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Gingrich Calls for Investigation of Managed Care : Health: House Speaker makes unexpected proposal for congressional hearings into booming industry. Idea draws cheers from doctors, concern from insurers.

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TIMES STAFF WRITER

House Speaker Newt Gingrich (R-Ga.) on Tuesday called for an unprecedented congressional investigation of the managed-care industry, the fastest-growing and perhaps most controversial sector of the nation’s health care system.

Gingrich’s unexpected call for hearings on a health care delivery system that now covers about 63% of all privately insured Americans was cheered by doctors, who are increasingly coming under the control of managed-care networks. But the Speaker’s remarks stunned the health insurance industry, which is the dominant force behind the operation of managed-care plans.

A public investigation of the managed-care industry and its practices by a GOP-controlled Congress may seem to fly in the face of the current Republican drive to broadly reduce the role of the federal government.

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But Gingrich’s implicit criticism of managed care in fact reflects the GOP’s mixed feelings toward the industry and its reliance on “gatekeeper” physicians, a practice that limits consumer choice of medical providers.

On one hand, those intent on reducing the federal budget deficit are increasingly eyeing managed care as a way to cut costs--not only in the private sector but also in the government’s Medicare and Medicaid programs.

On the other hand, however, managed care is coming under mounting criticism for being dominated by bean counters more concerned with the bottom line than with the quality of individual patient care.

“Newt is a little schizophrenic on this,” said one top GOP staffer. “The Republicans as a whole are as well. They are real skittish about the lack of choice in managed care. But they also know they can’t solve the Medicare and Medicaid cost issue without getting more beneficiaries into managed care.”

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Gingrich’s call for congressional hearings, possibly as soon as May, came in answer to a question after his formal remarks at the American Medical Assn.’s annual national leadership conference.

“We need hearings on managed care because anytime you have an accumulation of power comparable to (that in) some of the communities in which managed care is now (and) has a very large penetration, you need to have some kind of government review of what are the procedures, what are the systems, what are the terms of employment, what are some of the conditions of secrecy, etcetera,” Gingrich said.

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“And I think that the country, both from a provider and from a patient’s standpoint, deserves to have hearings on managed care and to get all that out in the open and to have a better understanding,” he added.

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AMA officials who met privately with Gingrich later said that the Georgia Republican expressed concern about anecdotes in the news media about patients not receiving proper care.

“We’d very much favor hearings,” Dr. James S. Todd, the AMA’s executive vice president, said in an interview. “We believe in sunlight--not only on doctors but on the managers,” he added. “If we’re going to have a free marketplace, it also has to have a sense of responsibility.”

Congressional hearings on managed care would focus on a high-stakes struggle for dominance between physicians and managed-care networks, one that was waged over the past two years amid the larger national debate on comprehensive health care reform.

By the end of 1994, 63% of all privately insured Americans were enrolled in a managed-care plan, a term that encompasses health maintenance organizations, preferred provider networks and point-of-service plans, according to a recent survey by Foster Higgins, an international employee-benefits consulting firm. That was an 11% jump from 1993--the largest yearly increase in the nine-year history of the firm’s survey.

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One top managed-care official, asking to remain anonymous, was taken aback Tuesday when informed of Gingrich’s call for a congressional investigation of his industry.

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“I don’t understand where he’s going with this,” the official said. Later, he called back to add: “Managed care is growing by leaps and bounds because it’s providing good quality care at a reasonable price.”

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