Proceedings of the 4th National Conference on Primary Health Care Access: April 2, 1993 – First Plenary Panel – Reweaving the Safety Net, Part 2 (A. J. Henley)

The archiving and publishing of the introductory remarks and the proceedings of the first plenary session of the Fourth National Conference  on Primary Health Care Access (April 2-4, 1993) was made possible, in part, through the generous support of the Michigan State University/Sparrow Hospital Family Medicine Residency Program, Lansing.

John E. Midtling, MD, MS (Moderator): A. J. Henley, our next speaker, comes from Philadelphia where he is the CEO of Healthcare Management Alternatives, a large Medicaid HMO. He will talk about his experience there and where he sees the reform effort going.

A. J. Henley, Healthcare Management Alternatives, Philadelphia: Thank you, John. We have been running the program now for four years. What I  want to do today is to discuss the program we operate in Philadelphia, particularly what we were doing two years ago with the program.

I also wish to discuss with you some of our findings to date. One of the reasons I want to discuss some of the findings with you is that the General Accounting Office (GAO) just concluded a year and a half study of the program for Congressman Henry Waxman related to quality, and the Inspector General recently completed a study of the program related to profitability.

I will discuss them both with you because I think they have real implications for where the country is going as it relates to managed care for Medicaid. Waxman and the Commerce and Energy Committee recently reviewed all of the findings. They haven’t been released yet. They probably will within the next 30 days or so.

Services Provided by HealthPass

First,  an overview of the program and some of its features:

  • a mandated Medicaid program that covers South and West Philadelphia.
  • about 125,000 or more persons in the Medicaid Managed Care program, 82,000 of whom are in our plan. (There are competing HMOs also in the program).
  • ongoing utilization review at every hospital, with a nurse who monitors the care received by our members assigned to each hospital.
  • an active provider relations department.
  • health education provided for members.
  • our claims processing done by our plan.
  • a member services program that has 24-hour hotline services.
  • community outreach.
  • quality assurance (QA) programs in which we call on all of our providers’ offices to review medical records.
  • established quality criteria against which physicians are measured related to hypertension and other health status markers.
  • many in-house medical committees manned by physicians to established the criteria to be used in for these evaluations.
  • 24-hour hotlines.
  • concurrent review of all hospitals days.
  • maternal/ infant care programs.
  • mental health programs.
  • 320 primary care physicians in the program, 1725 specialists, 27 hospitals, 360 pharmacies, and about 500 other specialty providers.

I think all of these things are things you will hear later when managed care is discussed further.

A street in North Philadelphia near Temple University
A street in North Philadelphia near Temple University

These are some of the QA programs and features I was telling you about that are in the program that are ongoing at all times. The Joint Commission reviews the program quarterly to ensure that we meet their quality standards. It is a very heavily monitored program.

The program also has a number of features designed to affect our members in the community. We try as a company to spend dollars with other agencies that provide services to our members so that we can improve things in the community. Last year I think we spent about $1,500,000 on these kinds of activities.

These are some of the kinds of things we do – conferences, health fairs, camps for kids with asthma. We fund Head Start classrooms, health scholarship programs, and a poison control center. We fund school-based health centers.

We fund lay home visiting programs that visit high risk mothers during their pregnancy, family planning programs, special programs targeted for Southeast Asians, and things of that nature. We also established a community foundation that we put $500,000 year into that is controlled by a board of directors independent from our organization that provides a number of other activities.

We fund shelter beds for homeless members, asthma programs, home heating fuel programs – all kinds of things of that nature. Immunization outreach programs. We pay malpractice insurance for community health centers that provide obstetrical care and we are very, very involved in the Health Start program.

The Profitability of Medicaid Managed Care Plans

First, the program makes an awful lot of money. Make no mistake about that fact. Anyone that tells you that managed care programs are not making a lot of money are probably people who are operating managed health care programs who don’t want more competition.

The Profitability of Medicaid Managed Care Plans

First, the program makes an awful lot of money. Make no mistake about that fact. Anyone that tells you that managed care programs are not making a lot of money are probably people who are operating managed health care programs who don’t want more competition.

When the Maxicare program in Los Angeles declared bankruptcy, there were immediate efforts to address its problems, because it certainly was in the interest of the State of California that their large Medicaid population be under managed care.

A street in inner city Philadelphia
A street in inner city Philadelphia

But HealthPass’ profitabiity has not yet approached what it could ge. This is not just for our program. Another Philadelphia Medicaid HMO  is run by the Sisters of Mercy. A recent review by the Inspector General found that they not only made $40 million in the last two years providing services to 60,000 Medicaid recipient, but that they saved the state more than that. So the programs are extremely profitable.

Understand, and some of you know something about “days per thousand,” in the Commonwealth of Pennsylvania the state Medicaid program is operating at 2460 days per thousand. Any manager of an HMO in the world with hospital days over 500 days per thousand would get fired. For anybody to tell you that there is not a lot of money there to be made or saved, they are kidding you.

In  our HMO we have 350 providers.  Some providers handle only 15 to 20 recipients and one has 1600.  Were we to eliminate f those who have 10 or 15 members and only have those with high enrollments, that we could control costs a lot more, because our business would be important to them.

As far as profitability is concerned, I assure you, that the profits are real. As a friend of mine in New York recently said, “There is no managed care program in the State of New York that is not making money.” I don’t know of one anywhere that is not making money.

The question, though, that we are raising is, “What really is the long-term impact that managed care programs are having on health care?” Those, I think, are the issues that need to be addressed. I am not sure that they are the issues that are on the table.

If the fundamental issue on the table is one of “will the government realize significant cost savings?” then there should be no debate on this issue. What we have found and the GAO in looking at our program has also found is that such savings are real.

Problems Medicaid Managed Care Organizations Encounter

Not everything yet operates to our satisfaction. Despite improved results for Medicaid’s Early Periodic Screening, Diagnosis and Treatment (EPSDT)  examinations, we still have to deal with matters as basic as whether a child takes a consent form home for mom to sign and to bring it back when the doctor or the nurse is there to do the examination.

There are some issues that no matter how much money you spend or what you try to do are are still going to be there to confront you. We have 81,000 members of whom 8000 are Southeast Asians. We have found that in our community that Southeast Asian women who need obstetrical and gynecological care do not like going to male physicians. Their preference is to go to someone of their own culture. (I do not know what they do in the rest of the world.)

If you are in Philadelphia and you need a Southeast Asian physician, then you have to get across town to North Philadelphia and try to see one of the Southeast Asian physicians there. We found that for those 8000 individuals this creates a major, major problem for us as it relates to prevention. The whole issue of access becomes challenging.

Overwhelming Need for Primary Care Physicians in our Community

We are willing to support the establishment of physician practices in areas in which we need them. But I kid you not! Within the last 30 days, the family medicine residency program at Jefferson Medical School – whose program we are attempting to get them to expand – asked us to help them find a doctor because everyone who comes to Philadelphia to Jefferson is going back to wherever they came from and are certainly not there to stay in Philadelphia to practice. So they do not have the wherewithal to meet the needs of the physician community of South and West Philadelphia.

Those needs are being met primarily in Philadelphia by the osteopathic medical school and the family medicine physician graduates of their programs who are willing to come into the community with some assistance to establish practices.

The whole issue of access, particularly now as it relates to pediatrics and OB / GYN, is unbelievable. We have areas where there are as many as 35,000 people and no physician – no physician! – within three blocks of Presbyterian Hospital and within ten blocks of the University of Pennsylvania and Children’s Hospitals. Those are hospitals where the people won’t go unless they are experiencing a real emergency.

Those are problems that managed care can’t cure. We have recently found a physician who is “out of his mind” who really wants to go into this area and practice medicine. We have refused to allow him to, at least to allow him to go as a solo practitioner. He says that he is not afraid, but fear has never been a prerequisite for dying. We are not going to send him there alone.

Combatting he Absence of Hope

The major concern we have in Philadelphia at the moment is that we believe that low socio-economic status and diminished economic opportunity are associated with increased incidence of health problems and destructive behavior; that the breakdown of family and community structure, the increase in violence against others, the devaluing of human life, the increase in teen pregnancy, AIDS, infant mortality – all reflect the absence of hope.

If there is no economic opportunity, no way to change poverty, no way out or up, there is no reason to be healthy or to seek health care. Even life itself has little value. We see this each and every day.

I am not saying anything to you that I did not say to the new Secretary of Health within the last two weeks in Philadelphia. I have to say I was disturbed by her answer. Her answer was, “We recognize that we need better schools. We recognize that people need economic opportunity and that we need better housing. We know that if we are to make any long-term impact on people, these things are necessary. But first we must make the changes we are making so that we will have the money to pay for the other things.”

Well, I have to tell you that that is a weird answer because there ain’t that much money you’re going to save! Not to do that! We will be lucky to save enough money to cover the under- or uninsured. We are certainly not going to save enough money in health care to revamp all of the other things that need to change before people begin to live healthier lifestyles.

What managed care has caused us to see in Philadelphia, as I am sure most of you are seeing, is what is happening to people. Managed care is like having people in a fish bowl. You know every prescription they get filled, no matter where they go and every doctor they see no matter whether it is a specialist or primary care physician. You really know!

It is clear to us that the primary causes of illness and death in our program are problems that are influenced by lifestyle decisions. No question about it!

Diet, exercise, alcohol, tobacco, drugs – things of this nature – are the things that are influencing the health care of our members. These things strongly impact health care costs, but which health care is simply not designed to address.

If we are, in fact, going to really, really make a difference, then I think we are going to have to start looking at the health care system as something that is going to assist us in doing that and not as the solution for anything, which it isn’t.

We believe that the health care system has real value in terms of economic opportunity, through the creation of jobs. We believe that the issues of lead poisoning and housing provide enormous opportunities for work – such as deleading and renovating houses. There are 73,000 abandoned homes in Philadelphia – 73,000 that no one is doing anything about.

We talk about health care and yet at Children’s Hospital in Philadelphia, 75% of the children seen in the emergency room live in the inner city and 75% of those children have lead levels over 10 microns. We know in Philadelphia that we have 16,000 children with lead levels in excess of 25 microns and yet we say we don’t have work for people. Of course we do!

Some of the same things that were of concern to Hillary Clinton when she was at the Children’s Defense Fund – issues such as lead poisioning – need to be issues now. We cannot afford to revamp the health care system and do something about Head Start and immunizations and feel that that alone is going to make any meaningful change in the lives of either the poor or the unemployed or uninsured.

Thank you!

Dr Midtling: Thanks a lot, A.J., for a presentation both hopeful and sobering!

This presentation is followed by: Proceedings of the 4th National Conference on Primary Health Care Access: April 2, 1993 – First Plenary Panel – Reweaving the Safety Net, Part 3 (Ramsey).