The Real Cure for H.M.O.'s
Knight-Ridder/Media Tribune Services, October 14 1998
Congress is adjourning without passing any legislation at all to regulate H.M.O’s, despite overwhelming public support for such oversight. The Senate, where insurance money talks loudly and carries a big stick, couldn’t even get a bill to the floor for debate. This is in spite of the fact that the House passed a bill last July that would have provided at least some guarantees for access to emergency medical care and medical specialists, as well as an appeal process for patients denied medical care.
The House bill had already been gutted by the insurance lobby, which insisted that patients be prevented from suing H.M.O.’s for damages resulting from the denial of needed medical care. But now that 61% of Americans get their health coverage from managed care organizations, there is a growing demand to manage the managers. By a margin of 58 to 17 percent, respondents to a New York Times poll in July said that HMO’s had impeded doctors’ ability to control treatment.
Insurance companies make their money by insuring the healthy and avoiding the sick, as much as they can. This can be seen most strikingly in their foray into Medicare coverage, which has now enrolled 17 percent of Medicare beneficiaries in managed care plans. A 1996 study found that these H.M.O.’s enrolled senior citizens who were much healthier, on average, than those in the rest of the Medicare program. Another study one year later in the New England Journal of Medicine found that patients who disenrolled from Medicare H.M.O.’s were far more likely than average to need expensive medical treatment.
When treatment cannot be avoided, it is in the interest of the H.M.O.’s to minimize it. So it will be a difficult task to regulate these organizations in a way that prevents them from doing what they were set up to do. It will also be expensive, adding another layer of administrative waste on top of the managed care bureaucracy.
A better idea would be to provide universal health insurance for everyone, with the government as insurer. We already have such a system for senior citizens: Medicare. Although its coverage is inadequate-- it does not cover long term care, prescription drugs, eyeglasses, hearing aids, dental care, or most preventive care-- it could easily be expanded.
We need to extend Medicare to cover everyone without regard to age, employment, or health status-- an improved Medicare for all. Why should people have to spend most of their income on health insurance simply because they happen to have a chronic illness?
If anyone thinks we cannot, as a nation, afford such coverage, they should look at the rest of the world. Every country that is anywhere near our income level provides universal, or nearly universal health care for its citizens. And they do it at a much lower cost than we do. The US is in a league of its own when it comes to health care costs: we spend 14% of our national income on health care, while the rest of the developed countries average about 8%. And yet we have 43.4 million people without health insurance-- and their numbers are growing rapidly. The ranks of the uninsured increased by 1.7 million people last year.
Seven years ago the General Accounting Office found that we could save so much money by switching to a single insurer system-- just by eliminating the administrative waste in our system of private insurance-- that the savings would be enough to provide health coverage for all of the uninsured. But we haven’t made the switch, largely due to the immensely powerful opposition of the insurance lobby. In fact we have been going in the opposite direction, by turning large parts of Medicare and Medicaid over to private H.M.O.’s.
In public opinion polls, Americans have consistently supported universal health care, and have even been willing to pay higher taxes in order to achieve it. Now that managed care has become the dominant form of health care coverage, people are beginning to see the irrationality of entrusting some of their most important health care decisions to someone whose primary interest is to maximize the profit of an H.M.O. We should not be surprised if universal health care is back on the political agenda before too long.