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News: Analysis & Commentary: HEALTH CARE
A SLUGFEST OVER HOW TO FIX MANAGED CARE
Moves to curb its excesses spark a brawl in Congress
President Clinton's endorsement on Nov. 20 of a Consumers Bill of Rights for health care guarantees a hot election-year fight over attempts to regulate managed-care plans. Already gop leaders and business groups have dubbed it a "stealth revival" of the President's massive 1994 health-care plan.
But the rhetoric is out of proportion to the commission's relatively modest proposals. The Clinton-backed package bars racial and sexual discrimination by health plans and strengthens the privacy of medical records. It also calls upon insurers, HMOS, and health-care providers to disclose more statistics about quality and member satisfaction and to set up external review boards to hear members' appeals when plans refuse to pay for treatments. The price isn't even scary: a rise of less than 1% in the overall cost of health care, according to the Presidential advisory panel's consultants. In today's competitive market, HMOS might swallow that cost rather than pass it along.
So why are business leaders and Republicans making such a fuss? Sensing that the Administration might be vulnerable on health after its 1994 debacle, opponents have decided to draw a line in the sand. Just around the corner in Congress and state legislatures are a raft of bills that they will like even less. Opponents figure a defeat on the Administration's package could take some steam out of the overall managed-care regulation effort.
For opponents, the biggest threat is the Patient Access to Responsible Care Act (PARCA), which has 204 co-sponsors in the House. This bill would let patients bypass primary-care "gatekeepers" to see specialists. That proposal alone, according to actuaries Milliman & Robertson Inc., could boost health premiums by up to 3%.
PARCA also puts limits on so-called "gag rules." Where the Bill of Rights merely requires physicians to disclose to patients any financial incentives that might limit treatment options, PARCA would bar any compensation that encourages providers to limit spending or procedures. That could eliminate practices such as capitation (flat annual fees for each patient) and fee discounts, thus boosting premiums by up to 9.5%, according to Milliman & Robertson.
LOST EXEMPTION? Sponsors of PARCA say those are worst-case estimates based on an extreme reading of the bill. Perhaps the biggest risk business faces from federal laws such as PARCA--and the 70 other bills pending in Congress--is weakening the protection that large employers enjoy against state insurance regulators. Since 1974, multi-state employers have been exempt from state rules that dictate insurers' practices or require health plans to cover specific treatments.
Business groups and HMOS argue that all the new and proposed mandates drive up costs. Blue Cross/Blue Shield Assn. calculates that premiums are 20% above the national average in high-mandate states, such as Georgia and Virginia. If Congress were to remove large employers' exemptions, they would be subject to broad patient-protection laws in 18 states and laws in at least 34 states requiring coverage of speech therapy, infertility treatment, or other specific conditions.
And there's more state legislation in the pipeline. The measures that worry health plans and employers most would let members sue HMOS for medical malpractice if the plans' treatment decisions lead to injury or death. Texas and Missouri have passed such laws--though court challenges have held up suits--and similar bills are teed up in New York and California. Businesses fear that HMOS will pass the liability on to them: "If employers become the deep-pocket targets of the plaintiffs' bar, all our benefits will be at risk," warns BellSouth Corp. Human Resources Director Hugh S. Brady.
So business has gone to the barricades alongside managed-care companies. The question is whether defeating something as timid as the proposed Bill of Rights will really influence a public already up in arms over managed care's increasing restrictions and costs.By Mike McNamee in WashingtonReturn to top