Editorial: Posturing threatens HMO bill

Wednesday, July 14, 1999 | 9:37 a.m.

This week the U.S. Senate is debating a patient's bill of rights, but if the past two years are any guide, the likelihood that genuine reform will be enacted into law is remote at best. Democrats and Republicans each call their legislation a "patient's bill of rights" -- but that's where the similarities end. The Democratic version is comprehensive and offers patients the protection they need against abuses by health insurers, while the Republican proposal is timid and business as usual.

Before the widespread introduction of managed care, a good case could be made that the pendulum had swung too far in the direction of the patient, sometimes resulting in medical testing and treatments that weren't necessary. Managed care offered a promising alternative to the traditional fee-for-service care, reducing costs and also providing better treatment through an emphasis on preventive care. For a brief period managed care did offer excellent benefits, but soon HMOs started squeezing doctors, emphasizing profits over patients. Today patients frequently find they have to fight their own insurer to get needed care, coverage that they or their employers are paying hefty premiums to receive.

Since 1997 Democrats have been advocating their patient's bill of rights, but each time their proposals have been defeated by the GOP leadership in both houses. The Senate Democrats' version is superior to the Republican plan. For starters, the Democratic reforms would cover all 161 million Americans who have private health insurance. In contrast, the Republican plan primarily would cover just 48 million Americans, those who work for large employers that run self-funded plans exempt from state regulation.

In another key area, the Democratic plan would prohibit insurers from interfering in the decisions made by doctors, creating a definition of "medical necessity" so HMOs couldn't overturn the reasonable decisions of doctors. The Republican proposal doesn't offer this protection, instead leaving in place the power of insurers to overturn the sound medical care provided by physicians. In addition, while the Republican plan would permit appeals of an insurer's decision, the insurer would be allowed to select the individual or company handling the appeal. This is hardly fair to the patient and is an inherent conflict of interest. The Democrats' plan, meanwhile, would establish independent review boards to address appeals.

Finally, the Democrats would allow patients to sue for actual and punitive damages if they were harmed by an HMO's decision to deny treatment, a legal remedy currently prohibited. Insurers vehemently oppose this move, but why should they and foreign diplomats be the only ones in this nation immune from lawsuits? This is a critical component of the Democratic legislation, but this is an area where some compromise could be considered. Republicans have legitimate concerns that huge punitive damage awards have the potential to increase health care costs. While this isn't reason enough to deny the right to sue -- after all, if cost was an issue, every industry would be in line seeking to end punitive damages because of the ultimate cost to the consumer -- Democrats could make an accommodation and agree to a reasonable cap on the amount of punitive damages tha t could be awarded.

Senate Minority Leader Tom Daschle, D-S.D., accurately characterizes the Republican proposal as a "placebo, not a plan." For two years the GOP leadership has played games with this issue, derailing any possibility for reforms. Until the end of June the GOP leadership refused to consider the patient's bill of rights. Only after Democrats tied up votes for a week on agriculture spending bills were they able to get the attention of Republicans, who finally promised a debate this week.

The Senate prides itself as being the world's greatest deliberative body. When the Senate recently tackled gun control legislation it showed it could take a controversial issue and make the necessary compromises to pass legislation that benefits the public. Another opportunity presents itself for the Senate, which is expected to take a final vote on HMO reform this Thursday. But with the 2000 elections looming, both political parties have hardened their positions. This intransigence doesn't bode well for Americans, who will continue to be at the mercy of their health insurers if the Democrats and Republicans fail to reach common ground on HMO reform.