Health Against Wealth: HMOs and the Breakdown of Medical Trust

Do HMOs deliver what they market? Wall Street Journal reporter Anders alerts the HMO subscriber to be on guard. Exposing faults with the intent of suggesting reforms, his book could become the energizing catalyst to bring them about, especially since corporations contracting HMOs for their employees have only recently begun to monitor the quality of care proffered by this largely self-regulated industry. For-profit HMOs spend on average 70%-75% of premiums on patient care, while nonprofit HMOs spend 90%. Anders publicizes the salaries of several for-profit CEOs: the chief executive of Foundation Health in 1994 had a $19 million pay package; Humana chair David Jones is one of the richest men in Kentucky. Not just statistics but also well-documented anecdotal evidence makes Anders's arguments alarming as he portrays life-threatening cost-cutting practices. Healthy patients have little cause for dissatisfaction with HMOs, stresses the author, but the elderly and those with medical emergencies or severe illnesses are generally treated on the cheap. Treating patients as production units flowing through a medical factory may be cost-effective, but Anders--he's insured by an HMO, his wife prefers traditional indemnity coverage--shows that quality controls have not been factored in. His book will have readers restudying their HMO plans, this time as informed subscribers. 40,000 first printing; first serial to the Wall Street Journal; author tour. (Nov.)