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Insurer's new plan gets the evil eye from
an ophthalmologist
From the Business section Of The Philadelphia Inquirer
Monday, July 1, 1996
Dion Ehrlich has warned 600 patients about
Keystone. The firm, in a rare display, is fighting back.
By Marian Uhlman INQUIRER STAFF WRITER
Doctors often complain about managed care,
but few have gone to the lengths of Dion R. Ehrlich. Normally a mild and
unassuming ophthalmologist, he recently mailed a bold and unusual warning
to 600 of his patients: A business deal being proposed to ophthalmologists
by your managed-care plan may be hazardous to your sight.
He said he could not, in good conscience,
accept the offer and urged his patients to switch to another plan. "I
know I can't save everybody,'' said Ehrlich, a solo practitioner for
nearly
20 years who has offices in Abington and Philadelphia. "But I can save
my patients.''
The insurer, Keystone Health Plan East,
of Philadelphia, fired back immediately, sending him a hand-delivered
letter from its lawyer with several demands. They included a request that
Ehrlich issue a retraction to everyone who knew about the letter. The Keystone lawyer said Ehrlich had disparaged
the firm and had interfered in its business relationship with subscribers. Furthermore, she wrote, his conduct had harmed the insurer's reputation.
John Daddis, a Keystone senior vice president,
wrote in a May 31 letter to Ehrlich's patients: "While Dr. Ehrlich is
entitled to have his own opinions, we believe his letter is inaccurate
and grossly distorts one of Keystone's most successful programs.''
At issue is a new Keystone program to pay
an eye doctor a set fee for each patient he treats during a 90-day period,
regardless of how many procedures he does or how much time he spends with
a patient. Doctors traditionally have been paid for each service they
perform. Keystone has not finalized all the details
of the program, but doctors who do not participate probably will treat
many fewer patients for the company, one of the largest managed-care plans
in the Philadelphia area.
"Keystone's objective is your objective,''
Daddis wrote patients. "To obtain high-quality care from highly qualified
physicians at a reasonable price. '' Ehrlich says the program will
fail
patients. The arrangement rewards a physician with more money if he rations
access to medical care, he said.
He said the doctor's interests would become
aligned with the insurer, a situation that would be at odds with his core
belief that the patient comes first.
"You trust me to use my skills and judgment
for your best interest -- not mine -- and certainly not for the insurance
company,'' Ehrlich wrote his patients in a second letter. In disclosing
Keystone's proposed financial arrangement, Ehrlich ventured where few
doctors have been willing to go. He said he had gotten calls from
many
colleagues who applauded his bravado but told him they could not be so
candid.
They fear angering the managed-care companies,
which play a big role in providing many doctors' income, Ehrlich said.
If a company decides for any reason to exclude a physician from its
plan, a large chunk of his practice may be at risk. "It is unusual
that he
had the nerve to go public,'' said David Himmelstein, a Harvard University
professor who has been critical of financial incentives in managed-care
plans. "Few physicians are in the position to do something that the
HMOs might get back at them for. ''
Proposed laws have popped up in Washington,
Harrisburg and elsewhere in the past year aimed at protecting doctors
from retaliation if they discuss financial information about health plans
with patients. New Jersey is considering requiring HMOs to provide
general information to consumers about the firm's financial arrangements
with doctors.
Carol O'Brien, a lawyer for the American
Medical Association, said it was hard to gauge how far doctors could
go in informing their patients. "It is not a bright-line situation,''
she
said. Doctors' ethics -- and sometimes the law -- bind them to their
patients' welfare. But they also must be careful not to undermine
a managed-care
plan's right to do business, she said.
"The idea is not to make a physician a
mini-benefits manager, but for him to provide meaningful context,'' she
said. On the wall of an examination room at his Jeanes Hospital office,
Ehrlich has his framed Eagle Scout award from 1964. "Why do I do the
things I do?'' he asked, pointing at the award. "That's why. ''
Not that Ehrlich is quixotic. He has a penchant
for fishing in the surf rather than supporting a cause. Most days, the
doctor says he logs 11 hours with patients before heading home. After
his paperwork and his family, he has little time for anything else. Ehrlich
said he had worked well with a number of managed-care plans and had nothing
to gain financially by standing up to Keystone.
But the new program "was something I felt
passionately about,'' said Ehrlich, 48, who has been division chief of
ophthalmology at Jeanes Hospital for 16 years. "It may be something
different
for me to do. But it wasn't as different as what the insurance company
was asking me to do. They were asking me to betray the bond of trust
between
the patient and myself.''
Nearly all of the 100 patients who contacted
Ehrlich after receiving his initial letter told him they supported his
position, he said. He said he did not know how many would leave Keystone.
Jack Roche, a retired health-care executive from Northeast Philadelphia,
has decided to leave after Ehrlich's letter. "We have basic trust in
the health-care provider to act in subscribers' best interest,'' said
Roche, a longtime Keystone subscriber. "It disturbs me when policies
are implemented without informing consumers ahead of time. ''Gary
Owens,
Keystone's medical director, said it was too early to announce the program
to patients because it wouldn't be launched before October. When the
insurer
makes that announcement, it will detail how the new program works. He
said the company usually did not describe its payment system to patients.
"I don't think how we pay physicians is generally germane to subscribers,''
Owens said. "That has not been the tradition of any insurer. . . . We
have nothing to hide.'' Keystone officials say the program will be
"customer-
and quality-driven. ''And they said they had received good reviews from
doctors and patients who are familiar with similar programs that the
company
offers other specialists. For instance, more than 90 percent of patients
receiving cardiology care were satisfied with their treatment, according
to the company.
Daddis, the Keystone executive, said Ehrlich "didn't
understand the program and acted impetuously.'' The doctor did not
contact
the company to talk about his reservations before mailing his letter,
Daddis said. Keystone has no problem if doctors discuss its health
plan
with patients, Daddis said, but the company expects an accurate interpretation.
Ehrlich's claim that the new program " `has the potential for
causing errors in judgment, needless suffering and blindness' is a
slap in the face of every physician,'' Daddis wrote patients. More
than 275
ophthalmologists,
the bulk of Keystone's physician network, have expressed interest in
the program, according to the insurer. Owens said the plan built
in safeguards
to make sure that doctors did not skimp on care. Doctors receive extra
money if they handle more complex cases than average; they receive
less
if their patients are healthier than average. They also are evaluated
by patients and other doctors through surveys. Ehrlich said he was
more
convinced than ever of the program's potential pitfalls -- even after
being "educated by them'' in a half-hour conversation. On advice
of his
lawyer, Ehrlich said he had complied with Keystone's demands, which included
providing the firm with a list of the people who were aware of his
letter. He also sent out what he called a retraction, but Keystone's
lawyer wrote
back in early June that the second letter was a "re-publication of the
defamatory statements.'' "I answer to a higher authority, not insurance
companies,'' Ehrlich said. Keystone has "lots of money. They can do
whatever they want to do. If they bring a lawsuit against me, I am
prepared to
defend myself.'' Daddis said the company was evaluating the situation.
Philadelphia Online -- The Philadelphia
Inquirer, Business -- Copyright Monday, July 1, 1996
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