Wall Street: Does Market Power Improve Care Quality?

Published on

American Health Line

An op-ed in today’s Los Angeles Times applauds the “extraordinary” move by UnitedHealth Group allowing doctors to make “medical necessity decisions,” calling it “a tribute to the growing HMO accountability movement and the shift on Wall Street that it has provoked.” According to prominent consumer advocates Jamie Court and Frank Smith, only the power of Wall Street “could force the nation’s second-largest health insurer to heed patients’ concerns about unnecessary intrusion by HMO bureaucrats.” They argue that HMO investors concerned about HMO liability are “increasingly questioning how HMOs will weather a growing wave of class-action suits and new state laws” that are making quality of care the new basis for national competition. Noting that UnitedHealth stock “shot up” after their announcement this week, Court and Smith say the “revolution … must be nourished by Wall Street,” so that other HMOs will follow UnitedHealth‘s lead. They claim the rise in UnitedHealth‘s stock prices indicate “investors’ belief that … (the) change will ‘further insulate them from the risk of litigation.”

More Than A Slogan

The writers opine that quality care “will have to become a real factor in the … health market and not just a slogan.” HMOs failing to deliver good care will be subject to costly lawsuits, negative media exposure and long term vulnerability in the market. These HMOs will face intense scrutiny by investors on their ability to survive long term, rather than on short-term profits. Court and Smith — authors of “Making a Killing: HMOs and the Threat to Your Health” — conclude, “If UnitedHealth can start the race to quality health care, there is no reason other HMOs, prodded by quality-conscious investors, should not follow” (11/11).

Consumer Watchdog
Consumer Watchdoghttps://consumerwatchdog.org
Providing an effective voice for American consumers in an era when special interests dominate public discourse, government and politics. Non-partisan.

Latest Videos

Latest Releases

In The News

Latest Report

Support Consumer Watchdog

Subscribe to our newsletter

To be updated with all the latest news, press releases and special reports.

More Releases