HMO Market Still Ahead of Senate's Health Care Bill

A set of protections for Americans in managed-care plans was pushed through the Senate on June 30, 2001, sounding a victory for Democrats after years of political clashes. However, the nation's largest health insurers have already started to give their patient's much of the care that a federal law would guarantee. Ironically, no one mentioned that during the feverish oratory leading up to the Senate vote.

Whenever patients believed they needed to go, Aetna U.S. HealthCare, Inc., the nation's largest managed-care company, started paying for emergency room visits four summers ago. Physicians were told they no longer needed the company's permission to perform most medical procedures in 1999 by United HealthCare. In many states dissatisfied patients are now allowed to file grievances with outside appeals boards by Blue Cross and Blue Shield plans.

In fact, the private marketplace has reacted much more rapidly than the government when confronted with rampant consumer resentment of managed care. W. Allen Schaffer, senior vice president and chief medical offices of Cigna HealthCare, which insures 14 million people said given the changes that major health plans have already made, a federal law "seems anachronistic - like an idea whose time has gone."

The government's slow motion on patients’ rights illustrates how difficult it is for the government to improve people's medical care, even in limited ways nearly a decade after Congress spurned former President Bill Clinton's ambitious plan to overhaul the U.S. health care system.

Congress is arguing over problems with managed care that the industry has already started to resolve, while the government has not shifted its attention to a fresh problem according to health insurance executives, researchers, and leading corporate benefits' consultants. Once again, medical inflation has started to climb rapidly after relatively calm for several years. The reason for the increase has been the relaxed constraints of managed-care plans on medical care - precisely the way a patients’ bill of rights would require.

Frank Sloan, director of Duke University's Center for Health Policy Law and Management said, "Congress doing what's it's doing now is picking up somewhat late in the game."

The insurance industry has fought vigorously against a patients’ bill of rights, arguing that the government should not promise people easier access to medical specialists or emergency room care - benefits that most health plans controlled tightly at the time when Congress first started to talk of giving patients more clout against health maintenance organizations.

However, the debate narrowed to one main issue as the political appeal of these proposals grew and as the care they would guarantee became more common. The fact that they agreed on the kinds of care patients should be guaranteed is proudly cited by politicians of both parties. And the main change health insurers now fear – giving patients more freedom to sue their plans – the political parties continue to disagree.

However, far more important to most patients is their ability to see the kind of physician they want than the right to sue say consumer advocates and industry analysts. Political pressure for more regulation has remained intense as a result of a variety of surveys demonstrating that the recent changes in managed care have not lessened public antipathy toward managed care.

Not entirely unrelated to government action are the changes that the managed care industry has adopted. In an effort to ward off more federal regulation, the industry has been eager to demonstrate that it can improve itself.

A voluntary code of conduct for its members has been created by the American Association of Health Plans. For example, plans should not prohibit physicians from discussing expensive treatment options with their patients. (The Senate bill has this feature).

An accreditation system for managed-care plans that agree to meet certain standards is run by the Washington-based National Committee for Quality Assurance. The legislation Congress has been debating increasingly match those standards. For example, the committee included a requirement that plans allow their patients to bring in outside appeals board complaints two years ago.

A growing number of states have adopted managed care laws during the past few years that have influenced HMO's rules even in the absence of a federal law say analysts. Currently patients are given avenues for appealing health plans' decision and have made it easier for people to get emergency-room bills paid by about 40 states. Certain patients are allowed to temporarily keep physicians who have left a health plan or see some kinds of medical specialists without needing prior approval from their primary physician by more than 30 states.

State laws - and the specter of federal regulation have not been the main reason they have changed their rules say managed-care officials. William Popik, Aetna's chief medical officer said, "The motivation was, it's what consumers wanted us to do."

During the past several years, large employers were willing to heed complaints about the frustrations of dealing with managed care and to purchase the type of coverage that gave employees more medical freedom said Peter Kongstvedt, a benefits consultant with Cap Gemni Ernst & Young. As the economy boomed and companies were eager to offer good benefits to attract scarce workers, this was particularly true.

Far less significant are some of the major problems the bills in Congress are trying to fix - obstacles to seeing the type of physician patients want - in such a climate. To looser "preferred provider" arrangements that give people discounts for seeing physicians in a health plan's network but that let them see other doctors for a higher fee, large numbers of Americans have switched from tightly controlled HMO's.

Some plans have also gone further than a federal law would require, allowing people to easily visit types of specialists not mentioned in the Senate bill. According to a survey by the American Association of Health Plans about one-third of the patients in HMO's no longer have to get permission to go to a dermatologist, allergist, cardiologist or orthopedist.

Widely disliked by physicians and patients alike that require physicians to get permission in advance prior to admitting a patient to a hospital or perform a medical procedure is one profound shift that moves away from the rules. The nearly 10,000 procedures for which physicians had to get approval, Health Partners, Inc., a Minnesota-based HMO, five years started to eliminate. The list had been reduced to fewer than 100 as of a year ago.

Unless a company offered its workers a "point-of-service" alternative that would allow them to go to a physician of their choice, Health Partners then announced it would no longer sell coverage to a company.

George C. Halvorson, president and chief executive of Health Partners said, "We did that because our surveys indicated consumers wanted choice, and we wanted to promote choice. This was a market response."

The Association of American Physicians and Surgeons (AAPS) is sending out an alert to millions of patients across the nation warning the "Patients’ Bill of Rights" is, in reality, a "Bill of Goods and that premiums could escalate 20 percent or more."

The legislation is not about "heath care" warn the physicians but is about money and "about politicians getting in bed with the trial lawyers so that the lawyers can get their mitts on more lawsuits and the politicians can rake in $12.4 million in campaign donations from the trial lawyers."

"We're planning on raising premiums by 20 percent to start," and that is only the beginning, an insurance company executive has told the AAPS.

Reference: Wes Vernon, "HMO Lawsuit Bill Will Make You Pay More for Insurance,", July 13, 2001; Amy Goldstein, "Senate's Health Care Bill Lags Behind Some HMO's," The Washington Post, July 1, 2001.

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