WHAT LIMITS should be imposed on managed care companies in their pursuit of lower health care costs? The House is scheduled to take up the difficult question this week. Our sense is that none of the alternatives now before it represents the right solution.
The Republican leadership continues to play a game with the issue. It seeks, on behalf of the business and insurance groups opposed to regulation, a bill to create the appearance of constraint without the content. But those on the other side -- most Democrats and some Republicans -- seem to us to be making an opposite mistake. They are too blithe about the likely consequences of allowing even more health care decisions to be made in the courts.
The new Census Bureau report on the uninsured suggests what is at stake. In a strong economy, the number of uninsured increased by about another million people last year; it stands at one American in six. The cost of care is the main reason, and for better or worse, managed care is the main instrument in the society for containing costs.
Those who favor regulating the industry do so in the name of preserving access to care for those it insures. But to regulate in such a way as to weaken cost containment and price more people out of the market would likewise have the effect of reducing access, just for different folks. The need is for greater balance than an increasingly partisan debate such as this may allow -- to legitimize managed care by keeping it within acceptable bounds without crippling it.
Most of the provisions in the bills that will be before the House involve fairly standard consumer protections -- full disclosure of costs and benefits, having enough doctors and other resources to provide the promised services, not gagging doctors lest they mention costly courses of treatment, etc. The main issue is no longer those, but what to do when care or reimbursement is denied and a patient objects. All the bills now provide for both internal and external appeal of such decisions, though what they mean by that varies. The main bill and one of the others would go further and make it easier for aggrieved patients to take health care plans to court, including for damages.
Our instinct would be to try an appeals system first, and broaden access to the courts only if the appeals process turned out after a number of years not to work. That requires that the appeals system be strong, not the crabbed one that some business groups are backing. In the name of increasing access to care, Republicans also seem bent on adding some poison pills to the bill, in the form of proposals that would make it easier for healthier people who could afford the risk to opt out of the broader insurance pool. But the effect would be to drive up costs for those most in need of coverage, who would be left, thereby in the end reducing access. A more immediate effect might be to stimulate Democrats who would otherwise support the underlying bill to vote no. This legislation is complicated enough; they should save the party favors for another occasion.