Page 62 - Just Deserts

TotalCare

But previously unexplored procedural pathways and unrecognized
loopholes could always be found; indeed, once the entire available
patient population had been signed up with one or another HMO,
they constituted the primary source of new revenue in a tightly-closed
competitive arena. Doctors, lawyers and accountants were not purely
independent professionals; in practice they functioned as a symbiotic
unity, nourishing each other while battening on the clients they
served.
Rose continued, leaning forward in her chair.
“Now I have crunched enough numbers to see various
mechanisms at work in this organization. Please correct me if I am
wrong; perhaps I am reading something into the data that isn’t really
there. But certain givens are unavoidable. The largest is that an HMO
cannot react to marketplace factors in the same way, say, an oil
company or appliance manufacturer can, by using fluctuations in the
cost of raw materials as an excuse to jack up prices to the consumer.
We charge a certain premium to employers and employees to
subscribe to our service, and any increases in that tariff are closely
watched and criticized. If our capital expenditures suddenly take a
bump because we buy a CAT scanner or a few more dialysis
machines, there’s no way we can offset them in the short run by
passing the burden on to those who will get the benefit from
TotalCare upgrading its technology.”
The Chief tapped a ballpoint pen against an antique brass ship’s
surgeon’s syringe for syphilitic sailors, one of several archaic medical
devices adorning his office.
“Well, Ms. Collins, that is unarguable. We must conform to the
existing tax code while hewing to the line on premiums. I do belong
to the $100,000 Club supporting the president’s efforts to reduce
governmental interference in the practice of medicine, but results
have not been entirely satisfactory. And we certainly try to contain
costs by minimizing investment in the latest diagnostic fad.”
She nodded. “Yes, and I think the public appreciates that effort, in
least in the terms that they understand it: to eliminate the unnecessary
tests and procedures for which doctors in private practice have
become notorious. I suppose that is the main reason so many
companies have switched to HMO’s for health insurance. But in fact
61