AMERICAN GRAFFITI HOWARD BERLINER

'The HMO industry would produce a study showing the Ten Commandments increased healthcare costs if they felt 'Thou shall not kill' ever jeopardised their profit margins'

There seems to be no question but that managed care needs to be regulated. The protests of patients who claim they are being denied care, of doctors that they are losing their clinical autonomy, and of politicians that they are receiving too many complaints point to a need to do something about this method of financing and delivering care.

For the past six months, serious efforts have been made to pave the way for federal legislation regulating managed care.

In pursuit of issues that could win votes in the November elections, in April the Democrats offered legislation in both houses that would 'protect patients by regulating the practices of health insurance companies and HMOs'.

The bills were initially supported by consumer groups, the American Medical Association and the unions, and opposed by the Republican leadership.

Among the key points of the bill were: greater choice of doctors; better access to specialists; the right to participate in trials of experimental drugs; the right to appeal to an independent board against decisions to deny care; and agreement on what constitutes emergency care. These basic points had come out of a presidential advisory commission on patients' rights that had reported to President Clinton earlier in the year (HSJ, date?? April 1998).

An underlying issue was the question of being able to sue HMOs. Most Americans who have health insurance provided through their employer or their union fall under the protection of a federal law called ERISA (Employee Retirement Income Security Act), passed in 1974.

Under it, patients can sue their health plans if they are denied care but can only collect the cost of the service denied, not any damages for pain and suffering that might have occurred.

Many patient advocacy groups want the federal law amended to allow these law suits. The HMO industry argued that allowing such suits would greatly increase the cost of heath insurance but a study by the Kaiser Family Foundation reported that the ERISA change would increase premiums by only $40 a year.

The HMO industry hit back with its own study which showed that allowing patients to sue their HMOs would increase costs between 2.7 per cent and 8.6 per cent a year. The study revealed that if patients could sue, if any willing provider could join the plan, and if HMOs lost the right to determine medical necessity, then 240,000 people would lose jobs by 2003 and 1.8 million people would lose their health insurance due to its increased cost. Based on this report, the Chamber of Commerce (?) said it would recommend that its members stop providing insurance if Congress passed such a measure.

The report was not taken very seriously since it was generated by the industry and garnered reactions such as: 'The HMO industry would produce a study showing the Ten Commandments increased healthcare costs if they felt 'Thou shall not kill' ever jeopardised their profit margins.'

In May and June all the news media ran stories about how important the managed care issue was going to be in the November elections and how well organised the opposing forces were.

These stories served to put pressure on the Republicans to do something about managed care, which was increasingly seen as the Democrats' issue.

By the end of June the Republicans had introduced their own managed care bill, similar in some respects to the Democrats' but generally weaker.

Millions of dollars were spent by both sides on full-page ads in newspapers and on television and radio commercials. TV viewers could hear how allowing people to sue their plan would drive up the cost of healthcare and make money for lawyers, and then turn over to hear how greedy health insurance companies didn't want to pay up when they injured you.

But there was also the beginning of a sense that nothing at all might happen.

Robert Novak, the conservative columnist, said on a talk show on 12 July: 'This is the last thing the Democrats have for this campaign. The tobacco thing isn't playing, campaign reform, finance reform, who cares about that? This is the last thing. And this is not going to be a big issue either.'

A Gallop poll found that while 40 per cent of Americans thought the healthcare system was in crisis, most (7 out of 8) were happy with the care they received from their plans and two-thirds of managed care members would recommend their plan to someone else.

On 11 August, President Clinton promised to veto the Republican bill because it would not allow for the lawsuits. This was a week before his grand jury testimony about Monica Lewinsky.

On 31 August, National Public Radio reported that it was likely that no managed care reform would be passed this year due to the limited amount of time before Congress was due to recess (the end of September), the large number of appropriations bill that had to be passed so that government would not shut down again, and President Clinton's problems.

A Republican pollster, Bill McInturff, said: 'The Democrats were, as a party, trying to make this election about HMOs, tobacco, and social security. Now guess what three things we never heard about in the last three weeks - those issues. The president's scandal has sucked up all the available oxygen for every political story.'

It was also noted that the issue of managed care reform would not go away and that if this Congress did not deal with it, the next one would.

The issue will not go away, even if President Clinton does. Managed care will be subject to governmental reform.