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Patients' Bill of Rights

 

THE TWO PLANS

A Congressional Budget Office (CBO) analysis indicated that the median annual health insurance premium would increase 2.9 percent under a Health Maintenance Organization (HMO) reform bill by Frist-Breaux and supported by the Bush administration. In comparison, a rival plan by Senators Edward Kennedy (D-Massachusetts) and John McCain (Republican-Arizona) would increase annual premiums by 4.2 percent. (1)

When necessary medical treatment is denied the Frist bull would allow patients to sue health plans. However, it caps damages at $500,000 and limits suits to federal courts. The caps would keep insurers from increasing rates say supporters.

The McCain-Kennedy plan to allow suits in state and federal courts and awards of up to $5 million is the focus of the Democrats. Because of the new rights patients would get, supporters of this measure say any premium increase is a small price to pay.

UNINSURED RATE WILL INCREASE

Eighty percent of the health insurance to employees are provided by the nation's employer's but they are worried that they will be drawn into a web of lawsuits by a patients rights legislation.(2)

The National Federation of Independent Business said on June 18, 2001, "The Congressional Budget Office estimates the Kennedy-McCain bill would increase costs 4.2 percent, which translates into 1.2 million more American's without health insurance." (3)

The small business lobby said, "And that doesn't even count employers who will stop providing insurance because they fear lawsuits over coverage decisions they don't control." (4)

For each one percent increase in the cost of insurance, 300,000 Americans will lose coverage indicates the Health Insurance Association of America. (5)

By 2010 the managed care reform bills currently being debated in Congress could cause an additional 9.2 million Americans to lose their health care insurance according to a new analysis by the Employment Policy Foundation. (EPF). (6)

Annually, about 56,000 new lawsuits would be filed with a cost burden to employers and health care plans of $7.9 billion to $16.3 billion estimates EPF. From the new lawsuits, attorneys could receive at least $1.4 billion to $2.8 billion annually.

Currently, managed care or HMO plans cover more than 88 million people in the United States (U.S.). However, 17.2 percent of the population or 47.1 million people did not have any form of health insurance in 2000 according to the Bureau of Labor Statistics Current Population Survey. (7)

Health Plan Ratings

Often based on ratings by people who say they are in HMO's are claims that health maintenance organizations (HMO's) give poorer quality care than other types of managed care or traditional indemnity insurance.

About 25 percent of people in private-sector health plans, however, incorrectly identify whether or not they were in an HMO according to a study from the Center for Studying Health System Change (HSC). In general, people's perception of the quality of caare they receive was negatively affected by their belief even if they were not actualy in an HMO because of the negative view of HMO's.

Using a number of quality indicator, 60,000 privately insured individuals were asked to rate their health care in a survey used by researchers. From health insurers, the responses were checked against follow-up data. For about 6,000 individuals, a definitive match to a specific insurance product was made.

HSC researchers found when comparing the data, 11 percent of the individuals in other types of plans incorrectly thought they were in an HMO, and 13 percent who were in an HMO incorrectly thought they were in another plan type.

Compared to those who believe they were covered by other types of insurance companies who thought they were in HMO's rated their plan lower on most measures by modest margins. In rating those who actually were in HMO's and those who actually were in other kinds of insurance plans, researchers found that there were virtually no differences in ratings.

Suing HMO's

When HMO's exercise medical judgment about the necessity of a proposed treatment, they are currently subject to malpractice laws and may be sued in state court because of a 2000 Supreme Court ruling in Pentagon v.s. Hendrick. Still exempt from state action are disputes about a health plan contract. However, in federal court, these cases patients may bring suit.

As demands of the market and evolving case law have decreased, public dissatisfaction has started to subside for the Patient's Bill of Rights.

Compared to a similar survey three years ago, Americans report far fewer problems with their health plans on every standard. For example, complaints have declined by more than 40 percent in some cases.

Protecting patient's rights are ranked at the bottom of the list although most people think health issues are "very important" for Congress and the President.

If it means premiums were increased by $20 a month, support declined to 60 percent from 85 percent that initially said they favored the Patient's Bill of Rights. When asked if "it meant that some companies might cease offering health plans to their workers" only 41 percent continued to support it, and 47 percent opposed it.

Is the Patient's Bill of Rights Really Necessary

When HMO's exercise medical judgment about the necessity of approved treatment, they are subject to malpractice laws and may be sued in state court. However, lawmakers are still prompting the Patient's Bill of Rights and the idea that one cannot sue their HMO as a result of a federal law called ERISSA.

In April, Sharon J. Arkin, a spokeswoman for the American Trial Lawyers Association, testified before Congress, "The courts have carved out an exception and help that malpractice claim's against an HMO are not pre-empted by ERISSA." (8)

HMO's are being sued as if indicated in "Mealey's Managed Care Liability Report," a legal newsletter devoted solely to these suits. Also, a regular column, "HMO Lawsuit Watch," that takes a half dozen new suits every issue is included in the industry publication "Managed Care Week." Multi-million dollar damages sometimes result from these individual suits. Well-financed medical societies sometimes bring class action suits. Suing HMO's is a growing industry.

HMO's have backed off some of the more troublesome practices in part because of the litigation explosion. "Gatekeepers" or "capitated" or "captated" payments to physicians are no longer relied on by HMO's. Pre-admission certification requirements and utilization reviews are being dropped. They have ceased being HMO's at all, moving instead to becoming "point-of-service" plans or "preferred" provider organizations, in many cases.

"Right now, we is moving back to letting medical professionals decide what is necessary with little or no budget constraints," said Brander's University professor and former Clinton advisor Stuart Altman (9). One of the factors driving up health care costs again is the removal of "budget constraints." Premiums are increasing again at three or four times the overall cost of living after several years of premium increases lower than the rate of inflation. Rate hikes as high as 30 percent are being given by small employers.

Rising costs have not alarmed most Americans because many Americans rely on employers, insurers, or the government to pay for their health insurance. As a result, consumers are not sensitive to the costs of their treatment decisions, and this is the real issue that is not being addressed in health care.

The President said he will fight proposals that open the door to unnecessary lawsuits against HMO's but urged Congress on June 20, 2001, to pass a patients' rights bill before the end of the year.

He said, "The idea is to serve more patients not create more lawsuits in America." (10)

An alternative to a Democratic health care proposal sponsored by Senators John Breaux (Democrat-Louisiana) and Bill Frost, (Republican-Tennessee) and James Jeffords, an independent from Vermont was praised by the President.

However, many small business owners are still worried about the legislation.

Philip Tredway, the owner of an Erie, Pennsylvania plastic company that has 55 employees says, "I don't want to stop offering benefits." (11) But, he worries if the Democratic bill becomes law, he'll have to deal with out-of-control costs and the potential that his company will be hit with a business-killing lawsuit.

A slate of guarantees for patients, including emergency care, access to obstetricians and gynecologists and payment for costs associated with clinical trials would be provided by the Democratic bill.

Also, either federal or state courts would let patients sue insurance for a range of damages, including punitive ones, in the Democratic bill.

Employers could easily be caught in the net of lawsuits under the change being considered said Paul Paynet, a lobbyist for the American Benefits Council, which handles benefit issues for Fortune 500 companies. (12)

For example, if employees tell an insurer to follow certain medical standards when deciding which treatment to cover, they could be liable for "exercise of control" said Dennett. He added, the employer could be liable for dictating the standards in the first place if a patient is injured because the health plan followed those standards.

Dennett said, "They continue to insist employers have no liability when they actually do." (13)

What Does America Need

A health care system that gives Americans greater control of their health plans and choice is what is needed not a patients' bill of rights that provides attorneys lifetime employment. What is needed is a universal coverage in a system that is based on market competition and personal choice. The most effective and versatile tool to achieve this goal would be to implement a universal tax credit and easier access to new forms of coverage. This credit would allow those happy with their current employer-sponsored coverage to keep it but would provide neutrality between employer-based coverage and coverage obtained in other ways.

 

(1) Anjetta McQueen, "Analysis: Bush HMO Plan Would Be Less," The Associated Press, June 8, 2001

(2) Anjetta McQueen, "Patients' Rights Bill Worry Employers," The Associated Press, June 20, 2001

(3) Donald Lambro, "Patients' rights bill stalls in Senate," The Washington Times, June 19, 2001

(4) Ibid

(5) "Patients' Rights Legislation: The Triangle of Health Insurance: Quality, Cost and Access," Policy Backgrounder, June 20, 2001, Employment Policy Foundation

(6) Ibid

(7) EPF tabulation of data from the Current Population Survey. March Annual Demographic and Income Supplements

(8) Greg Scandlen, "Patient's Rights' Misses Today's Issues," New York Post, June 16, 2001

(9) Ibid

(10) Anjetta McQueen, "Bush Wants Patients' Rights Bill," The Associated Press, June 20, 2001

(11) Ibid

(12) Ibid

(13) Ibid