The Best Policy

Marcus Welby Wasn’t So Great

Our faulty memories about fee-for-service medicine.

Not long ago, I was listening to an NPR talk show on which the moderator and his guest bemoaned the passing of the well-beloved family doctor, whose kindly manner and personalized attention once graced the healing arts. The guest, George Anders, author of a new book, Health Against Wealth, described the ways in which health-maintenance organizations and other forms of penny-pinching managed care are causing the “breakdown of medical trust.”

Anders offered upsetting details: A child’s mysterious life-threatening disease misdiagnosed; terminal cancer patients denied last-ditch bone-marrow transplants; doctors who watch bottom lines instead of blood pressures; nurses who scan spreadsheets instead of bedsheets …

When suddenly, there leapt to mind the memory of a holiday party a generation ago in a fashionable neighborhood of the nation’s capital:

A kindly white-haired gentleman sidles up to an ample hostess. “Come on, Kitty,” he says in his soft Southern drawl, “A little toddy’s not going to hurt you.”

The woman in question was my mother-in-law, whose alcoholism was then in remission. The prescribing gentleman was her doctor, a practitioner much in vogue in old-time Washington society.

An atypical example of the sage practitioners of yore, you say. And indeed, my husband and I spurned the courtly generalist for an up-to-date internist, highly recommended by a more senior associate at the top Washington law firm my husband had joined. And our switch came not a moment too soon. My thyroid, the doctor advised, was dangerously low. Medication and frequent check-ups (covered by our insurance, as routine physicals were not) were advised.

This struck me as slightly odd. I didn’t fit the sluggish, overweight profile of the low-thyroid sufferer. But I paid the visits and took the pills and ignored the occasional heart palpitations that troubled my sleep. My doctor was most attentive–he even visited me at home when I came down with chicken pox–though more out of curiosity than solicitude, he admitted, adult chicken pox being so rare.

As time went on, I met more and more fellow patients of my internist. A striking number, usually women, turned out to share my low thyroid. For men, the favored diagnosis seemed to be gout. Gout? In a 20ish man who never frequented a club in Pall Mall, drank no brandy, squired no acres, rode to no hounds? Well, who were we to judge?

Of course, we, with our fine educations and scholarly honors, were a lot better equipped to judge than the average American consumer. And I will warrant that our doctor–keenly attuned to the income-enhancing potential of well-insured diagnoses as he was–was probably far better trained than the average practitioner in his cohort. He probably did us no lasting harm. When I finally fled to the excellent, still younger internist who remains my doctor, he took me off the thyroid pills immediately, and the palpitations vanished.

Which brings me to the “to be sure” paragraph, as they call it in our trade. Most individual practitioners were–and still are–impeccably honest, devoted to their patients and incredibly hardworking. And many of them, my doctor included, are chafing under the book-keeping requirements and restrictions on their professional discretion that are prominent features of the new medical regime. Adjustments in managed care need to be made–and under pressure from consumers and their representatives in Congress, they are already being made.

N evertheless–the”nevertheless” paragraph ineluctably follows the “to be sure” one–it would be a mistake to try to turn back the clock. Remember that only one generation before my remembered holiday party, most people didn’t have health insurance at all. If they got sick, they scrounged up the few dollars the doctor requested and received care that, while sympathetically tendered, probably wasn’t worth much more than they paid for it. If granny needed an operation, there went the tuition for junior’s college. Then employer-provided health insurance proliferated, and the government waded in with generous coverage for the elderly through Medicare and first-to-last-dollar coverage for the poor through Medicaid. More and more people demanded more and more care and, thanks to science and technology, that care was far more likely to be efficacious.

Congress having failed to include conforming amendments in the Medicare/Medicaid legislation to repeal the laws of supply and demand, medical prices soared. Nobody minded much as long as somebody else was paying the bill (true, the economists warned in their dreary way that costly benefits get shifted back to workers in the form of lower wages, but who listens to them?). As companies found themselves increasingly squeezed between the demands of workers and stockholders, however, they started pressuring their insurers, who passed that pressure on to hospitals, doctors, and other providers.

Only a few years ago–three to be exact–managed care was the prescription of liberal reformers for an over-stressed health care system. By standardizing practice, the reformers argued, wasteful care would be curtailed without sacrificing–perhaps even while improving–quality. Indeed, managed care was the primary engine relied upon by the Clintons’ health-reform plan to generate the savings that would finance universal coverage at no net cost. Now, as the movement toward managed care has accelerated to a full gallop–and health-care costs, once thought unreinable, have slowed to a walk–managed care has become the bugbear of liberal critics. “Don’t let the philosophy of Gingrich … push your parents into the gas ovens of managed health care,” warned one especially overwrought Democratic challenger in the fall elections.

How dire is the threat? A 1995 review of various evaluations of managed care, in its several variants, found no large differences in the average quality of such care as compared with that provided to patients in typical fee-for-service indemnity plans. Patients in HMOs, for example, tended to get somewhat better preventative care (including early cancer detection) and somewhat less satisfactory care for complicated illnesses where methods of treatment are not well defined. HMO clients were especially satisfied with the lower premiums they typically paid.

No doubt an energetic investigator can dig up horrible cases (though most of Anders’ don’t pass the outrage threshold since, in the end, the patients got the care they sought). But what about all the horrible cases that flourished under the old system? Anders devotes a whole chapter to examples of “shoddy care” in states, primarily Tennessee, that have steered their Medicaid clients into HMOs. But if Anders had wanted to find a carload of cases that move well beyond the shoddy into the truly horrific, he need only have consulted the regular Medicaid Fraud Reports put out by the National Association of Attorneys General. These I have perused with sick fascination for more than a decade. The mildest of the reported cases–most of them the products of our traditional system of loving care–involve the simple theft by doctors, dentists, nursing homes, chiropractors, and the like of thousands, often millions of dollars (or sometimes drugs) from federal and state governments. The more colorful cases involve the infliction of torments on helpless patients that would excite the envy of Pol Pot.

Back in the 1960s when Medicaid passed into law with scant attention, a few brave analysts dared to suggest that the poor might be better served at far lower cost if the money were spent on developing well-staffed, multidisciplinary health clinics in chronically underserved inner cities and rural areas–sort of like, well, HMOs. Good heavens, snorted the conventional wisdom: That would be to create two classes of care in this country, one for the well-off and one for the poor! And so we consigned many of the needy to care that would be flattered to be called second-class: to the “Medicaid Mills” or to poorly trained solo practitioners or to wait in long lines at hospital emergency rooms till the harried staff can find time to treat their kids’ runny noses.

Nor, to return to the start of our story, is it only the poor who were often ill-served by the kindly and not-so-kindly vagaries of our old-time health system. So, as the chorus of complaints about “managed care” swells to cathedral-filling volume, it’s worth remembering that much of what we like to remember never was.


Anders, G. (1996). Health against wealth: HMOs and the breakdown of medical trust. Boston: Houghton Mifflin Co.

Congressional Budget Office. (1995, February). The effects of managed care and managed competition. CBO Memorandum.

Miller, R.H., Luft, H.S. (1994, May 18). Managed care performance since 1980: A literature analysis. JAMA, 271, 19, 1512-1519.

Nelson, L., Gold, M., et. al. (1996, November 7). Access to care in Medicare managed care: Results from a 1996 survey of enrollees and disenrollees. Mathematica Policy Research.