MANAGED CARE REFORM: Debate Over Costs Continues
HMO reform promises to give patients "greater access to emergency room care and specialist referrals, the right to appeal treatment denials to independent panels and expanded information on insurers' contracts with physicians." It would allow "patients to visit doctors outside their HMO networks," and some proposals "would let patients sue their health plans for medical malpractice" -- all at an estimated 1% increase in cost, according to pro-reform groups. But other estimates say these reforms would result in increases of premiums "more than 23% per year," causing "millions" to lose their coverage. Today's Dallas Morning News reports that the debate over costs has congressional leaders confused as they prepare to take up managed care reform this summer. "The only thing that can be said with certainty is that there is huge uncertainty surrounding these type of cost estimates," said Robert Reischauer, senior fellow at the Brookings Institution and former director of the Congressional Budget Office.
The Dallas Morning News notes that experts warn against using current cost estimates to come to any conclusion about HMO reforms, since the studies to date are "largely flawed." These flaws are due to divergent interpretations of legislative proposals and "because the studies are financed by parties interested in the debate's outcome." Reischauer said, "In almost all of these proposals, if you change a comma, you eliminate two or three words, you interpret something a little bit differently, and you end up with a wildly different estimate of the cost. Some of these estimates quite obviously are ammunition in a battle." For example, one report puts the cost of mandated emergency room coverage at "60 cents per member per month. Another predicts costs would rise 13 cents per month. A third says the regulation would cost nothing." Experts are waiting for results from the most reliable source -- the Congressional Budget Office -- which has not released its report yet.
To Reform Or Not To Reform
The Dallas Morning News reports that employers and HMO officials opposed to reforms say the managed care system "has reduced waste, slashed costs and placed a new focus on preventive care, such as immunizations and cancer screenings, for more than 150 million Americans." Dan Danner, chair of the Health Benefits Coalition, "which has launched a $1 million advertising campaign against the legislative proposals," said HMO reforms would lead to "a significant increase in costs." A study conducted by the health care consulting firm Milliman and Robertson on behalf of groups opposed to reform found that "HMO premiums will increase 23% if the leading congressional proposal passes," and for "every percentage point that costs jump, 400,000 people will lose coverage." But critics of the managed care industry point to a Kaiser Family Foundation study which "suggests that premiums will increase less than 1%." Larry Levitt, director of the Kaiser Family Foundation's project on the Changing Health Care Marketplace, said, "[O]ur study shows that many [reforms] can be done for pennies per person."
The Dallas Morning News reports that public support for reform is also unclear. GOP polls show "86% of Americans support HMO reforms. Two-thirds of those surveyed would still support the proposals if they raised premiums $200 per year, or about $17 per month," while a Kaiser survey "showed only 33% of respondents support a 'patient bill of rights' if it would increase premiums" (Ornstein, 5/26).