plan liability be any different?

Dr. Linda Peeno: I advocate ethical accoutability, as well as legal accountability. I do not support an increase in lawsuits or litigation as an answer, but I do know that some people and most organizations take legal accountability seriously, and that becomes the incentive to do the right thing in the first place.

Fairfax, VA: You want universal health care based on the model in Great Britain? Run by the government? Why do you feel government can do a better job than private industry?

Dr. Linda Peeno: I support universal coverage, and believe that however we get there it will always be a combination of private and governmental activity. It's just how we do it that we haven't figured out.

Abigail Trafford:

That wraps up today's show. Thanks to everyone who joined the discussion.

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Abigail Trafford: Alas, our time is up. Sorry not to get to all the questions. Dr. Peeno--thank you very much. This was a great discussion. Join me again tomorrow when we talk with Susan Pisano, director of communications for the American Association of Health Plans. Thanks everybody!

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