New Hope for HMO Patients Who Have Precious Little

For a growing number of Californians--17 million at last count--health care has become virtually synonymous with managed care, the medical system dominated by the powerful health maintenance organizations. Many state legislators, however, are troubled by the notion that managed care providers have the final say on how health care is to be administered. In the past year, they have introduced dozens of reform bills, nearly all of which have been defeated after lobbyists successfully cast them as harmful to doctors, lawyers, patients, HMOs or some other special interest.

One of the survivors is AB 1663, the Friedman/Knowles Experimental Treatment Act. Scheduled to come up for a key vote in the Assembly by week’s end, the bill stands a relatively good chance of passage, largely because it has won the support of two powerful lobbying groups that are usually at odds--the California Medical Assn. and a coalition of HMOs led by PacifiCare, Kaiser and Health Net. The bill offers reforms that deserve to be implemented.

Most patients in managed care plans who are diagnosed as terminally ill but denied coverage for an experimental treatment have only two choices: pay for the treatment themselves or sue their insurer, a process that may well take more time than they have left.

This bill would provide a third option, appeal to a panel of medical experts picked by a state-accredited review agency.

Neither the agency nor the experts could have a financial or medical relationship with the health plan or patient or any interest in the proposed therapy. If the panel decided that an experimental treatment would be more beneficial than standard therapies, the plan would be required to cover it.

The HMOs are gambling, wisely, that the bill would spare them the fiscal and public relations setbacks caused by treatment denials.

In a widely reported 1993 case, Health Net denied a potentially lifesaving but expensive ($100,000) bone marrow treatment to a Riverside woman with breast cancer, while approving one for another woman who happened to be a Health Net employee. The Riverside woman’s survivors were awarded $89 million, apparently because the jury wanted to punish the HMO for what some viewed as the arbitrary nature of its decision.

AB 1663 is not perfect. It would, for instance, let patients appeal denial of experimental therapy only if the treating physician had recommended that therapy. Some plans, however, have “gag rules” and financial disincentives that discourage doctors from disclosing treatments not covered by that insurer. Bills to outlaw gag rules are moving through the Legislature, and two initiatives to do the same will be on the November ballot.

In the meantime, this measure takes a necessary first step toward ensuring that medical decisions are guided more by the Hippocratic Oath than by the bottom line.