A report last week from the American Medical Association’s Institute for Ethics that found 39 percent of doctors deceived insurers about patients’ health to help them get necessary care. As that the report was being released, Aetna U.S. Healthcare settled a lawsuit in Texas by agreeing to stop rewarding or fining doctors there based on whether they limited patients’ health care. The public might draw at least three conclusions from these events.

At least among the 39 percent of doctors the AMA study found, Aetna’s reward and punishment system didn’t work very well.

Many doctors have concluded that health maintenance organizations are not looking out for the best interest of patients.

Neither the doctor’s deceit nor Aetna’s incentive program is good for medicine over the long term.

The AMA report was based on a survey of 720 doctors in 1998 and found not only had 39 percent of them had committed what is referred to as “covert advocacy” but that 28.5 percent said this activity was necessary to provide high-quality care. More than half of the doctors who gamed the system reported that they were doing it more often than in the past.

It is not unusual, of course, for doctors to disagree on treatment regimens, but this is something different. These doctors are saying, in essence, that the insurers cannot be trusted to make sound medical judgments based on the facts and so need to be presented with more dire circumstances. An unfortunate result of this is that insurers may come to expect inflated reports from doctors and adjust their approval of treatments accordingly.

Let’s hope that such a spiral never forces a doctor to report an ear infection as brain cancer to be treated with amoxicillin. But this study, like the suit brought against Aetna and, late last year, the decision by UnitedHealth to give doctors final say on treatment decisions, demonstrate the importance of keeping medical decisions between doctors and patients, and goes to the heart of the value of the HMO system. If insurers cannot effectively place themselves between doctor and patient when choosing types of care, how much is left of the managed in managed care?

All of this points, again, to a major overhaul of the way the Americans pay doctors to deliver care.