In the old days -- 10 years ago? -- you didn't feel well, you went to your doc, he sent you a bill, you paid when you could. Or you went to the hospital, and Blue Cross paid most of the bill.
That wasn't everyone's way, but that was typical.
The world of medical insurance is changing almost every day. Suddenly there are HMOs, IPAs, PPOs, Choice, MD-IPA, CapitalCare and a mind-numbing array of other health care options. Now you can shop among those and other plans for the coverage that suits you best.
And that's good.
But there are so many different plans of so many different kinds that it's bewildering.
And that's bad -- unless you sit back and say: "What's really available? What is best for my family and me? What will be the best deal if I suddenly get expensively sick?"
This month nearly 4 million federal workers and retirees must make this choice for themselves and their dependents -- 10 million persons altogether -- during the annual "open season," when they can switch health insurance plans. Most of the rest of us make similar choices once a year if we're insured at work, or whenever our insurance comes up for renewal.
The first thing to understand is that, despite all the new names and initials, there are basically only three types of health coverage:
*"Service" policies, which pay for specified medical and hospital services or specified percentages of them -- so many days of hospitalization; lab tests and X-rays; 80 percent, say, of a doctor's treatment charges; so many visits a year to a psychiatrist or other approved counselor. This is the traditional Blue Cross-Blue Shield or Aetna or Prudential or other insurance coverage, and it is still the most commonly used.
*Cash indemnity plans, which pay you so many dollars a month during a hospital stay. They often are advertised in newspapers and magazines and by mail. They generally call themselves "supplementary" plans to give you some "cash" when you're sick. But the cash is generally from $40 to $75 a day, not much when a hospital stay may cost from $400 to $1,000 a day or more these days. Hospital stays are also getting fewer and shorter. There can be exceptions, but most insurance experts say you're better off putting as much money as possible into broader coverage.
*Prepaid health plans, which provide almost all your medical care -- including office visits, lab tests and hospitalizations -- for one fixed monthly or biweekly fee. These plans are the partly old, partly new creatures -- the "HMOs," etc. -- plucked from the alphabet.
And they're the new story.
They were born largely as a social protest in the depression-ridden 1930s, when some desperate consumers and independent-minded doctors -- both dissatisfied with organized medicine -- joined forces to start several "co-op" health plans as part of a growing cooperative movement.
The plans grew mainly in the Midwest and West, with consumer boards hiring doctors on salaries to give their members all the care they needed for a flat charge. There was also one important plan in the District, the Group Health Association, GHA, still here today and still important.
The American Medical Association fought them all. Local medical societies controlled hospital staffs and refused hospital privileges to these co-op doctors. In report after report, the AMA said that this "corporate medicine," with doctors on salaries, dictated to by non-doctors, would destroy the doctor-patient relationship.
Dr. Morris Fishbein, the AMA's main spokesman, in the '30s and '40s, called the plans "medical Soviets," and only federal criminal indictments, a series of trials and a conviction for restraint of trade won the plans' doctors the right to admit their patients to hospitals.
Came World War II, and West Coast industrialist Henry Kaiser expanded a small medical plan caring for Kaiser construction workers into what would become the Kaiser Permanente system. It was, and is, basically a larger version of the old co-op plans, with a nonprofit corporate structure rather than a member-run board.It hired its doctors on contract.
The Kaiser plans built clinics and hospitals up and down the West Coast but not far beyond. Then, in the 1970s, a Republican administration -- Richard Nixon's -- embraced this once radical idea of engaging doctors to give people care for a flat payment and applied a clever new name: the health maintenance organization.
Why did Nixon, and many companies, embrace these plans? The prepaid plans, now universally called HMOs, took care to hospitalize their members only when absolutely necessary and to get them out as soon as possible. That cut costs, and by the Nixon years health costs had become a huge national headache.
Helped in many cases by federal start-up funds, HMOs started springing up across the country. One of the areas to respond most slowly, however, was the nation's capital.
Until 1972 there was still just one HMO here, the venerable GHA with 82,000 members then, mainly federal workers. But new plans were started that year by both George Washington and Georgetown universities. Kaiser arrived on the scene two years later, taking over the Georgetown plan.
The traditional fee-for-service doctors in many cities started responding to this new HMO competition by organizing what they called "HMOs without walls," or independent practice associations, IPAs. A group of doctors, sometimes 1,000 or more, sign up patients as their IPA's members and promise them much the same package as the other HMOs: almost all their medical care and hospitalization for so much a month. Unlike the first HMOs, these IPA-type HMOs consist of doctors working in their own offices rather than joining in clinics.
Today there are eight HMOs and IPAs in the Washington metropolitan area, with 400,000 members, 12 percent of the population. (This doesn't count the Columbia Md. Medical Plan and some in Baltimore, which enroll many area residents.)
The HMOs with their doctors "under one roof," or in several centers but part of one medical group, include: Group Health Association, with 143,000 members, seven clinics and an eighth (at Baileys Crossroads) due to open in February. Information for enrollment requirements and charges: 966-4357. Kaiser Permanente, which bought the Georgetown University plan. With 4.8 million members nationwide, Kaiser has staked out the East Coast as a new expansion area. Last week it dedicated the latest of seven Washington area centers (at 1011 N. Capitol St.). Washington area membership, nearly 144,000. Information: 364-3434. The George Washington University Health Plan, with 20,000 members, now run by a national investor-owned health corporation, American Medical International. The university this year sold 80 percent of its equity to AMI but retains a degree of control over staffing and quality of care. There is one clinic at 1229 25th St. NW, and others are scheduled to open early next year in Greenbelt and Alexandria. Information: 223-5226.
There are five new IPAs, associations of doctors giving prepaid care out of their own offices: MD-IPA is the largest, with 62,500 members and more than 1,000 doctors, largely in suburban Maryland but with an expansion into Virginia and the District announced. Information: 762-8205. HealthPlus, 20,000 members throughout the area. 277-6520. Network Health Plan, 11,000 members in Northern Virginia and the District. 849-8800. CapitalCare, organized this year by Washington area Blue Cross-Blue Shield, the area's main seller of traditional health insurance, to meet HMO and IPA competition throughout the area. (703) 553-2270. Physicians' Care, planning to start enrolling members in January throughout the area. (703) 525-0602.
There is still another offshoot of the HMOs and IPAs. This is the preferred provider organization, PPO, being offered by some employers and insurance firms. Aetna's Choice plan is one example. There are many variants, but you typically get all your care for a flat monthly charge if you use the plan's "preferred" hospital or the plan's "preferred" doctors or both. If you go elsewhere, you pay at least part of the bill, sometimes all of it.
More and more employers throughout the country are offering some PPO variant. And some workers are about to have no choice of old-style fee-for-service health insurance at all. The 6,000 United Auto Workers who labor for General Motors' new Saturn plant in Tennessee will be able to choose between only an HMO and a PPO.
All this may be just the beginning.
The number of plans may get pared down in some cities. Chicago had 25 HMOs a few years ago. Tough competition has cut the number to 10.
But membership totals are sure to increase. The nation had only 50 HMOs in 1973 when the Nixon push began. Now it has 350 with 20 million members, and membership has been growing by 20 percent a year. By 1993, believes Dr. Paul Ellwood, who coined the name "health maintance organization," enrollment in these new-style plans will reach 50 million.Next Week: A look at Kaiser's doctors.