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The establishment of the Health Maintenance Organization system of health care took off in 1973, at precisely the time that the shift toward the post-industrial society, financial speculation, and depopulation occurred internationally. Operating under the seemingly benign idea of providing preventive care cheaply, the HMO system actually promoted the following Nazi maxims:
1. Implement cost containment in a period of ``scarce resources.''
2. Establish free-market competition as the allegedly best way to contain costs. This mandated an increasing reduction of government regulation and standards, and an ever-expanding privatization of services.
3. Link provision of health care increasingly to ability to pay, thereby creating a category of persons with ``lives not worthy to be lived,'' because their care would be too costly. This is identical to Hitler's policy of defining categories of ``useless eaters.''
As you will see below, the gradual turnover of health policy to HMOs has resulted in the de facto implementation of that Nazi policy, which is deliberately denying care, and therefore increasing the death rate, among especially the poor, old, and non-white sections of the American population. The trillion-dollar health-care business was turned over to financial giants, who are prepared to kill as many people as possible, in order to preserve and increase their short-term profits.
On Dec. 29, 1973, President Richard Nixon signed into law the ``Health Maintenance Organization and Resources Development Act,'' which began the creation of HMOs, and the deregulation of the American health-care system. The law amended the standing Public Health Service Act ``to provide assistance and encouragement for the establishment and expansion of health maintenance organizations, health care resources, and the establishment of a Quality Health Care Commission, and for other purposes.''
The law was backed by an overwhelming bipartisan majority, many of whom expressed support for HMOs for all kinds of so-called humanitarian reasons--helping the needy, and reaching the poor with low-cost health insurance, etc. The chief sponsor was Sen. Ted Kennedy (D-Massachusetts), who said HMOs were first step for universal care.
In fact, it was just the opposite. The HMO law provided a ``foot in the door'' for the deliberate elimination of ``expensive'' facilities and care for large sections of the population. This was signalled by Senator Hubert Humphrey's endorsing statement, in which he noted that the bill ``provides a strong incentive for a long-overdue emphasis upon preventive services to avoid the need for costly, intensive care.'' In other words, if you're healthy, you might get care; if you're sick, you don't.
This first 1973 law granted $375 million for start-up demonstration HMOs. They were promoted as ``cost-containment.'' A series of subsequent legislation furthered the process of deregulation. In 1975, federal funding was continued for the demonstration initiatives. In 1976, new legislation liberalized the 1973 HMO Act. In October 1978, Congress made aid to HMOs continuing, not experimental, and made other significant concessions, including the permission for HMOs to refuse to pay for unusual or infrequently provided services.
The results of the emphasis on shifting care to HMOs, and away from providing facilities for health care, were dramatic. From 1980 to 2000, over 1,000 hospitals were shutdown in the United States. The table shows this, broken down for selected states.
The ball was rolling. By the end of the 1970s, there were about 250 HMOs, with some 9.1 million Americans enrolled as of 1980. Correspondingly, the numbers of Americans insured in the traditional basically fee-for-service health insurance (Blue Cross, Blue Shield and others) began declining after 1978, the peak year when 84% of Americans still had some form of the traditional non-HMO health coverage. The average citizen, or company employee insurance plan, was induced to switch to HMOs, because of the apparently lower initial premium cost.
In 1985, those enrolled in HMOs rose to 21 million; in 1995, the total reached over 50 million; and today the total is 81 million. If those enrolled in ``Preferred Provider Organizations,'' and similar managed-care programs are added in, the total enrollment as of today is between 85 and 100 million. At the same time, the number of Americans with no health insurance at all has been growing, to now number over 44 million.
Beginning in the 1970s, the biggest international financial interests and insurance cartels set up HMO operations, and have maneuvered ever since through mergers and acquisitions, and shutdowns, to get a lock on the ``industry.'' The major insurance companies--writing general insurance, including life, casualty, property, etc.--with subdivisions represented in the HMO lineup include: Prudential of America, Cigna Group, Aetna Life and Casualty, Metropolitan Life, and the Travelers Group. In 1975 U.S. Healthcare, Inc. was formed, first as a non-profit, then in 1983, as a publicly traded for-profit firm (later to merge with Aetna, and become the world's largest HMO). In 1976, Prudential Health Care Plans, Inc. formed. And so it went.
The HMO modus operandi is simple. It involves all manner of looting the medical care system--doctors, nurses, technicians, staff, facilities, and public health programs, and denying the patient standard medical treatment, in order to ``save costs'' and make profits for the shareholders. From selective enrollment, to limiting and denying care, to underpaying medics and hospitals, the HMO practices are simple and thieving. They are not ``a good system gone bad.'' They were intended from the start as a looting operation, whose actions would victimize vulnerable individuals and target groups. The fact that lawmakers authorized it, and the public condoned it, does not mean HMOs were not a deliberate operation.
The entire HMO system was based upon permitting HMOs to deny treatment to various kinds of people. From the beginning the managed-care companies ``cherry-picked'' those whom they would insure--often enrolling only healthy patients, or, after open enrollment, denying access to needed specialists, tests, or treatment for those chronically ill, mentally or physically disabled. In 1976, Congress actually permitted HMOs to deny enrollment to persons institutionalized with a chronic illness or permanent injury.
Look at one typical practice of pressuring medics to restrict giving care. HMOs generally pay a ``capitation'' fee to a doctor or care ``provider,'' which is a flat fee for every patient under his or her care; plus a ``bonus'' pool of money is set up. The HMO then sets strict limits on how much can be spent on the ``average'' patient. If more is spent on a patient than the limit, the excess amount is deducted from the bonus pool.
For example, Time magazine on Jan. 8, 1996 reprinted the limit clauses for one physician's contract with U.S. Healthcare, one of the largest HMOs. The contract stipulated that if the 925 people under the doctor's care collectively averaged fewer than 178 days in the hospital per year, the doctor would be paid a bonus of $2,063 per month. If there were more than 363 patient-days, the doctor would be given no bonus at all. In all, therefore, the doctor could have no more than 121 patients stay in the hospital for three days, and, preferably, less than half that many patients.
The rate of profiteering, especially in the first 15 years of the HMO operations, was staggering. Even as of the 1990 to 1995 period, revenues more than doubled each year for the top 12 HMOs. For example, U.S. Healthcare, Inc., had an average return-on-equity rate of 37.4% from 1987 to 1993. Its founder and CEO in 1994, Leonard Abramson, made $3.87 million personally from the HMO that year, and received a $1-billion bonus when U.S. Healthcare and Aetna merged in 1996.
Equally dramatically over the decades, many HMOs fell as fast as they rose, as their mode of looting was used up. Their bankruptcy left trails of unpaid hospitals and medics, millions of uninsured, and a toll in harm and death, but provided fabulous profits at the top along the way.
What has grown like a cancer under the HMO looting system, is the staff and effort required to monitor and cut health-care delivery, while the actual nurses, doctors, and technicians ratios-to-patients are falling! This is clear in the accompanying table.
At key points along the way, federal laws repeatedly deregulated more and more once-standard health-care practices, to favor new looting opportunities for the HMO financial/insurance powers.
1988--Congress allowed insurance companies to directly sponsor HMOs, without having to establish separate legal entities. In 1999, the two insurance giants joined as one HMO, when Aetna/U.S. Healthcare bought Prudential, and became the largest HMO in the world. For example, Aetna Health, a subdivision of the parent Aetna, became the de facto nationwide HMO of New Zealand in the mid-1990s. Aetna now states that it may mutate again in summer 2000, to create two separate enities for more profitability--an HMO, and a financials group.
1990--The Bush Fiscal Year 1991 budget included a plan to encourage the use of HMOs for Medicare and Medicaid, as a means of containing federal costs on the elderly and poor.
Subsequently, HMOs signed up millions of Medicare enrollees. In 1998 alone, 5.7 million receiving Medicare were enrolled in HMOs. From 1991 to 1996, enrollment in Medicaid managed-care plans rose 622%, thus growing from 2.7 million (9.5% of the total Medicaid population), to more than 20 million in December 1998 (more than 60%). Then, as of the end of the decade, when HMOs decided the profit rate was inadequate on the poor and the elderly, they moved to dump them. Aetna U.S. Healthcare, which covers 19.5 million people overall, now covers about 700,000 in Medicare plans for the elderly and disabled. Aetna plans to drop many of them as of January 2001. In 1999, Aetna dumped 62,000, and this year to date, has dropped 17,000.
As of 1999, managed-care plans overall have dumped over 650,000 Medicare patients in 19 states, leaving tens of thousands of elderly, chronically ill, and disabled and AID patients without coverage and unable to afford supplemental insurance to cover life-sustaining prescription drugs. Studies have also found Medicare HMOs illegally tripling charges for services allegedly offered as free by contract--or denying promised services altogether.
1996--Federal Welfare Reform Act, Aug. 5, targetted welfare recipients in ways that, over the ensuing years, led directly to increased mobidity and mortality, especially among children.
1997--Federal Balanced Budget Act, Aug. 7, set forth plans to cut federal spending on Medicare and Medicaid. Those taking major credit were then-Rep. Newt Gingrich (R-Georgia) and Vice President Al Gore. The impact of the Act hits patients directly, and undercuts hospitals trying to cover costs of providing treatment. The two programs together cover some 70 million people. For the 10-year period of fiscal year 1998 through FY 2007, there is to be a cumulative cut in the funding for Medicare of $385.5 billion and for Medicaid of $47.8 billion, or combined, $433.3 billion. Approximately 65% of that sum--nearly $300 billion--is money for payments for the elderly and poor, mostly to hospitals, and some to nursing homes.
The impact is devastating. Approximately 33% of all payments to the nation's 6,500 hospitals as of the mid-1990s came from Medicare, and 11% from Medicaid. For hundreds of hospitals, Medicare and Medicaid payments constitute 50-80% of revenues. Many have already shut down; thousands are on the edge.
Besides the impact of the HMOs, and Medicare and Medicaid cuts, the hospital base of the country has been hit hard by the predator for-profit hospital management chains. Like HMOs, they act to make a killing off looting the health resource base, built up over decades of the 1940s-60s Hill-Burton period, and from long community efforts at fundraising and patronage for their local hospital.
In 1994, the infamous Columbia/HCA was formed, now the biggest for-profit hospital chain in the world. Its operations epitomize the era of ``managed-care'' and HMOs. Formed from two predecessor hospital chains (Columbia, founded in Texas in 1987 by Bush family associate Richard Rainwater and others; and HCA of Tennessee, owned by the Frist family), the Columbia/HCA strategy is to buy up local hospitals in a target community, shut down some facilities, and force business to increase at the remaining Columbia/HCA medical centers. Rainwater calls it the ``WalMart approach to health care.'' The strategy includes aggressively cutting staff, forcing lower pay levels, and eliminating care for needy in the community. Columbia/HCA owns 225 hospitals in the United States. They are under investigation on charges of bilking the federal government for millions in fraudulent Medicare payments, and other charges.
By the late 1990s, the damage and harm of the HMO pattern of looting had become so dramatic, that local and state rearguard actions of all kinds were under way to beat back the predators. States initiated actions to curb the buy-out of non-profit community hospitals by for-profit chains. In 1996, some 16 states acted to prevent HMOs from muzzling doctors, determining what they could tell their patients about potential treatments. This HMO practice was widespread, aimed at keeping a patient in the dark about treatment, so the HMO could withold it.
Also as of 1996, some 33 states had taken various kinds of actions to control managed-care cost-cutting for specific diseases and procedures, for example, ``drive-through'' childbirth (referring to refusing women a hospital stay-over, or restricting it to one night).
In Congress, legislation was introduced likewise, to ban specific HMO practices by disease, or procedure. For example, U.S. Rep. Rosa DeLauro (D-Connecticut) sponsored a law to require HMOs to pay for a minimum of 48-hour hospital stay after removal of a breast. This came in response to CIGNA HealthCare and many otherss refusal to pay for an overnight stay for a mastectomy.
Typical of the results of the case-by-case approach was the April 13 settlement this year, of a suit filed by the state of Texas against Aetna and five other HMOs, including the giants Humana and Prudential (the latter now part of Aetna). The 1998 suit charged the companies with systematic, industry-wide illegal practices, such as fraudulent advertising, and concluding illegal contracts with doctors to limit patient treatments ``in order to maximize profits.'' The recent resolution of the suit, concluded by Gov. George W. Bush's current Attorney General John Cornyn, involves no fines nor restitutions, but merely an agreement by Aetna and the other five companies, to abide by state law for the next two years! The agreement explicitly states that nothing in the 51-page settlement document, can be ``construed to be an admission of any violation of any law ... or wrongdoing.''
In reality, the harm was extensive and measurable. The court documents prepared by a former Attorney General, Dan Morales, show how the companies put limits on the number of services allowed any one patient in a fixed period of time, regardless of his or her condition, and many other harmful--and standard--practices.
There are now dozens of class-action lawsuits pending against HMOs by parties threatened or harmed, and for wrongful death. Under pressure, a ``Patients' Bill of Rights'' bill has been debated in Congress. But the evil is not fixable on the surface.
What this brief history makes clear is that the HMO system of ``managed care'' itself was from the very beginning, in violation of the laws of the land, and the good of humanity. It must be ended. $ retrieve a0195nbs* A0:[195]A0195NBS.001;4 mostly Uneditted text The HMO system takes over: the Nazi model
The establishment of the Health Maintenance Organization system of health care took off in 1973, at precisely the time that the shift toward the post-industrial society, financial speculation, and depopulation occurred internationally. Operating under the seemingly benign idea of providing preventive care cheaply, the HMO system actually promoted the following Nazi maxims:
1. Implement cost containment in a period of "scarce resources."
2. Establish free market competition as the allegedly best way to contain costs. This mandated an increasing reduction of government regulation and standards, and ever-expanding privatization of services.
3. Link provision of health care increasingly to ability to pay, thereby creating a category of persons with "lives not worthy to be lived," because their care would be too costly. This is identical to Hitler's policy of defining categories of "useless eaters."
As you will see below, the gradual turnover of health policy to HMOs has resulted in the de facto implementation of that Nazi policy, which is deliberately denying care, and therefore increasing the death rate, among especially the poor, old, and non-white sections of the U.S. population. The trillion dollar health care business was turned over to financial giants, who are prepared to kill as many people as possible, in order to preserve and increase their short-term profits.
From 1980 to 2000, over 1000 hospitals were shutdown in the U.S. Table xx shows this, broken down for selected states. [pick up EIR, May 5, 2000, p. 6 Table 4. Or get one from REF].
First look at the 1970s turning point in the international context. The decade marks a strategic downturn in economic improvements and potential for development. It is the period of phase-out of stable currency, trade and national economic development relations. In August, 1971, the dollar was taken off the gold standard. Domestically, austerity measures were imposed. Investment into building and maintaining infrastucture fell, never again to reach the levels of the post-war period. Investment in R&D also fell, especially space flight--the science driver for the U.S. economy.
How could this be? The justification rhetoric was that the "post-industrial" period was at hand, and heavy industry, hard infrastructure and "Big Science" were outdated. Instead, you heard, "small is beautiful, and resources are "scarce." In particular, the pitch for "cutting costs" was made to appeal to the average family, whose job and income security was becoming shakier and shakier.
Behind the scenes, international political and financial circles opposing national-interest economic development--especially centered in London, were positioning for profiteering and looting. The pitch was made for government "cost control" through de-regulating and privatizing key economic sectors--health care, transportation, communications, utilities. All the while, the major money interests--the "fondi" of the oligarchy, were preparing new entities for huge gains in looting the U.S. asset base of hospitals, and profiteering off expenditures on medical care.
On Dec. 29, 1973, President Richard Nixon signed into law the "Health Maintenance Organization and Resources Development Act," which began the creation of HMOs, and de-regulation of the American health care system. The law amended the standing Public Health Service Act "to provide assistance and encouragement for the establishment and expansion of health maintenance organizations, health care resources, and the establishment of a Quality Health Care Commission, and for other purposes."
The law was backed by an overwhelming bi-partisan majority, many of whom expressed support for HMOs for all kinds of so-called humanitarian reasons--helping the needy, and reaching the poor with low-cost health insurance, etc. The chief sponsor was Sen. Ted Kennedy (D-Mass.), who said HMOs were first step for universal care.
This first 1973 law granted $375 million for start-up demonstration HMOs. They were promoted as "cost-containment." A series of subsequent legislation furthered the process of deregulation. In 1975, federal funding was continued for the demonstration initiatives. In 1976, new legislation liberalized the 1973 HMO Act. In October, 1978, Congress made aid to HMOs continuing, not experimental, and made other significant concessions, including the permission for HMOs to refuse to pay for unusual or infrequently provided services.
The ball was rolling. By the end of the 1970s, there were about 250 HMOs, with some 9.1 million Americans enrolled as of 1980. Correspondingly, the numbers of Americans insured in the traditional basically fee-for-service health insurance (Blue Cross, Blue Shield and others) began declining after 1978, the peak year when 84 percent of Americans still had some form of the traditional non-HMO health coverage. The average citizen, or company employee insurance plan, was induced to switch to HMOs, because of the apparently lower initial premium cost. [Run an entollment table, from May 5, 2000 EIR, or REF can make one]
In 1985, those enrolled in HMOs rose to 21 million; in 1995, the total reached over 50 millions; and today the total is 81 million. If those enrolled in "Preferred Provider Organizations," and similar managed care programs are added in, the total enrollment as of today is between 85 and 100 millions. At the same time, the number of Americans with no health insurance at all has been growing, to now number over 44 millions. [Run some logo's or a repro of a brochure? mgm will check]
Beginning in the 1970s, the biggest international financial interests and insurance cartels set up HMO operations, and have maneuvered ever since through mergers and acquisitions, and shut-downs. The major insurance companies--writing general insurance, including life, casualty, property, etc.--with subdivisions represented in the HMO line up include: Prudential of America, Cigna Group, Aetna Life and Casualty, Metropolitan Life, and the Travelers Group. In 1975 U.S. Healthcare Inc. was formed, first as a non-profit, then in 1983, as a publically traded for-profit firm (later to merge with Aetna, and become the world's largest HMO). In 1976, Prudential Health Care Plans Inc. formed. So it went.
The HMO modus operandi is simple. It involves all manner of looting the medical care system--doctors, nurses, technicians, staff, facilities, public health programs, and denying the patient standard medical treatment, in order to "save costs" and make profits for the shareholders. From selective enrollment, to limiting and denying care, to underpaying medics and hospitals, the HMO practices are simple and thieving. They are not, "a good system gone bad." They were intended from the start as a looting operation, whose actions would victimize vulnerable individuals and target groups. The fact that lawmakers authorized it, and the public condoned it, does not mean HMOs were not a deliberate operation.
Look at one typical practice of pressuring medics to restrict giving care. HMOs generally pay a "capitation" fee to a doctor or care "provider," which is flat fee for every patient under his or her care; plus a "bonus" pool of money is set up. The HMO then sets strict limits on how much can be spent on the "average" patient. If more is spent on a patient than the limit, the excess amount is deducted from the bonus pool.
For example, Time on Jan. 8, 1996, reprinted the limit clauses for one physician's contract with U.S. HealthCare Corp., one of the largest HMOs. The contract stipulated that if the 925 people under the doctor's care collectively averaged fewer than 178 days in the hospital per year, the doctor would be paid a bonus of $2,063 per month. If there were more than 363 patient-days, the doctor would be give no bonus at all. In all, therefore, the doctor could have no more than 121 patients stay in the hospital for three days, and, preferably, less than half that many patients.
The rate of profiteering, especially in the first 15 years, of the HMO operations, was staggering. Even as of the 1990 to 1995 period, revenues more than doubled each year for the top 12 HMOs. For example, U.S. Healthcare, Inc., had an average return-on-equity rate of 37.4% from 1987 to 1993. Its founder and CEO in 1994, Leonard Abramson, made $3.87 million personally from the HMO that year, and received a $1 billion bonus when U.S. Healthcare and Aetna merged in 1996.
Equally dramatically over the decades, many HMOs fell as fast as they rose, as their mode of looting was used up. Their bankruptcy left trails of unpaid hospitals and medics, millions of uninsured, and a toll in harm and death, but provided fabulous profits at the top along the way.
What has grown like a cancer under the HMO looting system, is the staff and effort required to monitor and cut health care delivery, while the actual nurses, doctors and technicians ratios-to-patients are falling! This is clear in Table xx. [From EIR May 5, 2000, p. 6, Fig. 2]
At key points along the way, federal laws repeatedly de-regulated more and more once-standard health care practices, to favor new looting opportunities for the HMO financial/insurance powers.
1988--Congress allowed insurance companies to directly sponsor HMOs, without having to establish separate legal entities. In 1999, the two insurance giants, joined as one HMO, when Aetna/U.S. Healthcare bought Prudential, and became the largest HMO in the world. For example, Aetna Health, a sub-division of the parent Aetna, became the de facto nationwide HMO of New Zealand in the mid-1990s. Aetna now states that it may mutate again in summer, 2000, to create two separate enities for more profitability--an HMO, and a financials group.
1990--The Bush, Fiscal Year 1991 budget includes a plan to encourage the use of HMOs for Medicare and Medicaid, as a means of containing federal costs on the elderly and poor.
Subsequently, HMOs signed up millions of Medicare enrollees. In 1998 alone, 7.8 million people receiving Medicaid were enrolled in HMOs, and 5.7 million receiving Medicare (primarily the elderly) were enrolled in HMOs. Then, as of the end of the decade, when HMOs decided the profit rate was inadequate on the elderly, they moved to dump them. Aetna U.S. Healthcare, which covers 19.5 million people overall, now covers about 700,00 in Medicare plans for the elderly and disabled. Aetna plans to drop many of them as of January 2001. In 1999 Aetna dumped 62,000, and this year to date, has dropped 17,000.
1996--Federal Welfare Reform Act, Aug. 5, targetted welfare recipients in ways that, over ensuing years, led directly to increased mobidity and mortality, especially among children.
1997--Federal Balanced Budget Act, Aug. 7, set forth plans to cut federal spending on Medicare and Medicaid. Those taking major credit were then Rep. Newt Gingrich (R-GA) and Vice President Al Gore. The impact of the Act hits patients directly, and undercuts hospitals trying to cover costs of providing treatment. The two programs together cover some 70 million people. For the 10 year period, beginning in fiscal year 1998, through 2007, there is to be a cumulative cut in the funding for Medicare of $385.5 billion and for Medicaid of $47.8 billion, or combined, $433.3 billion. Approximately 65% of that sum--nearly $300 billion--is money for payments for the elderly and poor, mostly to hospitals, and some to nursing homes.
The impact is devastating. Approximately 33% of all payments to the nation's 6,500 hospitals as of the mid-1990s came from Medicare, and 11% from Medicaid. For hundreds of hospitals, Medicare and Medicaid payments constitute 50 to 80% of revenues. Many have already shut down; thousands are on the edge.
Besides the impact of the HMOs, and Medicare and Medicaid cuts, the hospital base of the country has been hit hard by the predator for-profit hospital management chains. Like HMOs, they act to make a killing off looting the health resource base, built up over decades of the 1940s-60s Hill-Burton period, and from long community efforts at fund-raising and patronage for their local hospital.
In 1994, the infamous Columbia/HCA was formed, now the biggest for-profit hospital chain in the world. Its operations epitomize the era of "managed care" and HMOs. Formed from two predecessor hospital chains (Columbia, founded in Texas in 1987 by Bush family associate Richard Rainwater and others; and HCA of Tennessee, owned by the Frist family), the Columbia/HCA strategy is to buy up local hospitals in a target community, shut down some facilities, and force business to increase at the remaining Columbia/HCA medical centers. Rainwater calls it the "WalMart approach to health care." The strategy includes aggressively cutting staff, forcing lower pay levels, and eliminating care for needy in the community. Columbia/HCA owns 225 hospitals in the United States. They are under charges of bilking the federal government for millions in fraudulent Medicare payments, and other charges.
By the late 1990s, the damage and harm of the HMO pattern of looting had become so dramatic, that local and state rearguard actions of all kinds were under way to beat back the predators. States initiated actions to curb the buy-out of non-profit community hospitals by for-profit chains. In 1996, 16 states acted to prevent HMOs from muzzling what doctors could tell their patients about potential treatments. This HMO practice was widespread, aimed at keeping a patient in the dark about treatment, so the HMO could withold it.
Also as of 1996, 33 states had taken various kinds of actions to control managed-care cost cutting for specific diseases and procedures, for example, "drive-through" childbirth, referring to refusing women a hospital stay-over, or restricting it to one night.
In Congress, legislation was introduced likewise, to ban specific HMO practices by disease, or procedure. For example, U.S. Rep. Rosa DeLauro (D-Conn.) sponsored a law to require HMOs to pay for a minimum of 48 hour hospital stay of removal of a breast. This came in response to CIGNA HealthCare and many others refual to pay for an overnight stay for a mastectomy.
Typical of the results of the case-by-case approach was the April 13 settlement this year, of a suit filed by the state of Texas against Aetna and five other HMOs, including the giants Humana and Prudential (the latter now part of Aetna). The 1998 suit charged the companies with systematic, industry-wide illegal practices, such as fraudulent advertising, and concluding illegal contracts with doctors to limit patient treatments "in order to maximize profits." The recent resolution of the suit, concluded by Gov. George W. Bush's current Attorney General John Cornyn, involves no fines nor restitutions, but merely an agreement by Aetna and the other five companies, to abide by state law for the next two years! The agreement explicitly states that nothing in the 51 page settlement document, can be "construed to be an admission of any violation of any law...or wrongdoing."
In reality, the harm was extensive and measurable. The court documents prepared by a former Attorney General Dan Morales, show how the companies put limits on the number of services allowed any one patient in a fixed period of time, regardless of the condition, and many other harmful, and standard practices.
There are now dozens of class action lawsuits pending against HMOs by parties threatened or harmed, and for wrongful death. Under pressure, a "Patients Bill of Rights" bill has been debated in Congress. But the evil is not fixable on the surface.
What this brief history makes clear is that the HMO system of "managed care" itself was from the very beginning, in violation of the laws of the land, and the good of humanity. It must be ended.
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