THE SENATE this week is scheduled to take up, at Democratic insistence, legislation to sand the rough edges off the business of managed care. It's a worthy goal that ought to be embraced by some of the groups that are resisting. For better or worse, managed care is now society's principal means of controlling health care costs. The continuing increase in such costs is everyone's problem. It burdens employers who pay insurance premiums, employees whose paychecks are less as a result, every level of government, which also pays -- and the rising share of the population for whom no one pays, who go without insurance because the price of health care has risen beyond their means.
The objective is, or ought to be, to legitimize the containment of these costs by giving the public a greater guarantee that the process will be fair. Republicans resist the increased regulation this would entail. In the past they have tried to deflect the bill; now they offer weak legislation that is mainly a shell.
The stronger Democratic bill is itself fairly modest. Much of it is ordinary consumer protection. Patients would have to be fully informed about the costs and limits of coverage, including any arrangements a plan might have with physicians or other providers that might give them an economic incentive to cut costs. No gag orders could be imposed on physicians to keep them from disclosing the range of possible treatment, without regard to cost. A plan would be required to have enough doctors to meet the likely needs of its enrollees. Patients could not be unfairly denied access to emergency care or specialists. Plans would be required to provide both internal and independent external review of cases in which care or reimbursement was denied and patients complained.
The Republican bill professes to provide many of the same protections, but the fine print often belies the claim. Among much else, it turns out to apply to only some plans, and to only about a fourth as many people as the Democratic bill would cover. The bill they will offer at week's end also may include some poison pills. A favorite in the past has been to broaden the subsidy for so-called medical savings accounts, which let healthy and better-off people opt out of the broader insurance pool to the detriment of the sick and less well-off who are left behind.
Critics say that the Democratic bill, by weakening the cost-containment industry, would drive up costs. Our contrary sense is that, in the long run, it would strengthen cost containment by requiring that it be done in a balanced way. The bill does, however, have two troublesome provisions. It rightly seeks to bar plans from saving money by denying medically necessary care. But part of its definition of such care implies that, when disputes arise between prescribing physicians and managed care companies, the presumption should be in the physician's favor. That's why the American Medical Association supports the bill.
The legislation ought to find a way of defining medical necessity that stays above this struggle. Likewise, the Democratic bill would make it easier for aggrieved patients to sue managed care companies that denied either care or reimbursement. Our preference would be to try a system of external appeals before subjecting an even greater share of medical practice to the vagaries of litigation. A bipartisan group of senators led by John Chafee of Rhode Island has a possible compromise on this issue.
Any bill such as this involves a balancing of risks -- higher cost vs. greater protection, whether Congress is the right body to be entrusted with a definition of medical necessity, etc. The risks tend to be exaggerated in debate. The managed care industry says that by and large it already does most of the modest amount this bill would require of it. If so, the added cost can hardly be as great as the critics contend. The stronger bill itself has a couple of rough spots that they ought to remove. Then they ought to pass it.