In October 1994, after President Bill Clinton's five-pound Health Security Act had been declared dead, Secretary of Health and Human Services Donna Shalala invoked Mark Twain on the pages of The Washington Post, writing, "Like Twain's demise, the death of health care reform has been greatly exaggerated."
Unfortunately, Shalala was right. They're ba-ack!
In 1993, the proclaimed health care crisis was one of "access," and it was reportedly driven by spiraling insurance prices. The solution to that crisis was "universal coverage" via a federally run system of managed care. Now, after a period of price stability, the announced crisis is one of "quality." The solution this time: "minimum standards," which is code for a federally regulated system of managed care.
In September 1996, Clinton created the President's Advisory Commission on Consumer Protection and Quality in the Health Care Industry to advise him "on changes occurring in the health care system and, where appropriate, to make recommendations on how best to promote and assure consumer protection and health care quality." Co-chaired by Shalala, the commission delivered its first report, The Consumer Bill of Rights and Responsibilities, in November.
Meanwhile, on the Hill, Republicans led by Alfonse D'Amato (R-N.Y.) in the Senate and Charles Norwood (R-Ga.) in the House are pushing the Patient Access to Responsible Care Act (PARCA). Norwood has amassed 210 co-sponsors--including 90 Republicans. So similar is the thinking at both ends of Pennsylvania Avenue that, on release of the commission's Consumer Bill of Rights, Norwood chided Clinton for his dilatory approach. "The time for talks and studies is over," claimed the Georgia Republican in a statement issued to the press. "We already have the legislation that will correct the managed care problems the Presidential Commission is finally addressing."
Let's examine these proposals.
Both PARCA and the commission's Bill of Rights exemplify a familiar bureaucrats-know-best mentality--a view that insists life's trade-offs should be made not by individuals weighing marketplace alternatives but by "experts" studying each other's white papers. In a startling admission, the commission notes that its recommendations "may create additional costs" and "that ultimately consumers bear these costs in the form of lower wages, higher prices, higher taxes or reduced benefits in other areas." But it then proclaims that "the Commission has attempted to weigh these factors carefully," even while admitting it never tried to estimate either costs or benefits--much less acknowledge that they might vary from person to person.
Both proposals also purport to ensure a minimum level of quality, secured by federal mandates in such areas as choice of provider, access to emergency services, and complaints and appeals. In each of these areas, one theme is consistent: It is a dangerous thing for markets to evolve without the express written consent of the federal government. The problem, you see, is not so much a lack of safeguards for consumers, but that these standards are emerging from the managed care marketplace and haven't been dictated by Washington.
Consider the push for "network adequacy." "Consumers have the right to a choice of health care providers that is sufficient to ensure access to appropriate high-quality health care," the commission boldly writes. To ensure this "right," the commission wants the federal government to mandate network standards established by the National Association of Insurance Commissioners.
PARCA backers share this concern. They want the government to dictate the "number, mix, and distribution of health professionals" an insurer must maintain. That consumers and corporate benefit buyers might be able to weigh the quality of a network against the price of the product on their own seems not to occur to the Washington players.
The same mentality is center stage in the commission's chapter on complaints and appeals. The commission notes that "[v]irtually all private and public health plans provide consumers with some form of complaint resolution process." So what's the problem? These processes are neither uniform nor approved by the federal government. The commission proposes a solution: an external review board.
At the other end of Pennsylvania Avenue, the proposed regulations are couched as "due process," for both enrollees and providers. Patients, it turns out, have a "due process" right to have a licensed doctor conduct utilization review, the procedure managed care companies use to approve medical procedures. Doctors have "due process" rights to apply for a job each year at every HMO and to have their applications reviewed, regardless of whether there are any openings.
Other calls for federal mandates in the Consumer Bill of Rights include "access to qualified specialists for women's health services," for "culturally competent" care, and for language translation. PARCA would force insurers to maintain a "quality improvement program" and disclose to enrollees the portion of each premium dollar that goes to marketing.
Then there's the wild card: the call for nondiscrimination. PARCA states, "No insurance issuer may discriminate...in any activity that has the effect of discriminating against an individual on the basis of race, national origin, gender, language, socioeconomic status, age, disability, health status or anticipated need for health services." The commission's recommendations contain similar language.
At best, this is merely politically correct pablum that will lead to disparate-impact suits. More likely, it is a Trojan horse for two policies that would destroy the market for private health insurance: guaranteed issue (if a plan is open to one it must be open to all), and community rating of premiums (old and young, sick and healthy pay the same premiums).