UNITING PHYSICIANS & PATIENTS AS A VOICE IN HEALTH CARE
This category includes a host of workers who may or may not be "professionals" but are certainly not health care professionals (technicians, paraprofessionals, janitors, quality assurance analysts, administrative supervisors, secretaries, and medial record clerks). Because the DOH does not require HMOs to break this "other professional services" category into "administrative spending" and "other professional health care services," it is impossible to determine what proportion of the 18.8% of HMO expenditures devoted to this category actually goes to patient health care. Because the HMOs have become quite sensitive to public criticism about overhead costs in the last five years, it is reasonable to assume that the HMOs have pushed every service that could reasonably be called a health care service into the "health care services" category, and, therefore, that the "other professional services" category is for services not rendered to patients. But this is speculation. Only the HMOs can answer the question. Does all of the 18.8% in "other professional services" qualify as administrative spending? It is difficult to perceive of a rationale for an accounting system that places janitors, quality assurance analysts, and administrative supervisors in the same category as nurses, podiatrists, and optometrists.
Doctors and hospitals also incur administrative costs. In 1996, the clinics and hospitals which treated patients insured by Medica, HealthPartners and Blue Plus spent 7.6% of the revenue they received from these three HMOs on administrative functions, including responding to HMO demands for information, paperwork, claims processing, denials and utilization review.
Only 15% of HMO expenditures was spent on physician compensation, including salaries and benefits. Note also that the percent of expenditures devoted to mental health services appears to be unusually small. The 2.1% spent on mental health services is smaller even than the 2.4% spent on dental services. The 2.1% figure is also small compared to the 9% spent on mental health by large employers in 1989.(11) However, it is possible that whenever HMOs report more precisely the expenditures now lumped under "other professional services" that the mental health slice of the pie might be higher.
The HMOs examined here are sizable entities in their own right. But these three HMOs are embedded in complex webs of for-profit and non-profit entities. Figures 4-6 map the structure of these webs. The complexity of these entities makes any attempt to audit the HMO reports much more difficult and expensive. These figures show that each non-profit HMO has many for-profit subsidiaries. Also, two of the three Minnesota non-profit HMOs send millions each year out of state to "vendors", (United Health Care & Aetna/US Health Care). Each has offshore insurance subsidiaries. Each has mental health affiliates and some are for-profit. No detailed accounting between each HMO and its affiliates is available to the Minnesota public. We are unable to determine where Minnesota non-profit HMOs really spend our health care dollar.