HMO Reform’s Blame Game

The vicious cycle blocking HMO reform in Congress--Democrats proposing mandates that Republicans dismiss as too meddlesome--seemed near an end last week. A Republican health care task force endorsed a set of managed care reforms even more far-reaching than the Democrats’ proposed Patient Bill of Rights.

But don’t expect reform of health maintenance organizations just yet. For despite the clear agreement among rank-and-file members of Congress, leaders in both parties continue to try to wangle partisan advantage out of HMO reform by highlighting divisive issues rather than focusing on reforms that all agree are long overdue.

Predictable political alliances are shifting because as managed care covers ever more Americans (now 85% of all those employed), elected officials in both parties are hearing intimate details of their failures. As an article in today’s edition of the New England Journal of Medicine puts it, market pressures “may compel all HMOs to adopt practices that compromise medical ethics and patient care.” And legislators are realizing, as Rep. Michael P. Forbes (R-N.Y.) puts it, “This is an issue we will ignore at our peril, come November.”

President Clinton, who will focus on HMO reform in a speech today to the American Nurses Assn., should discourage partisan posturing. He is expected to speak about the Democrats’ bill, but he would perform a greater service by cheering on the surprising bipartisan support for several basic reforms. These would guarantee payment for emergency room services provided in situations that a “prudent layperson” would deem worthy of medical attention; allow patients to appeal denials of coverage to an independent reviewer; eliminate “gag rules” that forbid doctors to disclose all treatment options to patients, and require health plans to disclose how they decide which treatments will be covered.

These reforms wouldn’t send premiums soaring. An April report by the Kaiser Family Foundation predicted premium increases of only 0.61% if the Patient Bill of Rights passes and only 0.77% if the Republican reforms pass. The Congressional Budget Office is expected to issue similar findings soon. Other reforms being discussed in Congress, however, could cost more. One bill would require plans to pay for experimental treatments that cost millions but have only infinitesimal rates of success.

Arguably insurers and health care providers are at least partly to blame for their own predicament. After all, they set the tone of the debate when they helped kill President Clinton’s 1994 health care plan with their TV ads: A man named Harry would express horror to his wife, Louise, that the administration’s plan would choose not to cover some inessential kinds of care; “They choose,” said Harry; “We lose,” scoffed Louise. But someone always chooses, and keeping the lid on is how HMOs stay in operation.

The key challenge for Congress and President Clinton is to transcend blame, avoiding the posturing on both sides that torpedoed Clinton’s first-term efforts at reform. If lawmakers keep their ears open to the people who elect them, Congress could still pass a bill guaranteeing the basic medical rights to which consumers should be entitled.