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Can we really talk about rationing health care when executives and stockholders reap such hefty rewards from the business of rationing? MANAGED CARE ETHICS: THE CLOSE VIEW PREPARED FOR U.S. HOUSE OF REPRESENTATIVES COMMITTEE ON COMMERCE SUBCOMMITTEE ON HEALTH AND ENVIRONMENT BY LINDA PEENO, M.D. The National Coalition of mental Health Professionals and Consumers May 30, 1996

"It's horribly ironic," said Paul Menzel, a professor of philosophy at Pacific Lutheran University in Tacoma, Wash. The care of the poor once was supported by the wealthy and the insured, but now the opposite is happening, he said.
Some health policy experts like Uwe Reinhardt, an economics professor at Princeton University, see the situation as "brutal and inhumane." But, Professor Reinhardt said, doctors and hospitals are trapped in it.
Mark Pauly, a professor of health care systems at the Wharton School of the University of Pennsylvania, said there was no real villain. "I don't think it's exactly good versus evil," he said,
"it's just business." Medical Fees Are Often Higher for Patients Without Insurance New York Times April 2, 2001

We have relinquished the delivery of care in this country to companies who (turned) the market model on its head: in the usual market setting, businesses succeed to the extent that they make a product available. In the managed care business, companies succeed financially to the extent that they withhold a product. I will provide some insight into how this is done.
In these various capacities, I have read thousands of documents-business plans, board minutes, health plan contracts, policy and procedures manuals, internal memoranda, utilization and quality reports, physician profiles, financial data, testimonies from health care employees, and other evidence of internal workings of health plans.
Presentation to the Romanow Commission on the Future of Health Care in Canada by Linda Peeno, MD Louisville, Kentucky USA May 31, 2002 (This is an outstanding review of corporate for profit medicine concentrating on managed care but the insights are as applicable to all market controlled for profit care. Dr Peeno writes from the heart of the corporate system of which she has vast experience and understanding. The full presentation is well worth reading. If you have limited time read this rather than my pages - but read it anyway. Here is the link )

Access Managed Care

There is a vast amount written about managed care and its evils in the medical and lay literature. The public is angry and disgusted. Television documentaries highlight the issues. Television soap operas reflect this public image portraying hospital operators and HMO "gatekeepers" as villains. Citizens and doctors across the USA rebelled and took to the courts and to their politicians. Managed care received a huge shake up and responded by struggling to maintain control in the corporate sector and limit the legislative restrictions politicians were being pressured to introduce. The doctors in particular but also the public were able to make some inroads into the power of the Health Maintenance Organisations (HMOs), wring concessions from them and obtaining some legislative restriction on their activities. It is difficult to say how much has been achieved by tinkering with the system in this way.

The full power of the corporate structures in the USA and their ability to hijack the political and judicial processes is revealed. Ultimately the HMOs emerged intact, still powerful, still able to rapidly increase premiums and make profits. In this they were assisted by a strongly pro-business republican president and government. The US system continues to be based on competitive market forces with the HMOs holding the key central ground. In September 2003 the complex legal and legislative processes are still unraveling and the battles are not quite over. It remains to be seen whether the protestations and promises for reform will be any more permanent than those by Tenet Healthcare. The market is a hard task master.

The pages:- I once intended to research the area in detail and write about managed care, about individual HMOs and about their many failures but I am not going to do so. There is simply too much material and there are already too many pages on this site. There is information elsewhere. An explanation of the forces at work and what has happened illustrated by quotations from the 400 odd articles which came up in a search of my data base should suffice. I will be writing partly from memory. There were vast amounts of material before I opened my data base and there is much more recent material still out there which I am not going to tackle.

Once again I will follow the strategy of a short descriptive narrative for each section followed by extracts from the press which tell the story, give illustrative instances and in depth insights. Some of the material reflects the corporate point of view and illustrates their unwillingness to accept the human consequences of their activities. The material is taken from copyright material which belongs to the publisher listed or its owner. It is made available to stimulate discussion for the common good. It should not be used for commercial purposes. I believe that this is fair use.

I will explore the issue using three web pages.

Managed Care I :: The issues, the problems and the crisis.

This page looks at managed care, what it does, how it works, why it is so dysfunctional, and why it has become so unpopular.

Click Here -- to go to part I

Managed Care II :: The crisis unravels, politics and law suits

This page describes the battlefield and what happened there. How people power and corporate power clashed. Concessions were won but the dominating power of the HMOs remained.

Click Here -- to go to part II

Managed Care III :: Globalisation of Managed Care

The managed care crisis started in 1996 at the same time as opportunities for growth in the USA dried up. During 1996, 1997 and 1998 there was a frantic and enthusiastic effort to expand internationally. This globalisation was driven by pressures from world funding bodies such as the world bank. They made privatisation of health care a condition for loans and supported managed care as part of this. Multilateral trade agreements facilitate the process. As the system crumbled in the USA true believers displayed an almost missionary zeal to spread the message and the wonders of managed care across the world. Their behaviour gives an interesting insight into the thinking of these people and their lack of morality.

Click Here -- to go to part III

Other Web Sites

I have no experience of managed care and am writing at a distance using material others have written. This is sometimes helpful because, even when you are wrong on details, you are able to get a broader perspective and gain insights which those up close miss. There are nevertheless major limitations and this needs to be synthesised with people on the ground. The www is dotted with web pages by groups of citizens who have banded together and by individuals who have been badly burned by the system. I have not gone searching. The following are simply a few www addresses I have at hand.

Dr. Linda Peeno has worked for HMOs denying care and has extensive knowledge as well as breadth of understanding. She made submissions to a congressional committee in 1996 and to the Royal Commission into Healthcare in Canada in 2002. Both are well worth downloading and reading carefully. I would even suggest that you do it before you look at my web pages. Both presentations are available at

A web site run by "The National Coalition on Mental Health Professionals and Consumers" would be a good one to follow up. The address is

"Making a Killing : HMOs and the Threat to Your Health" is a book about managed care. I have not read it but information is available at

Physicians for a National Health Program is a physicians group strongly opposed to managed care pressuring politicians for a universal insurance system like Canada

Patients who have been injured and families of patients who died have been frustrated by their inability to get information, justice and closure. Many have opened web sites which provide links to material about managed care as well as stories of personal suffering amd misuse. Kaiser is a prime target of angry citizens. is a good example.

You would hope that patients who were dying would not have to adopt the "customer beware" slogan and would not have to worry that their vulnerability was being exploited for profit. Given what we now know about the way the market operates we should not expect this. In the USA hospice care is a commercial activity funded and operated through corporate entities including HMOs. The Hospice Patients Alliance aims to give citizens the knowledge, insight and help they need to protect themselves.

Older Managed Care Pages

Managed care got some attention in a number of other older pages in other sections on this www site.


In August 2000 I examined a large number of recent corporate health care documents and wrote a review which I sent out with the originals. One of the sections dealt with Managed care describing some of the practices and developments in greater detail than these pages do. I put the review on the www.

CLICK HERE -- to go to the section on managed care in this review.


In November 1997 Modern Healthcare published an international edition in which it described the spread of managed care to other countries. At the time we had rid ourselves of Tenet/NME and Columbia/HCA. Instead we had Sun Healthcare and HealthSouth. The government was battling doctors trying to force them into managed care. Politicians would have welcomed a powerful US ally.

I found the fervour with which business groups approached the opportunities for profit and the nature of their thinking about health care very disturbing. The articles give an insight into the minds and the practices of the managed care companies. I responded to this angrily. I wrote a covering analysis criticising the material and circulated it. I put this analysis on the web site in 1998. These articles give an insight into the similarities and differences in the thinking of corporate purchasers when compared with corporate providers. Much of this material is also covered in the 2003 page on Globalisation of Managed Care where I have given extracts from some of these articles.

CLICK HERE - to go to the information about international expansion of managed care on this early 1998 web page.

Corporate Medicine - I told you so

I included information about Kaiser Permanente in two pages I wrote in 1997. These were covering comments to articles I circulated. These were to challenge politicians and show that what I had been telling them about government policies for some years was true. I was also showing the similarity between the behaviour of the corporate marketplace in the USA and Australia. I have kept one of these pages on the site and removed the other.

CLICK HERE -- to access a short entry about Kaiser Healthcare in a March 1998 web pages

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This page created in September 2003 by Michael Wynne