Citing losses and cuts in government payments, the United States' biggest health maintenance organizations are quitting managed care programs for the poor and elderly.
Their retreat is most pronounced in Medicaid programs. Analysts warn of a reversal of government progress this decade in steering the poor into the mainstream of the health care system.And advocates for patients say they fear the retreat will mean a return to crowded "Medicaid mill" clinics delivering inferior care.
Managed-care organizations like Aetna U.S. Healthcare, Pacificare, Oxford Health Plans, Kaiser Permanente and Blue Cross and Blue Shield Associations have shut down some of their Medicaid services, mostly in populous states with large pockets of urban poverty.
Managed care withdrawals also have spread to Medicare-managed programs for the elderly, primarily in rural communities where there are few patients and where clinics and doctors are scarce. In other areas, HMOs are reducing services to Medicare patients and charging them for care that previously had been fully covered.
But it is Medicaid, whose costs are shared by the federal government and the states, and half of whose 32 million recipients are in managed care programs, that has been most affected.
"Medicaid has gone sour" for a lot of HMOs, said Robert Hurley, an associate professor at Virginia Commonwealth University who is studying the phenomenon.
While businesses have generally frozen payments to HMOs for four years and are allowing increases of about 5 percent this year, some states have slashed payments since the mid-1990s by up to 20 percent.
Before most of the cuts took effect, the HMOs rushed into Medicaid managed care plans.