State Survey Finds 42% Had Problems in Managed Care

A new survey has found that 42% of Californians with medical insurance--nearly all of whom are in HMOs or other managed care plans--had a problem with their health plans in the last year, including hundreds of thousands who reported denials or delays in getting treatment.

In the most comprehensive look to date at Californians’ experience with managed care, the survey by researchers at UC Berkeley and the Field Research Corp. concluded that about 1.6 million people reported recent problems involving denial or delays in getting medical treatment, inappropriate care, or difficulty getting referrals to physician specialists.

Of the projected 6.72 million Californians reporting some type of problem with their health plan, 21%--representing 1.4 million people--said the problem led to the worsening of their medical condition.

The results are based on a survey of 1,200 people in the state with medical insurance. Only 3% of Californians with private coverage have traditional fee-for-service plans, so the results deal almost exclusively with managed care.

“There are a lot of anecdotal stories [about HMOs], but this study is able to quantify the prevalence of these problems,” said study author Helen Schauffler, associate professor at Berkeley’s School of Public Health.

The survey is likely to powerfully influence the debate in California and nationally about how to regulate the managed care industry, health experts said Wednesday.

“I think these numbers are going to shock a lot of people,” said Jeanne Finberg, a senior attorney with Consumers Union and member of a state task force named last summer by Gov. Pete Wilson to study the rapid growth of managed care in California.

It is the second recent survey to find significant public dissatisfaction with managed care. A national study by researchers at Harvard University and the Kaiser Family Foundation found that 51% of Americans believed that managed care has lowered the quality of medical care for the sick, compared to 32% who said it had improved the quality.

The UC Berkeley-Field study was commissioned last summer by the Wilson task force to prepare comprehensive recommendations on reform. But the survey was not made available to the 30-member committee until the last few days, after the panel’s work was near completion. Philip Romero, the task force’s executive director, said the study’s findings will be included in a separate chapter of the panel’s report to be released in January.

The panel is preparing recommendations on how to regulate HMOs, resolve consumer grievances and other issues.

One task force member complained Wednesday that the panel’s preliminary recommendations do not reflect the seriousness of the problems indicated by the study--a complaint voiced by some other consumer representatives. The panel members--two-thirds of whom are Wilson appointees--have held a series of statewide meetings and public hearings since spring.

“The task force members . . . are about to bring forth recommendations that are very weak, watered down and industry-friendly despite the fact that they now have these figures staring them in the face,” said Assemblyman Martin Gallegos (D-Baldwin Park), a task force member who has written some tough HMO reform bills as chairman of the Assembly Health Committee.

But Alain C. Enthoven, a Stanford University health economist who heads the state task force, said the study’s findings are likely to be exaggerated by critics of HMOs.

“All health insurance has features that cause frustration. . . . Now that managed care is the dominant paradigm, it gets all the heat and frustration about health insurance in general.”

Further, Enthoven--one of the architects of the managed competition concept that has helped fuel the growth of the HMO industry--said consumers often blame health insurers for problems not necessarily of their making. When consumers complain that important benefits were not offered, he said, they often do not realize that it is employers--not health plans--that decide which benefits to offer.

“And there are a lot of people getting inappropriate referrals or no referrals for reasons that have nothing to do with managed care, including doctors who refer patients to their buddies.”

Although the study’s findings may come too late to figure significantly in the task force’s deliberations, they offer fodder for critics and proponents of managed care when the state Legislature takes up HMO reform next year. In a controversial move last fall, Wilson vetoed several dozen HMO reform bills passed by the Legislature, saying that he preferred to wait until the task force issued comprehensive recommendations.

The managed care industry will find little to like in the study. On Wednesday, one industry official cited the survey’s findings that 76% of insured Californians said they are “satisfied” or “very satisfied” with their health plans, while just 10% were “dissatisfied” or “very dissatisfied.”

In addressing the seeming contradiction between high levels of general satisfaction and the large numbers of patients reporting problems, Enthoven compared it to an airline passenger who is bumped from business class and is not happy about it but is generally satisfied with that airline.

Still, similar surveys elsewhere have found even higher levels of overall satisfaction among HMO members than in the Berkeley-Field poll.

“We’ll analyze this survey and pull out any lessons to be learned,” said Myra Snyder, chief executive of the California Assn. of Health Plans, a trade group.

While Snyder noted that the vast majority of decisions involving denials of care or access to specialists are made by doctors and medical groups who contract with HMOs, she added: “I don’t think the health plans can exonerate themselves by saying it’s not us, it’s the medical group.”

The Berkeley-Field survey provides a far more comprehensive look at consumers’ experience with managed care in California than any prior study. It did not look exclusively at HMOs, but rather at persons covered by all forms of insurance, including PPOs, a less-restrictive form of managed care, and traditional fee-for-service plans.

The study did not look at Californians who are without health insurance.

A key finding of the survey is that consumers report significantly different satisfaction levels depending on which type of managed care plan they belong to. It found that patients enrolled in so-called group/staff model HMOs--Kaiser Foundation Health Plan accounts for nearly all such members--were the most satisfied or least dissatisfied of any type of insurance. Forty-four percent of Californians enrolled in group model HMOs were “very satisfied” with their plans.

Only 29% in so-called network or IPA model HMOs were “very satisfied.” Network/IPA HMOs include most HMOs other than Kaiser, including Foundation Health Systems, Maxicare and PacifiCare.