MANAGED CARE REFORM: HMO Group Releases Cost-Impact Data

      In an effort to "pressure key lawmakers to think about the unintended costs of federal regulation," the American Association of Health Plans yesterday released estimates of what impact a 10% rise in health care costs would have on Louisiana's economy, the New Orleans Times-Picayune reports. According to the AAHP projections, a 10% increase in health care costs would cause 40,000 Louisianans to "lose their coverage in the next five years and 4,000 workers [to] lose their jobs." In addition, the group predicts that "worker premiums would rise $275 a year." AAHP spokesperson John Murray said, "The private market has done a tremendous job at reining in costs. Now the debate is how do we find balance of quality and affordability." Tulane University School of Public Health and Tropical Medicine's Ken Thorpe noted that studies estimating the impact of federal health mandates may not be accurate. He said "many of the mandates being considered already are being offered in many plans so that estimates of costs might be exaggerated." Thorpe said, "They aren't universally in place, but people do it. The market is somewhat responding. I'm not convinced that has much of a cost at all" (Walsh, 3/18). The Louisiana estimates were made for AAHP by KPMG Peat Marwick's Barents Group (AAHP release, 3/18).

First In A Series
      The Louisiana projections are the first in a series of cost-impact analyses the managed care industry group and the Coalition for Quality Patient Care plan to release nationwide, according to AAHP's Phil Blando. In the next few weeks, the group will release similar findings about Tulsa, San Diego, Cincinnati, Chicago, Atlanta and other cities (American Health Line interview, 3/19).

Capitol Hill Update
      Rep. Benjamin Cardin (D-MD) introduced legislation Tuesday that would give "[p]atients whose private insurers refuse to pay health care costs ... the right to appeal to an outside panel." The Baltimore Sun notes that Cardin's proposal "resembles legislation promoted in the Senate" by Sens. Joseph Lieberman (D-CT) and James Jeffords (R-VT) (Folkenflik, 3/18). Yesterday's CongressDaily/A.M. reported that Sen. Alfonse D'Amato (R-NY) has said "there is 'a good chance' he will kick off the first floor debate of the year over managed care regulation by offering his bill to ban so-called drive-through mastectomies ... as an amendment to" an education bill pending in the Senate. D'Amato "said he wanted to offer the more limited measure to test Senate sentiment on the issue of managed care regulation." He said, "If we can't get this, then we are going to have an impossible task getting more reforms." D'Amato is the Senate sponsor of the Patient Access to Responsible Care Act (PARCA), a comprehensive managed care regulatory bill originally introduced by Rep. Charlie Norwood (R-GA) (Rovner, 3/18).

The Only Answer?
      An editorial in yesterday's Charleston Gazette states that if managed care reforms "force HMOs to provide more expensive treatment for member families, the financial savings achieved by managed care may vanish. And with or without the changes, 40 million modest-income Americans still will have no health insurance at all." The editorial continues: "As we've said before, the only real cure for America's sky-high medical costs is a Canada-style, universal, 'single-payer' insurance system that gives complete care to every citizen. By covering everyone, it would have power to set lower fees for hospitals, doctors, dentists, optometrists, therapists, etc. And it would save the millions now going into profits for private insurers" (3/18).