RIGHT-TO-SUE: Texas ‘Case Study’ Shows Few Effects
Two years after becoming the first state to allow patients to sue their HMOs, Texas has seen only five lawsuits filed and no unusual rise in medical costs -- findings that "provid[e] a glimmer of evidence ... of what would happen if Congress adopts such a law," today's Washington Post reports. Texas' managed care law passed in the spring of 1997 with support from both political parties but was opposed by health insurance industry representatives, who argued that the law would "force them to practice an expensive brand of defensive medicine" in order to avoid the threat of litigation. But that "just did not transpire," said state Sen. David Sibley (R), the law's main champion in the legislature. Cost information filed by the HMOs shows "no unusual increases in the amount that plans spend on medical and hospital services." Nor are the Texas Association of Health Plans, the American Association of Health Plans and the Health Insurance Association of America able to identify Texas insurers that have been forced to raise prices or provide extra services because of the law. Only one insurer has publicly complained about the law since its passage: the Scott & White health plan, which circulated a letter last year indicating that the law was forcing its premiums up 15%. But Deny Radefeld, the plan's executive director until last month, told the Post that "the premium hike was caused partly by other factors, including the soaring price of prescription drugs."
"Health care officials, politicians and policy experts disagree over why the Texas law's effects have not been more pronounced so far," the Post reports. Some attribute the lack of litigation to a grievance system established by the legislation, which works to resolve patient complaints before suits can be filed. The system has ruled on about 600 cases in the last two years, finding in the patient's favor roughly half the time. Others say that, despite the lack of evidence, they "have an intuitive sense" that HMOs have become more lenient. One internist, for example, told the Post that an HMO that initially refused to cover costs for a patient's overnight sleep apnea study relented after the physician said he worked in Texas. HMO officials warn that premiums will inevitably rise if patients win major settlements or jury awards.
Not Safe Yet
But the five suits that have been filed remain in the early stages and their effects have therefore not been felt. "I wince when I hear, 'There is no effect in Texas,'" said Jeff Kloster, attorney general of the Texas Association of Health Plans. "It ain't here yet. It's coming." Finally, some caution that Texas' experience may not be applicable nationwide, as some bills currently under consideration in the House would permit more suits and larger awards than the Texas law. So far, the Post adds, the state's outcomes "have made little impression" on the congressional debate. "It's very premature to make predictions based on what is happening in Texas," said Rep. John Boehner (R-OH) (Goldstein, 9/28).