On June 5, the Wall Street Journal carried a front-page story by Lucette Lagnado about how some elderly, terminally-ill patients were targeted as part of a drive by Medicare to cut back on supposed fraud among hospice care providers. The reason, according to the Journal report, was some patients in upstate New York had lived longer than the six months anticipated by Medicare rules governing hospice care — so the government wanted its money back.

The broadcast networks — whose news programs frequently feature stories of how patients of Health Maintenance Organizations (HMOs) have suffered as a consequence of cost-cutting rules — failed to tell viewers about the Journal story or to provide their own follow-up report. But the lengthy (3,500-word) story offered an easy roadmap for any news network to follow — if, that is, it had any interest in documenting the human costs that can result from the mindless application of government rules.

Medicare pays $88 a day for dying patients to receive hospice care in their own homes or in home-like facilities. It’s almost always cheaper than either hospital care or nursing home care, and patients at the very end of their lives typically prefer the more comfortable, less institutional surroundings. Most of those who receive hospice care live only a short time. Dr. Nicholas Christakis, an expert from the University of Chicago quoted by the Journal, found that the average patient received hospice care for just the last 36 days of their lives; one out of seven patients (15.6%) died within one week.

But a small percentage of patients beat the odds: Dr. Christakis found that just under 15 percent of hospice patients survived for more than six months, usually patients with chronic lung disease, dementia or breast cancer. But Medicare’s rules allow only six months for hospice care, and in late 1997 the Clinton administration ordered a crackdown. A memo from the Department of Health and Human Services’ inspector general instructed the government’s Health Care Financing Administration (which runs the Medicare program) to start getting tough. "There has been less rigorous enforcement of the six-month prognosis requirement by the hospice industry, especially for noncancer-diagnosed patients," said the memo.

Rigorous enforcement meant that terminally-ill patients received letters from telling them they were no longer eligible for Medicare’s hospice benefits. The Journal described the plight of several patients who were caught up in the hunt for hospice fraud.

One, Rosie DesParois, was a retired nurse diagnosed with cancer who began receiving hospice care when she was 87 years old. According to the Journal’s account, Mrs. DesParois "loved the idea of spending her final days in her old house that she adored, tinkering in her flower garden" and the hospice nurses visited her regularly, bringing coffee and doughnuts and ensuring that she took her medicine.

Four years later, however, Mrs. DesParois was still alive and receiving care, and her hospice was being investigated by United Government Services (UGS), a subsidiary of Blue Cross-Blue Shield that is contracted by the government to administer portions of the Medicare program.

"As the inquiry closed in, the hospice decided it had to force out Mrs. DesParois," related the Journal’s Lagnado. "She was 91, but was lucid — and devastated."

Although one of her nurses continued to visit Mrs. DesParois, "without the resources the hospice provided, the sick woman couldn’t remain at home, and she slid downhill," wrote Lagnado. "Her house was sold, and....she was sent to a hospital, then a nursing home where she became almost unrecognizable. She had long been a small eater. But at the [nursing] home she stopped eating almost completely....Cancer spread to her pancreas and stomach. She developed gaping bedsores and was in agony. And on Sept. 16, 1998, Mrs. DesParois died, away from her home and the hospice staff."

"As it turns out, the government’s move backfired," reported the Journal. "Mrs. DesParois’s nursing home charged Medicare about $150 a day, nearly twice the hospice’s fee."

Ultimately, the hospice which cared for Mrs. DesParois filed for an administrative court hearing to fight UGS. The judge ruled against the government and ordered that the hospice be returned $85,000 that had seized from it as restitution. The judge said that the fact that a few patients lived beyond six months "represents an achievement; it is not indicia of fraud."

Often, network news departments rely on the front pages of major newspapers such as the New York Times, the Wall Street Journal and the Washington Post for story ideas. The same morning that the Journal ran its story on hospices, for example, ABC’s Good Morning America interviewed two high school girls who thought they were being awarded full college scholarships, only to discover that it was a mistake and there wasn’t any scholarship money. That story appeared in the Washington Post the previous Friday.

Since no network saw fit to dispatch cameras to help bring the facts uncovered by the Journal’s investigation to a wider audience, most Americans probably remain unaware of how the federal government’s unthinking efforts at cost savings hurt real people in the real world. Contrast the networks’ lack of interest in government’s mistakes with their longstanding practice of highlighting how privately-run HMOs sometimes jeopardize patients when they try to cut costs.

On February 22, for example, on CBS’s 60 Minutes II newsmagazine, Dan Rather profiled a patient, Cynthia Herdrich, who in 1991 went to her doctor complaining of pain. Her doctor suspected an ovarian cyst and, believing that no emergency existed, recommended that Herdrich receive an ultrasound test at another hospital 50 miles away the following week.

The doctor was wrong. When Herdrich was finally tested, she found out that she really had a burst appendix and a life-threatening infection. She survived, and won a malpractice suit against the doctor who misdiagnosed her. But her lawyer, Jim Gintzkey, also wanted to sue the HMO. Gintzkey argued that the incentives doctors received from the HMO to cut costs contributed to the chain of events that imperiled his client.

On 60 Minutes II, Herdrich, her lawyer and Dr. Harvey Wachsman, an anti-HMO activist, all railed against HMO cost-cutting procedures. Gintzkey told Rather that he believed "every decision that the HMO made in [Herdrich’s] case can be explained on the basis of their profit motive." Dr. Wachsman said, "There’s no question in my mind, this is not health care. This is, to me, managed fraud. It’s not managed care. There is no such thing."

On June 12, the Supreme Court ruled that Herdrich couldn’t sue the HMO under federal law. On the CBS Evening News, correspondent Jim Stewart painted the ruling as purely a procedural win for HMOs. "By granting them immunity from federal lawsuits," Stewart reported, "the justices just as clearly threw blood in the water at the state level, where juries have rarely been kind to health care systems."

In other words, HMOs will remain on the defensive — in the media as well as in the courts. But even as the networks continue to push the notion of the little guy getting trampled by big business, fairness would dictate that the networks also tell audiences about when the little guy gets run over by big government, and where government’s approach to cost-cutting harms both patients and taxpayers alike.

— Rich Noyes