Paul M. Ellwood Jr., an HMO pioneer, dies at 95

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Paul M. Ellwood Jr., a former doctor who spent decades trying to overhaul America’s health care system, including developing and naming the Health Maintenance Organization, an insurance model he championed in an effort to provide better care at a lower cost, died June 20 at an assisted living facility in Bellingham, Washington. He was 95 years old.

The cause was organ failure, said his wife, Barbara Ellwood.

Trained in pediatric neurology as well as physical medicine and rehabilitation, Dr. Ellwood ran a clinic in Minneapolis before he began working on national health policy in the late 1960s. He became known as “the father of the HMO though the term is somewhat misleading: large medical groups like Kaiser Permanente effectively operated as HMOs for years, providing comprehensive healthcare to patients who had access to in-network physicians and other services. in exchange. for fixed annual premiums.

Yet while the fundamentals of the model had long been in place, it was Dr Ellwood who gave the “prepaid health plan” an attractive new name and offered a comprehensive vision for national reform. He coined the term HMO in a 1970 Fortune magazine article and proposed a health care system driven by market forces, with groups of providers competing for patients trying to deliver better care to lower prices. Unlike traditional health plans, doctors would be paid based on the number of patients they treated, rather than for each procedure they performed.

Dr Ellwood hoped the system would create a financial incentive for doctors to keep patients out of hospital, with a focus on their long-term health. He began pitching the idea to the White House in 1970, after sitting next to a Nixon administration official on a flight, and found a receptive audience eager to offer an alternative to a national diet. health insurance proposed by one of the presidents. rivals, Sen. Edward M. Kennedy (D-Mass.).

Many of Dr. Ellwood’s ideas found their way into the Health Maintenance Organization Act of 1973, which required companies with 25 or more employees to offer an HMO option with their traditional insurance plans, and which provided funding to help start new new HMOs. Over the next decade, the rise of HMOs helped spur the development of other managed care options, including preferred provider organizations, which came to dominate the market.

Dr Ellwood “took the longstanding Kaiser model and gave it an overhaul that had a huge impact,” said Michael Sparer, a health policy and management researcher at the University’s Mailman School of Public Health. Columbia. “He didn’t ‘invent’ the model,” Sparer added in an email, “but his work has catalyzed an expansion of the model.”

More than 70 million Americans have enrolled in HMOs, but the plans have also sparked a backlash from critics who question whether they actually cut costs and lead to better care. While Dr. Ellwood once envisioned a network of large nonprofits, many HMOs are run for profit, fueling criticism that the groups are more interested in their investors than their patients. Complaints about the lack of “in-network” doctors have been rife since the 1990s, and critics said the plans led doctors to cut corners because they were paid upfront.

Savings from the plans have proven limited, according to Paul Starr, a Princeton University sociologist who served as a senior health policy adviser to the Clinton White House. “Here you had an idea that was certainly very promising. There were high hopes invested in him – I shared some of those hopes,” he said in a phone interview. “It did not work.”

Dr Ellwood defended the HMO model but also criticized the way his vision was implemented. Policymakers and consumers focused too much on the cost of coverage rather than the quality of care, he said, and the care itself was often inadequate. To promote accountability, he called for more reporting from health organizations as well as a national health outcomes database.

“Only part of the dream I had for America’s health care system has come true,” he told The New York Times in 1996. “There’s a tremendous amount of unfinished business.”

The first of two children, Paul Murdock Ellwood Jr. was born in San Francisco on July 16, 1926 and grew up in Oakland, California. His mother was a nurse and his father was a family doctor – “a medical missionary type,” as Dr. Ellwood later put it – who did house calls in his 80s.

Dr Ellwood recalled his annoyance at having to wait in the car on Christmas Eve while his father attended to patients. Even when he entered the family business, he sought a different path in medicine. “Being an independent practitioner was never a goal,” he told The Times. “The autonomy aspect meant nothing to me.”

After graduating from high school, he served in the Philippines as a Navy pharmacist’s journeyman during World War II and enrolled at Stanford University, where he graduated with a bachelor’s degree in 1949 and a medical degree in 1953. He interned in pediatrics at the University of Minnesota, later becoming a professor at the school and founding its pediatric neurology program.

Shortly after beginning his residency, Dr. Ellwood began working at the Sister Kenny Institute in Minneapolis, where he treated children with poliomyelitis and, within six months, was appointed head of the services of ‘hospitalization. He was trying to convert it into a rehabilitation hospital in the late 1950s when he started thinking about health care, realizing that as the hospital improved its rehabilitation treatments, the beds were emptying faster.

“The hospital started losing money,” he said in a 2010 interview with health policy professor Anthony R. Kovner. “I thought, ‘There’s something perverse about the incentives in this business. The more clinically successful we are, the poorer we are financially. Over time, he told Neurology Today magazine, “I began to see the healthcare system as my patient, instead of the children with neurological conditions that I had been trained to deal with. treat.”

Dr. Ellwood retired from practicing medicine after 17 years and refined his HMO plan while serving as executive director of InterStudy, a health policy think tank in Minneapolis. He then shaped health policy debates through the Jackson Hole Group, a loosely organized gathering of academics, industry executives, politicians and healthcare providers who met at his country home. from Wyoming, where Dr. Ellwood was known to break the ice at gatherings by dressing attendees. in ridiculous costumes.

The group developed an approach to care known as “managed competition”, in which regulations were meant to work in tandem with the market to contain costs. Led by Dr. Ellwood and Stanford economist Alain C. Enthoven, the model served as the basis for what became the Clinton administration’s health care plan. But Dr. Ellwood and other supporters walked away from the plan after new regulations and tax provisions were added, and the proposal collapsed in Congress in 1994.

Dr. Ellwood’s marriage to Elizabeth Ann Schwenk ended in divorce. They had three children: David Ellwood, former dean of the Kennedy School of Government at Harvard University, who lives in Winchester, Mass., and Winter Harbor, Maine; Cynthia Ellwood, education teacher and former public school principal in Milwaukee; and Deborah Ellwood, who runs the Maine Community Foundation in Ellsworth.

In 2000, Dr. Ellwood married Barbara Winch, who helped him develop the Jackson Hole Foundation. In addition to his wife, of Bellingham, survivors include his three children; five grandchildren; and two great-grandchildren.

In a telephone interview, his wife said Dr Ellwood had “probably the happiest time of his life” during the 20 years they spent in Bondurant, a small town about 30 miles south of Jackson, Wyo., where they lived on a ranch with about 20 horses, three dogs, and a cat. Dr Ellwood skied into her 80s, she said, but increasingly spent her time riding horses in the backcountry, getting into the saddle even after repeated accidents .

“He broke his neck twice, I think each rib at least once. He even broke his shoulder blade once, and it’s really hard to break. But he didn’t care, she said. “I remember he went on a pack trip that lasted a few days. They encountered deep snow, rain, sleet and hail. It was just deplorable conditions. He came back and said, ‘That was so much fun!’ »

Dr. Ellwood, she explained, “was probably the most optimistic person I have ever met in my life. The whole world could crumble and somehow it would find a silver thread and cling to it.

Indeed, when Dr. Ellwood described his decades-long effort to overhaul the health care system, he often struck an optimistic, if a little tired, tone.

“He used a thousand little drops to create a wave,” he told The Times. “I guess it worked, so I guess I’ll keep doing it.”

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