08/2001: The Pulse

Published August 1, 2001

Writing in Slate, Michael Kinsley argues on the one hand, the Patients’ Bill of Rights validates liberal ascendancy. He points out “that no major Republican is out there saying, ‘No. This violates my most basic free-market principles. Insurers should be free to offer any deal they want and consumers should be free to take it or leave it.'”

On the other hand, Kinsley writes, the PBOR is “liberalism ala mode,” using lawyers rather than “the hobnailed boot of big government” to expand benefits to those already well-off.
Source: http://www.slate.com, June 21.

A Good Deal for Patients?

Cal Thomas says in the Washington Times that his physician “thinks the politicians have duped people into believing (the PBOR) is a good deal. He thinks government intrusion into medicine has created many of the problems government wants to repair.” He concludes it is just another step towards HillaryCare.
http://www.washtimes.com, June 27.

In the Washington Post, Amy Goldstein writes, “the private marketplace has reacted more rapidly than the government.” She says private health plans have already reformed themselves to the point that, according to CIGNA’s Allen Schaffer, the PBOR “seems anachronistic—like an idea whose time has gone.” But she also quotes Wake Forest professor Mark Hall as saying the PBOR would create “a single clear uniform” standard for patient care.

Misguided and Dangerous?

NCPA research assistant Brad Lega has an op-ed in the Tallahassee Democrat that argues the whole notion of a patient “right” is misguided and dangerous, and that it will lead to state-controlled entitlement programs. He prefers “extending tax credits to individuals” and creating “a limited public safety net” for those who remain uninsured.

Health Insurance: Who Pays?

Linda Chavez points out in the Washington Times that even when employers write the checks for health insurance, it is really workers who pay the bill. Yet they have little say over what kind of coverage they get. Unfortunately, most Americans think it is free, so they have an unlimited demand for services.

“Medical Necessity” Questioned

On a more academic note, the Cato Institute has published a paper in its Regulation magazine on “The Futility of Medical Necessity.” Author E. Haavi Morreim, a professor of bioethics at the University of Tennessee, maintains the whole concept of “medical necessity” is flawed. It implies a level of precision that is impossible in health care, and can be defined in widely different ways depending on very subjective standards. Patients, therefore, do not know from moment to moment what is and is not covered under the terms of their contracts.

Morreim argues, “plans should jettison the notion of medical necessity and the vague promises of providing ‘all the care you need.’ Instead, plans should turn to guidelines-based contracting.”

Lawsuit Approach Questioned

Even more rigorous is a new study by RAND that takes an in-depth look at the consequences of legal remedies to enforce “fair and efficient resolution of complaints and appeals.”

RAND asks, “How Effective is the Legal System in Deterring Wrongful Practices?” and concludes: not very. Few of the people injured by medical negligence ever bring suit. The RAND report cites one study in Utah and Colorado that found only one-third of patients who were seriously injured ever filed a malpractice claim, and another by Harvard that found only 3 percent did. At the same time, RAND cites several studies that find “between half and two-thirds of claims are brought with no apparent indication of negligence.”

Even when appropriate claims are filed, RAND says the less serious claims are over-compensated and the more serious ones are under-compensated. RAND also points out that these are the results with physicians who make for sympathetic defendants. No such sympathy will deter juries when it is an insurance company being sued.

A wholly different perspective comes from the Acton Institute for the Study of Religion and Liberty. Gordon Johnson writes that since Christ said all men are free, “Congress should focus on revising our tax laws to grant patients the freedom to choose their own health care providers.” If they have the right to choose, “they will have less need to exercise their right to sue.”

Flexible Spending Accounts

Employee Benefit News ran a major article by Richard Quinn on allowing Flexible Spending Account (FSA) rollovers. He says, “all unused FSA amounts must be eligible for rollover from year to year and into retirement.” He disagrees there would be a substantial revenue loss from the rollover, and says the “real danger” is allowing FSA funds to be diverted away from health care expenses.

Quinn has never been very friendly towards MSAs, but he says, “unless we get the consumer into the process, health care costs will continue to spiral out of control.”
http://www.benefitnews.com, June 15

NFIB Names Fortis its Provider

The National Federation of Independent Business (NFIB) has announced that Fortis will be the exclusive provider of health insurance for NFIB’s HealthBenefits program. Fortis will provide MSA programs along with group and individual health insurance products, short-term medical and ancillary coverages including vision, dental, and prescription coverage.
Source: For more information, contact Carli Adams at 615/874-5252, email
[email protected], or go to http://www.nfib.org.

Employees Want Choice

Business Insurance reports on a Watson Wyatt survey that was presented to a recent AAHP meeting. The article says, “employees want more choices when selecting among health plans and many favor a ‘defined contribution’ payment system.” The article said 80 percent of employees surveyed agreed with or were neutral to the idea of a fixed-dollar contribution for health plan purchases, but a similar percentage still want some employer involvement, including negotiating price and performance standards, and facilitating enrollment and premium payment.
http://www.businessinsurance.com, June 25.

Private Sector Insurance Attacked

In predictable fashion, The Commonwealth Fund continues to roll out its series on how awful private health insurance is. The news release for one study is headlined, “Employer Policies Create Barriers to Health Insurance Coverage.” It lambastes employers for requiring eligibility waiting periods and for not providing full coverage to part-time employees.

The second misrepresentation tries to undercut the interest in individual tax credits by claiming the “individual health insurance market does not work well” for older adults. As always with Commonwealth studies, the spin in the press release is belied by the actual numbers in the study. For instance, the study reports that “nearly half (of the 1,523 people aged 50-64 surveyed) with individual coverage reported annual out-of-pocket premiums of at least $2,000. In contrast, only 16 percent of adults insured through their employer paid that much.”

Need I state the obvious?

People who pay for their own insurance pay more than people whose employers pay for the insurance. Duh!

If “nearly half” pay at least $2,000/year, then over half pay less than $2,000. Now that should be the headline: “Over Half of Older Adults in the Individual Market Pay Less than $2,000/year for Coverage!”

Greg Scandlen is senior fellow in health policy at the National Center for Policy Analysis located in Dallas, Texas. To sign up for his free weekly e-newsletter send an email to: [email protected]. Scandlen can be contacted at [email protected].