Just say no to HMOs: When doctors reject bad contracts

Dropping HMO contracts may seem like a risky move, but more and more doctors are deciding it's a move worth making.

By Cheryl Jackson, AMNews staff. Oct. 15, 2001.

Managed Care: What's Next?"
With the managed care system drawing complaints from all quarters, doctors, patients, payers and even insurers themselves found themselves looking for alternatives to a concept that hadn't met its promise of improving care while reducing costs. This 2000-02 occasional series highlighted what physicians and others were doing to come up with a way to improve the system -- or replace it with something else.

Mountain View, Calif., neurologist Ron Hess, MD, was 53 in 1999. He was spending a limited amount of time with patients, and his workload was grueling, he said. So he planned to retire as soon as his youngest child -- then a sixth-grader -- was out of high school.

Then he got word that his local medical association was calling for doctors to get out of bad HMO contracts.

"I decided that was really worth trying. It didn't seem like things could get much worse," Dr. Hess said.

He looked through all of his insurance contracts and identified the worst plan to do business with.

"I said, 'Who's giving us the most trouble? Who's not paying? Who's paying at the lowest rates?' "

He gave that plan an option of renegotiating. The plan wasn't interested. He sent notification he was dropping the contract.

The office didn't suffer, so he moved on to the second worst contract. And that's when he and his staff noticed a difference.

"The staff wasn't working as hard. It was a little quieter. But there was no decrease in the number of patients," Dr. Hess admits.

They waited another few months and pared more HMO plans, even the more favorable ones, from their practice.

"We realized that the patients who could afford least to buy good health insurance were paying cash and coming out of plan. When we realized that was occurring, it became clear there was no point in taking any of the good insurance."

And with that, Dr. Hess turned a corner in his practice, finding himself on a street with fellow physicians who were happier going about their jobs after kicking HMOs to the curb. [...]