Healthcare Reform
Political football
The right to sue may be tossed around for the next year.
Were it not for the absence of horns, streamers and ugly foam hats, the jovial press conference that followed last week’s vote by the House of Representatives to pass the so-called Patients’ Bill of Rights could have easily been mistaken for a campaign victory party. But while the vote may have sent a significant message to the managed-care industry, consumer advocates haven’t won anything yet.
With Senate Republican leaders opposing many of the provisions in the House bill, and House Democrats eager to use the Patients’ Bill of Rights as a political football in the upcoming election year, nobody in Congress is dying to send the legislation to President Clinton any time soon. According to some congressional staffers, the very same public outcry that made the managed-care legislation a reality may make it more valuable to its own supporters as an “issue” than as a piece of signed legislation.
And when the Senate and House do sit down to draft a joint bill — something that almost certainly will not happen until next year — patient advocates fear that many of the more meaty patient protections included in the House bill will fall victim to the same political infighting that has marked the entire managed-care debate thus far.
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The HMO industry gained strength through the early part of this decade, credited with decreasing the runaway medical inflation rates that threatened to hamstring the nation’s economy in the 1980s. From a purely economic standpoint, managed-care plans had brought physicians and hospitals in line, reducing the number of expensive, superfluous medical tests and treatments and drastically shortening the length of most hospitalizations.
But as HMO membership roles swelled and the number of employers offering traditional indemnity insurance options dwindled, disturbing reports surfaced about how HMOs did business. Because HMOs accepted full “risk” for their members’ medical expenses in exchange for a flat, per member, per month premium, they had a de facto financial incentive to pay for only those procedures that they deemed medically necessary.
Enter the managed-care “horror story.” Like gory urban myths but with better corroboration, scattered media reports about HMO abuses appealed to the public’s most primal fears. What stories about the injustices of managed-care companies lacked in numbers, they made up for in sheer lurid detail. Tales of patients dying for want of experimental medical treatments, children horribly disfigured through callous administrative oversights and cancer victims fatally misdiagnosed as a result of miserly testing practices became regular staples of magazines and weekly news programs.
Compounding the understandable public outrage over widely reported managed-care abuses was a loophole in federal law that made it exceedingly difficult for patients to sue their HMOs. Protected by the Employee Retirement Income Security Act of 1974 (ERISA), managed-care companies operated with virtual impunity — answering only to their shareholders and to a handful of industry-funded accreditation bodies.
In 1996, feeling mounting pressure from the public and hoping to forestall legislative action, the managed-care industry’s largest trade group, the American Association of Health Plans (AAHP), unveiled a “Code of Conduct” for managed-care plans. While almost entirely unenforceable, the Code of Conduct called for managed-care plans to, among other things, provide patients with full and accurate information about their policies and procedures, offer internal appeals processes for patients who complained about coverage or treatment decisions and remove so-called gag rules barring certain physician-patient communications.
The Code of Conduct did little to ameliorate public concerns, but its proposed consumer protections did serve as a basis for the legislation that eventually came to be known as the Patients’ Bill of Rights.
Last week’s House vote was years in the making. Although the legislation went through many different incarnations and revisions, the bill that passed on Thursday represents, by far, the most sweeping federal action ever taken on the managed-care issue.
If signed into law as is, the House bill would force HMOs to disclose information about their operating policies, provide patients with broad access to medical specialists and remove many restrictions on name-brand prescription drugs and other therapies. But most important, say bill proponents, the House-approved legislation would amend ERISA to allow patients to sue managed-care plans that deny them access to care.
It is that “right-to-sue” provision that gives the 108-page bill its teeth and predictably has caused the most consternation in the managed-care industry and among Republican opponents of the legislation. Before passing the legislation, the House defeated three Republican-sponsored alternatives to the Patients’ Bill of Rights, all of which would have severely limited the rights of patients to sue their HMOs.
By allowing patients virtually free reign to sue their managed-care companies, the House bill will open the door to an economically debilitating legal maelstrom, industry opponents warn, adding that patients will bear the cost for the ensuing legal warfare once the bill is signed into law.
Large employers, who have been more strident than even the managed-care industry in opposing the reform legislation, say that a “right-to-sue” provision could force them to severely scale back their health-insurance offerings, leaving employees to foot the bill for many, if not all, of their own health-care expenses.
Since many of the nation’s largest companies — such as General Motors, IBM and Xerox — are “self-insured,” their legal exposures under the House bill would be easily as great as the exposures of the managed-care industry. A self-insured company may rely on an HMO or some other third party to manage the medical benefits it offers its employees, but the employer itself acts as the insurer, deciding what services to cover and accepting financial risk for its workers’ medical costs. In the case of self-insured companies, it is the employer, not the managed-care firm, that is on the hook for health-care decisions.
And this potential liability, say opponents of reforms, may cause a feeding frenzy. The Wall Street Journal reported recently that some of the nation’s top trial lawyers are turning their attention away from the tobacco industry and toward HMOs. That attention will probably mutate into salivating bloodlust if Congress lifts the ERISA protections that HMOs have relied on for years.
Still, without the right-to-sue provision, any managed-care legislation will have little real impact on patients’ rights. Consumer advocates warn that enforcement of the sundry consumer protections in the House legislation will be dicey, and its liability provisions represent the only real means that consumers have to hold HMOs’ feet to the fire.
Also, the House bill mandates the establishment of an external third-party review process. Under the proposed legislation, a consumer with a denial-of-care complaint would have to present that complaint to an outside review board before taking the matter to court. That provision will significantly reduce the incidence of frivolous and unmerited lawsuits, bill supporters say.
The AAHP supports third-party review, but believes the decisions of review boards should be binding.
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Of all the opponents of the “right-to-sue” provision, the two most important at this stage are Senate Majority Leader Trent Lott, R-Miss., and Assistant Majority Leader Don Nickles, R-Okla. The two senators hold great sway over the conference process — wherein a joint Senate and House bill is drafted and sent to the president — and are dead-set against many of the provisions in the House bill.
The Senate passed its own watered-down managed-care reform legislation earlier this year. That bill is narrower than the House bill in scope, contains fewer binding consumer protections and does not include a right-to-sue provision.
Complicating matters further is the fact that it may not be politically savvy for congressional Democrats to try to speed up the conference process. In lieu of a Bible, many House Dems may be pounding a copy of the still-unsigned Patients’ Bill of Rights when election time rolls around next year. Senate Republican leaders, meantime, will be happy to let the legislation stagnate — putting off a decision on the bill until some of the public furor over the managed-care issue dies down.
While the House bill’s co-sponsors, Reps. Charlie Norwood, R-Ga., and John Dingell, D-Mich., seem genuinely interested in passing the legislation for reasons other than politics, and will no doubt crusade valiantly to win over their colleagues in the Senate, their valor may not be enough to preserve the core protections contained in the House bill.
When members of the two houses are sitting across from one another at the bargaining table, the contentious right-to-sue provision — the proverbial “teeth” of the House bill — may end up being sacrificed on the altar of political expediency.
David McGuire is a reporter in Washington. More David McGuire.
Romney pal defends Obamacare
Sen. Roy Blunt supports part of the bill his ally Mitt Romney has pledged to fully repeal
(Credit: Reuters/ Jonathan Ernst) Sen. Roy Blunt, R-Mo., gave a strong defense yesterday of a portion of the Affordable Care Act that allows children up to 26 years old to remain on their parents’ health insurance plans, breaking a bit from the GOP’s hard-line opposition to Obamacare.
Blunt endorsed Mitt Romney early on and led the campaign’s efforts to recruit Republican lawmakers during the GOP primary. But his comments in an interview on KTRS radio in St. Louis may give Boston some heartburn as it tries to convince conservative voters that Romney, who enacted the predecessor of Obamacare in Massachusetts, will actually repeal the healthcare law.
Continue Reading CloseAlex Seitz-Wald is Salon's political reporter. Email him at aseitz-wald@salon.com, and follow him on Twitter @aseitzwald. More Alex Seitz-Wald.
“Birth control doesn’t matter”
A new survey reveals just how ignorant young people are about contraception and pregnancy
(Credit: restyler via Shutterstock) When it comes to sex and reproduction, even the most mind-numbingly intuitive conclusions can be politicized or disbelieved. So they bear repeating and resubstantiation. Take this recent Guttmacher study on contraceptive knowledge. Surveying 1,800 men and women ages 18–29, the authors “found that the lower the level of contraceptive knowledge among young women, the greater the likelihood that they expected to have unprotected sex in the next three months, behavior that puts them at risk for an unplanned pregnancy.” In other words, access to factual information helps prevent risky behavior.
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Irin Carmon is a staff writer for Salon. Follow her on Twitter at @irincarmon or email her at icarmon@salon.com. More Irin Carmon.
Healthcare’s foreign invasion
Obama risked a trade war with China about manufacturing -- so why isn't he outraged about medical jobs?
(Credit: gualtiero boffi via Shutterstock/Salon) Approximately 15 percent of all healthcare workers and 25 percent of all physicians in the United States were born and educated elsewhere. This means that 1.5 million healthcare jobs are “insourced,” occupied by foreign-born, foreign-trained workers brought into the United States on special visas earmarked for healthcare jobs. This number is 50 percent greater than the total number of jobs in the U.S. auto-manufacturing industry. It’s amazing to consider that in 2008 and 2009, the auto industry, which makes up just 3.6 percent of the U.S. economy, received a $97 billion bailout. If we estimate that each of these 1.5 million insourced healthcare jobs has an average wage of $60,000, that’s $90 billion a year in wages going to people brought into the United States to work rather than training Americans to do the same jobs.
Continue Reading CloseDr. Kate Tulenko is a physician with degrees from Harvard University, Cambridge University and the Johns Hopkins School of Medicine. The former coordinator of the World Bank's Africa Health Workforce Program, she currently serves as director of clinical services for a global health nonprofit. More Kate Tulenko.
Obama destroys Constitution with mild Supreme Court criticism
Conservatives and moderates declare SCOTUS-bashing to be "intimidation"
(Credit: AP) Ruth Marcus is unsettled. Maybe even queasy. There is probably some light nausea. What has her worried for the future of the nation, today? President Obama’s shameful, horrific, vicious attacks on those nice people in the Supreme Court.
Obama said that the court overturning Congress’ healthcare reform law would be a textbook example of “judicial activism” as “conservative commentators” define it: “that an unelected group of people would somehow overturn a duly constituted and passed law.” And hey, that seems like an eminently defensible and not particularly unsettling point! Conservatives made “judicial activism” into a talking point and rallying cry and defined it vaguely enough to encompass judges striking down basically any law or statute.
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Alex Pareene writes about politics for Salon and is the author of "The Rude Guide to Mitt." Email him at apareene@salon.com and follow him on Twitter @pareene More Alex Pareene.
My son’s healthcare battle
My 14-year-old has brain cancer. Without Obamacare, he would have already exceeded his lifetime insurance limit
Supporters of healthcare reform rally in front of the Supreme Court on the final day of arguments regarding the healthcare law signed by President Obama on March 28, 2012. (Credit: AP Photo/Charles Dharapak) Mason is my 14-year-old son, who is adorable and funny, and happens to have a very stubborn and large brain tumor. We discovered the tumor four years ago, and we have been monitoring and treating it with the help of some of the finest doctors around. Mason has lived a somewhat “normal” life, despite frequent MRIs and even chemotherapy. He did his homework and hung out with friends until the fall of 2010 when his headaches became debilitating. Scans revealed that Mason’s tumor had grown for the first time since we had discovered it. Then days before we were scheduled to meet with the neurosurgeon to discuss a surgery we had tried to avoid, Mason had a massive cerebral hemorrhage.
Continue Reading CloseJanine is a San Francisco Bay Area writer. She is currently working on a collection of essays about surviving her son's brain tumor and the odd reality that comes with a diagnosis of childhood cancer. More Janine Urbaniak.
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