Published in: Letters to the Editor, San Francisco Chronicle, April 8, 1997, page A 18.

Corporate Profits vs. Patient Care.

Editor - Today's news (Chronicle, April 2) of the proposed merger of Foundation Health Corporation and Health Systems International provides significant follow-up to an earlier report. A February 22 item in The Chronicle detailed the results of a study done by the California Medical Association comparing the percentage of revenue devoted to patient care in some 15 of California's managed-care groups.

That report indicated that the nonprofit Kaiser Foundation Health Plan spent 96.5 percent of revenue on patient care while Foundation Health's comparable share was 77.4 percent and Health Net, a subsidiary of Health Systems International provided 80.1 percent of revenue to patient care. The remaining 20 to 23 percent of health-care monies in the for-profit groups went to administration and profit.

Today's news reveals one financial item which accounts for part of this incredible diversion of health care funds. The president and CEO of Foundation Health Corporation is scheduled to receive a $21 million "payout" as a result of the proposed merger of these groups.

Is there a moral justification for allowing our limited health dollars to be skimmed off to pay for paper-pushers dedicated to maximizing return to stockholders and blocking services to the medically needy?

Ours is the only developed nation where decisions of appropriate medical care are made by non-medical administrators and in which "managed care" means care for corporate profits. The quality of medical resources in the United States is second to none. Our system for distribution of these sources is an international disgrace. We all deserve better.

David P. Michener, M.D.
Point Richmond