MANAGED CARE REFORM: HMO Trade Group Warns Of Costly Consequences

      The American Association of Health Plans yesterday "warned that hundreds of thousands in the state would lose their jobs or health insurance if" managed care reform bills pending in Congress are passed. At a press conference, the group said "a 10% rise in insurance costs caused by proposed reforms would over five years cause 36,700 in the state to lose their jobs and 455,000 to lose their coverage," the San Diego Union-Tribune reports. AAHP officials defended their projections of a 10% cost hike, noting that "estimates are that reforms under consideration could increase health costs up to 39%." John Neal, who chairs the California Chamber of Commerce's Small Business Committee, said, "However well intentioned those politicians are about the purpose of new health care mandates, they need to know they only end up hurting the very people they are supposed to help." The AAHP contends that "voluntary changes by the industry could continue to improve patient satisfaction." The managed care industry group released similar findings last week in New Orleans.

Truth Or Haze?
      Los Angeles-based Consumers for Quality Care declared that the AAHP's findings amount to "scare tactics." Jamie Court, director of the group, said, "The congressional budget office said the pending federal legislation would increase costs by no more than a fraction of a percent." He said a "top end estimate" of a patients' bill of rights found that costs would go up "$1 billion per year," or 0.3% of total health care spending. Court further contended that "the costs of improving health care coverage would be partly offset by reducing the frequency of injuries and illness currently caused by managed care practices" (Rose, 3/24).