Doctors, Hospitals & HMOs Take Their Turn

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IT MAY BE PREMATURE OF OUR EDITOR TO PREDICT that increasing numbers of
HMOs will choose to withdraw from state Medicaid programs during the next 24 months. (See pages 4-6.) But I do think he is on target with his observations that hospitals, physicians, and insurance companies will not let government healthcare regulators push them around.

A careful study of how HCFA and other government healthcare regulators dealt with the clinical laboratory industry reveals a pattern. On the reimbursement side, clinical laboratories have endured ten years of consistent cutbacks to laboratory reimbursement. This was accomplished in a variety of ways, but the end result was always the same: laboratories got less money.

On the regulatory side, laboratories saw compliance guidelines and coding/reimbursement requirements become increasingly complicated and burdensome. The net effect of this has been to constrain utilization, inhibit how laboratories market tests to clinicians, and complicate their relations with physicians over the issue of providing diagnosis codes.

For ten years, government healthcare regulators have attacked the clinical laboratory industry, both directly and indirectly. Government healthcare regulators got away with it because the industry failed to speak with a united voice in the earliest phases. Even today, laboratory ownership is too fragmented to develop an effective lobbying force.

That will not be true of doctors, hospitals, and insurance companies. Billions of dollars are at stake, and all three groups are well-organized. They can meet with legislators and influence healthcare-related bills. Using advertisements and commercials, they can present their message directly to the public.

Having HMOs decide to abandon their state Medicaid programs is a new phenomenon. The more I learn about the reasons why this is happening, the more I believe that government healthcare bureaucrats will want to make them the whipping boy. I will predict that, sometime in the next two years, we will see a media blitz that talks about how heartless HMOs are denying Medicaid beneficiaries from the quality healthcare to which they are entitled.

Of course, the press will not broadcast the fact that government reimbursement for these Medicaid services is continually reduced, without reducing certain benefits as appropriate. Just as the clinical laboratory industry had their day in the target sights of healthcare bureaucrats and prosecutors, soon it will be the turn of doctors, hospitals, and insurance plans. But the outcome may be very different than that experienced by clinical laboratories.

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