Annette Derr, left, blows bubbles during a therapy session for her 2-year-old son, Joshua. Physical therapist Sharon Galitzer helps the child keep his balance. (By Andrew Itkoff for The Washington Post)

By Amy Goldstein
Washington Post Staff Writer
Wednesday, June 24 1998; Page A01

What kind of rights should Americans be guaranteed in a health care system where managed-care plans have gained broad powers to decide how much and what kind of treatment patients receive? That question is becoming a major public concern and a volatile issue in Congress.

One story below examines what has happened in Miami since Florida began to regulate the managed-care industry in ways being considered by Congress. The other story shows the sense of powerlessness some patients feel in fighting the decisions of their health plans -- and why some lawmakers want to intervene.

In dermatologist Richard Feinstein's office, exasperated patients used to spend hours on his secretary's phone, begging their health insurers for permission to have their warts and rashes treated by a specialist. Now, Feinstein has hung a sign prominently between the magazine rack and his mother-in-law's oil paintings on the waiting room wall.

"If you belong to an HMO," the sign reads, "by law you no longer need to obtain a referral slip . . . to be seen here."

Since Florida changed the law last year, the flow of patients into Feinstein's office has increased from about 120 a week to nearly 200. "I'm seeing more patients now than I've ever seen" in 24 years in practice, he said.

Promising patients "direct access" to their dermatologists is one of many ways that the Florida lawmakers have stepped in lately to readjust the balance of power between patients and the managed-care plans that have become a fixture of American health care.

State law here now makes it easier for patients to go to emergency rooms without worrying about whether their insurer will pay the bill. HMOs no longer may forbid doctors to tell patients about expensive treatments. And patients have a right to protest to an outside board if they think their health plans improperly refused to pay for their care.

These new rules make Florida among the most assertive states in the country in responding to a deep well of resentment against managed care that has infiltrated Washington. Prodded by patients, doctors, hospitals and the White House, Congress is immersed in an intense discussion over whether to create a set of federal "patients' rights" through many of the methods Florida already has begun to employ. Lawmakers already are considering several bills that would regulate health plans to varying degrees, and the House Republican leadership is preparing to announce today its own version, which could become the main vehicle for the congressional debate.

Miami offers a particularly compelling glimpse into what difference this new generation of federal health care reform might make, because the percentage of people here who belong to HMOs and other kinds of managed-care plans is the highest in Florida and greater than in all but a handful of U.S. cities.

Here in South Florida, this new wave of government tinkering in health care is yielding tangible benefits for the segments of the medical industry that have been the most powerful voices during the state's legislative debates. What is far from clear is the bottom-line question: When government tries to reform managed care, are patients better off?

Like the dermatologists, who proved forceful lobbyists for their "direct access" law, hospitals and emergency rooms fought vigorously for a 1996 measure that now requires health plans to pay for all emergency room visits until a doctor can determine whether a true emergency exists. As a result, Miami's hospitals are finding that they're generating more income from busier emergency rooms, and HMOs are finding their costs for that service going up. But people aren't necessarily healthier: it is unclear, for example, whether more patients are rushing in with heart attacks or more people simply are driving up health care costs needlessly by using emergency rooms for minor ailments.

Florida's experience also suggests that government action alone does not always bring about the changes that those dissatisfied with the nation's health care system seek.

Florida has allowed disgruntled HMO patients to file complaints with an impartial state board for more than a decade, making it one of the earliest states to adopt a key component of legislation Congress is mulling. Yet in a state with 4.4 million HMO patients, Florida's grievance board heard only 52 cases statewide in the past four years.

"Miami is the Omaha Beach of managed care," said Douglas M. Cook, director of the Florida Agency for Health Care Administration, which regulates HMOs and other health plans. "It was a kind of incredibly difficult landing. [But] it has really taken hold." Today, two-thirds of the area's residents with private insurance belong to HMOs, compared with fewer than half nationwide.

But attitudes toward these new health care arrangements soon began to sour. There were a series of health scandals in the late 1980s, including a celebrated case in which the president of the state's largest HMO was indicted and fled the country. But the deeper root of the discontent was the medical culture clash produced by the very premise of managed care, which seeks to make health care more economical and efficient by placing limits on how much and what kind of care patients receive.

Fully one-third of local families say it has become harder to get care in an era of managed care, according to a recent survey by the Washington-based Center for Studying Health System Change. And nearly one-third of primary-care doctors surveyed say they cannot always persuade health plans to allow their patients to get specialty care when they need it.

Annette Derr, a payroll clerk in nearby Pompano Beach, knows such frustration well. Her son, Joshua, was born 10 weeks early, weighing barely more than three pounds. At 8 months, her adorable baby, with his blond wavy hair and big hazel eyes, was "like a little blob lying there," unable to sit up or roll over. One day, she stopped a complete stranger in a grocery store, asked her how old her baby was, and nearly burst into tears when she learned the little girl, so much more advanced than her son, actually was much younger.

A pediatrician who specializes in developmental delays told Derr that Joshua needed special therapy, but her health plan, Aetna, refused to pay. Only after Derr's employer agreed to buy additional coverage, did Joshua, who will turn 2 on Friday, begin the twice-weekly therapy sessions that have taught him words and enough motor skills to grasp a penny between two fingers.

Such personal battles have given rise to several new counterforces meant to rein in managed care, in addition to the new laws. In Miami and Broward County to the north, patients advocates have banded together to mount legislative lobbying campaigns and operate hot lines for managed-care complaints.

The Dade County Public Schools, the largest employer in South Florida, last year hired a medical ombudsman to referee disputes between employees and health insurers. But so far the ombudsman has heard cases from just two of the school system's 33,000 employees -- one involving experimental treatment for allergies and the other an ear implant to improve a teacher's hearing.

"I think we all expected there would be more," said Scott Clark, director of the school system's benefits program, whose office is working to increase awareness of the program.

In a similar way, the Florida state government is working to increase use of its grievance system. A law passed this year will add more employees to research complaints and require the panel to make decisions faster. Cases have tended to linger for more than six months.

Even so, many people remain unaware of their appeal rights. "Anytime I mention what I did, people are always amazed," said Kathleen Pham, a Miami English teacher who used the grievance system to force her insurance plan to pay for a breast pump so she could feed her son, Kyle, who was born with a cleft lip and palate.

Cook, at the health care agency, said that even if relatively few patients have used some of the protections, the state's enlarged role has been a lever to modify health plans' behavior.

Several health plans here say they have improved their method of handling patients' complaints in-house, in some cases inviting community leaders to be part of a board that decides whether appeals are valid. Similarly, as lawmakers were debating whether women should be able to select an obstetrician-gynecologist as their primary doctor, Humana Group Health Plan decided to allow Florida patients that choice two years before a state law took effect.

And, in this highly competitive climate, some plans are trying to portray themselves as more lenient in determining how much care patients can get. An advertisement by HIP Health Plan of Florida depicts an HMO administrator on the telephone with a thick stack of pencils on her desk. "Debbie is really nice. She's very organized and great with numbers," the ad says. "But should she be telling your doctor how to operate?"

Health plan officials say some of the legislation was pointless, putting into law practices that insurers had already been doing on their own. But other requirements have produced clear winners and losers. As a result of the emergency room law, 7,000 additional patients came to Baptist Hospital, one of Miami's largest. At AvMed, a large, nonprofit HMO with more than 80,000 members in South Florida, the cost of emergency room care rose from an annual average of about $47 per member before the law week effect to about $56 afterward.

The dermatology law has produced similar trade-offs. The law passed -- while similar bills that would have benefited ophthalmologists, gynecologists and other specialists have not -- largely because of the effective lobbying of the state's dermatologists, who have formed their own political action committee and argued that HMOs had put patients at risk of undetected skin cancer.

Feinstein, the dermatologist who works in the upscale neighborhood of Coconut Grove, said his practice and his patients have both benefited from the easier access.

One patient, Coleman Travelstead, made an appointment two years ago when he noticed a suspicious mole on his shoulder. He had been seeing Feinstein for years, but discovered that a change in his insurance now required him to get permission first from his primary-care doctor. He left, got permission by telephone, and went back to Feinstein, only to learn that he had to see his primary-care doctor in person. So he did, and was referred back to Feinstein, who -- on Travelstead's third visit in two weeks -- determined that the mole was not cancerous.

"It really hacked me off," recalled Travelstead, 56. Now, under the new law, "I just go in and see him," he said. "It's great."

Such freedom comes at a price. Humana's dermatology costs for South Florida have risen 39 percent in the last year, to an extra $366,000. Edward C. Peddie, AvMed's president and chief executive officer, said such governmental intervention is undermining the very premise of managed care -- the ability to hold the reins on costs while making medical care more rational and effective. "You're destroying the system ant bit by ant bite," Peddie said.

But some patients believe that the HMO system has too much incentive to withhold care. "If something is medically necessary, it should be paid for," said Francine Fafard, who waged a five-month fight with her health plan after her 12-year-old son, Ryan, fell and broke his tooth. Only after countless letters, and threatening phone calls from a lawyer, did Prudential HealthCare agree to pay for the surgery to pull Ryan's front tooth far enough beyond the gum line so that it could be capped.

"I know it is big brother watching," Fafard said of the new laws. "But we need somebody to watch."