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PRESIDENT CLINTON: What this commission has done today with their health care consumer bill of rights is a truly extraordinary thing.
PHIL PONCE: President Clinton today fully endorsed a consumer bill of rights for health care, a proposal aimed at protecting consumers frustrated by a changing health care system. It’s the result of work by a presidentially-appointed advisory commission on managed health care and quality issues. The 34-member panel included representatives of insurance companies, consumers, physicians, and employers. For most Americans the switch to health maintenance organizations and other forms of managed care has come as employers try to control rising costs. Today about 3/4 of all Americans with health insurance are in managed care plans. In these plans a consumer pays less for seeing doctors and using hospitals affiliated with a particular program and providers agree to accept smaller fees in exchange for a guaranteed number of patients. Four years ago President Clinton tried to overhaul the nation’s health care system.
PRESIDENT CLINTON: We propose to give every American a choice among high quality plans. You can stay with your current doctor, join a network of doctors and hospitals, or join a health maintenance organization.
PHIL PONCE: Managed care was at the core of the President’s reform. But even with the failure of the President’s plan, the move toward more managed care continues. But for several years now there’s been a growing backlash against managed care, both from consumers and some in the medical profession.
LOIS HENDERSON, Nurse Practitioner: I think that’s always been like a thorn in the flesh for a lot of health care people; that somebody non-medical has sometimes more of a say or is supervising the actual manipulation of numbers when we’re talking about people’s lives, or people’s health.
MINDY EDWARDS, HMO Member: Finding a doctor was real hard off the insurance list. And I called a lot of ’em. A lot of them had denied the insurance so far. A lot of ’em weren’t taking new patients, so I only found two doctors out of probably twenty in this area that would take a new patient or take this insurance. It might be saving money for me in the long run, but I might not be getting the best health care.
PHIL PONCE: The biggest concern is that the drive to reduce costs is coming at the expense of the quality of care. In response, more than 1,000 bills aimed at regulating managed care have been introduced in state legislatures in the last year alone. More than 250 bills have become law in just the last two years. And more than 70 bills have been filed in Congress. Most are pending. Today, flanked by Vice President Gore, Health & Human Services Secretary Donna Shalala, and Labor Secretary Alexis Hermann, the President outlined the new health care bill of rights.
PRESIDENT CLINTON: You have the right to be informed about your health plan in plain English. You have the right to choose the right doctor for the right type of care, the right to medical services in an emergency wherever and whenever the emergency arises, the right to know all your medical options no matter how much they cost, the right to respectful care and equal treatment at every health care facility by every health care provider, the right to know your medical records are confidential and only used for legitimate purposes, the right to express your concerns about the quality of care you receive and to take action when that care is inadequate.
PHIL PONCE: The bill of rights also recommends that patients with serious medical conditions should have direct access to a qualified specialist from within the health plan, the elimination of so-called “gag” clauses that restrict doctors’ ability to consult with patients, and that health plans should disclose any financial considerations that could influence patient treatment. The President called on Congress to implement these rights through legislation. In the meantime, he called on the private sector to guarantee them voluntarily, and he ordered federal agencies to put them into practice in federal health programs.
PHIL PONCE: Now, four views. Donna Shalala is the Secretary of Health & Human Services and serves as the co-chair of the National Advisory Commission. Karen Ignagni heads the American Association of Health Plans, the nation’s largest trade association for HMO’s and health care plans. Alain Enthoven chairs a managed care task force in California appointed by the governor and legislature. He teaches management and health economics at the Stanford Business School; and California assemblyman Martin Gallegos serves on the same state task force. He’s entered in several pieces of managed care legislation in his home state. Welcome all. Madam Secretary, please summarize why the administration feels this bill of rights is needed.
DONNA SHALALA, Secretary, Health & Human Services: Well, the market is changing, and the consumers are very uneasy within their health plan. And it’s not just managed care. It’s their regular health plan–the fee-for-service plan. And they want–They’re concerned about access to doctors. They’re concerned about gag rules and emergency care. There are lots of things that they’re concerned about. Some of the changes the President embraced today have already been accepted by many of the good health plans in this country. But it’s a patchwork out there, and what the President is talking about, what the commission talked about, is an even playing field, so that if you get your health care in Vermont or in California, you have the same kinds of information and rights and access and appeal rights, no matter where you live in this country.
PHIL PONCE: Secretary, the President listed a whole host of rights. Does he want all of them enacted into legislation?
DONNA SHALALA: No. Not necessarily all of them in legislation. Some of them will have to be in legislation. Others may be moved by accreditation processes. So it’s accreditation; it’s legislation; it’s a variety; it’s voluntary acceptance. Today GTE announced that it was going to put in place these rights for all of its employees.
PHIL PONCE: But the thrust of it seems to be more of a mandate say than necessarily a suggestion to the industry.
DONNA SHALALA: I think just the opposite–not a mandate at all but an attempt to make certain that within plan we make these changes so that people have more information, more rights to use their plans effectively. What we’re talking about is making the market work. We’re not talking about reforming the market, about reforming the market. We’re talking about making it work better.
PHIL PONCE: Ms. Ignagni, will this bill of rights help the market work better?
KAREN IGNAGNI, American Association of Health Plans: I think we accept the challenge that the secretary and the commission has outlined, and, indeed, we have launched an industry initiative that embraces much of the–many of the principles that have been released today and that the President commented on, so we’re pleased that the President, himself, noted the value of those private sector activities. Now, I think what the Secretary is saying, the very difficult and hard task begins in defining the role of government. What’s the balance point between private sector and public sector activity? That’s a very complicated question that we hope we hear from the commission; we’re informed by that process; and we don’t too prematurely rush into legislation before we have a sense of some of the very difficult questions that have to be put on the table. For example, are we going to be dealing with federal legislation or 50 state pieces of legislation? Are we, in fact, going to ascertain the impact on real people, the impact on access, and get our hands around that? I think that the commission’s report is actually very helpful in that it outlines many ways to achieve these objectives and begins a very helpful and important discussion, which is very much on the minds of many Americans around the country.
PHIL PONCE: If I’m hearing you correctly, what you’re saying is that you’d like for the industry to come up with some of these things, as opposed to what government–government-mandated legislative requirements?
KAREN IGNAGNI: No. I think that would be too simple a construction. It’s not an either/or, in our view. We think we have an obligation as an industry to meet the standards of consumer trust and confidence. And, indeed, that’s what our industry effort is all about. And we’re going to continue down that road. We’re going to be looking at these principles, and matching that up with what we’ve already done. At the same time, we are prepared–in fact, we’ve launched a process ourselves where we’re beginning to look at constructive ways to begin to engage in a dialogue about role of government. We’re very concerned, however, and I know the Secretary is not moving in this direction, but we’re concerned with other efforts that have been put on the policy table thus far that, in fact, would micro-manage, would, in fact, lead to unnecessary costs, and have an impact on real people and access to care. So there’s a way–there’s a wrong way, and we think there’s a right way. And part of the task now in 1998 is sorting through what is the right way and what’s the wrong way, and how we move into a dialogue where we’re looking at private sector/public activity and how we balance it. It’s a balance point question.
PHIL PONCE: Mr. Gallegos, how do you respond to the President’s call for this bill of rights?
MARTIN GALLEGOS, California State Assembly: Well, I’d like to applaud the President for his effort in appointing the commission and then the commission bringing forth this bill of rights. I think it’s a long time in coming. I think it’s something that’s very necessary in today’s managed care marketplace, and I think it’s very reflective of what are the concerns of the public who are enrolled in managed care plans. They want to have more information to make informed, educated decisions. They want to know that their medical records are going to be protected and kept confidential. They want to have better access and choice to health care providers. They want to know that when they go to an emergency room, they are going to be held to a prudent lay person’s standard, which is something that currently we don’t see a lot in the marketplace and in the system. So I think that clearly this bill of rights is going to be a document that is a good first step. It’s a move in the right direction, in my opinion, and I think that each state can take this and take this document and begin to mold it to fit the particular needs of each state. A state like California, for example, has because of the numbers and the percentage of penetration of managed care in the market, has far different needs than other states that don’t have as many people enrolled in managed care plans, and it doesn’t represent such a high percentage of the market.
PHIL PONCE: Mr. Enthoven, is this bill of rights a step in the right direction?
ALAIN ENTHOVEN, Health Economist: (Sacramento) Well, I think it has some good things and some not so good things. I think they missed perhaps the most important thing they could have done, and that is roughly 1/3 of the people in this country do not have a choice of health care plan. In California–through their own employment–something like 45 percent of people don’t have a plan. And so many of them are kind of involuntary recruits into managed care. I wish that California could pass a law that said every employer who offers health insurance has to offer a choice, as the federal government said back in 1973, with the HMO Act. Unfortunately, that expired. Because of the Employee Retirement Income Security Act, the federal government regulates employee benefits, so states cannot act in that area. I was really hoping that the national task force would recommend to the Congress that the Congress re-pass something like the HMO Act that said people could have choices of plans.
PHIL PONCE: Mr. Enthoven, are you surprised by this apparent backlash against managed care plans? Managed care is something that you had been working with now for some time.
ALAIN ENTHOVEN: Well, given what happened, I’m not very surprised. I mean, it played out in a rather different way from what I had envisaged when I proposed the managed care revolution 20 years ago. But for one thing it’s happened very quickly. And for another, people didn’t have a wide range of choices. My idea 20 years ago was everyone would have a responsible choice among indemnity insurance, preferred provider insurance, individual practice, group practice, prepaid group practice, and so forth. And they would have to pay the difference if they chose a more costly health plan. And so it’s be a responsible choice. And gradually they would migrate out of their own self-interest into the plans that gave them the best value for money. Unfortunately, what happened is in the late 80’s we had costs in health care doubling every five years, and suddenly people got very concerned, and employers started saying, well, yesterday there was indemnity insurance, but tomorrow you’re going to be in an HMO. And a lot of people didn’t have a choice, and it happened rather too quickly.
PHIL PONCE: Sec. Shalala, what do you think is a sub-text for this growing concern, this apparent concern on the part of consumers, this backlash, so to speak?
DONNA SHALALA: Well, I think the market has changed rapidly. I think they’re not getting the information they deserve. I think perhaps some of the plans squeeze down too quickly. People were used to a lot more freedom in a health care system. As costs went up, as Alain pointed out, the system started to squeeze down, their employers started to limit what they had access to, and it’s organized in a different way. So they’re uncomfortable. I share some of Alain’s dream. I mean, all of us would love to have lots of choices out there, but that’s not possible in this environment. So what we have to do is make what we have now sensible, make it work better for everyone, and that’s what the consumer bill of rights is about. It’s making their current plans work better for them so they know more about them; they can use them more effectively.
PHIL PONCE: Ms. Ignagni, how about the issue of increased cost, is there a possibility that if some of these bill of rights are actually implemented, cost of insurance is going to go up and, therefore, some people might lose access to health care?
KAREN IGNAGNI: Well, I think that that’s what we need to ascertain. That’s part of the complicated set of questions that have to be examined in the policy arena. We simply don’t know. Working families are going to want to know that–the answer to those questions. Without a doubt, working families want protection. And we take that very seriously from the standpoint of the industry, and we have launched our own efforts to do that. At the same time, they’re going to want to hear from legislators about the blend of private and public sector activity. They’re also going to want to hear answers to the questions. It’s in the details. And, as we found out a number of years ago, in terms of the discussions on health care, the details are very important. So we think it’s important not to sidestep these questions–and I know the commission is going to begin to get its hands around it–to answer the questions, look at the impact on cost, look at the impact on access, and then determine the most efficient way to meet these objectives. I think that’s what the secretary laid out. I think that’s what she has in mind, and that’s what we hope will happen, as opposed to necessarily a rush to do things in one way or another. We think that would be counterproductive. And the final factor is how do these complicated questions actually get vetted and answered in a year of election year politics? And we could perhaps leave that for another show, but I think we’ve seen thus far is an opportunity for certain politicians rhetorically to try to suggest that there is a backlash, a vote against managed care is a free vote. Frankly, I think that that misses the boat. I think it misses the point. I think working families are standing out there and wondering what the impact will be on them. Without a doubt, consumer protection is a fundamental objective. At the same time, the most important thing we can do for consumer protection is turn in a health care system that brings costs under control, keeps providers accountable, and assures quality. So we have to look at all those objectives.
PHIL PONCE: Mr. Gallegos, how do you respond to the political component? I mean, how does health care reform–how does reform of the managed care system tie in with the kinds of political currents that people such as you would have to be sensitive to?
MARTIN GALLEGOS: Well, first off, I think that the characterization that the debate by politicians is rhetorical is not a fair characterization. What we are echoing in our legislation is what we are hearing from our constituents. The public feels that they have lost control over their ability to make their–make decisions on their own health care. And that’s what they are frustrated with. That’s what they are angry about. And the fear in the public’s minds is that health care decisions are being made and driven by bottom line economic concerns and not by good, clinical medicine because in this new system we’ve tied the hands of the doctors to a great extent, and we’ve put economic pressures on many of their decisions. Now, when we see that the regulatory system is not being responsive and when we see that the industry, itself, is not being responsive to the concerns and to the fears and issues of the public, it becomes incumbent on the legislatures, whether at the state level or in Congress, to step forward and to ensure that quality of care is being provided to–at the level that we expect here in the United States to the public and that we’re not sacrificing quality care for bottom line profits.
KAREN IGNAGNI: Can I say something about that? I think the disconnect here is, in fact, that much of the debate in the states and increasingly in Washington has been about clinical mandates–members of Congress, state legislatures practicing medicine. It’s held up in the name of consumer protection. It’s hardly that. We have quite a lot of provider protection. So what we hope to do is actually get to a point–and we are prepared and looking forward to participating in a public sector debate that actually looks at real consumer protection. I think the commission has begun this process. There are a number of questions to answer before we actually chart a course, but we’re ready, able, and willing to participate in that.
DONNA SHALALA: The significant–
PHIL PONCE: Mr. Enthoven, go ahead, please. And then I’ll get back to the secretary.
ALAIN ENTHOVEN: The people feel that they’ve lost control and are dis-empowered, and I relate that in my mind to the fact that they’re not offered choices. And with all due respect, I disagree with Donna that it’s not practical. Back in 1973, the Congress passed a law that said every employer who offers health insurance above 25 employees will, if the HMO’s are there and want to be offered, offered a group practice HMO and individual practice HMO, and that would be on top of their standard traditional fee-for-service indemnity coverage. So nobody was forced into an HMO. Everybody had a choice. And so people in that circumstance were empowered and not dis-empowered by the fact that they had a choice of alternatives. There’s nothing impractical about that.
PHIL PONCE: If I could quickly get the Secretary’s response to that in the short time we have.
DONNA SHALALA: I think the point that I’m making is that Alain is talking about expanding access to health insurance by giving people more choices. We’re talking about a sensible set of consumer protections for the health care they currently have. A commission made of employers and doctors and nurses and consumer advocates came to the table and said these are sensible proposals, operating principles that could be used in every plan that everyone ought to have. This will, in fact, reassure people about the health care plans that they currently have. Some of it will be passed in legislation. Some of it will be done through the accreditation process, and some of it probably through a voluntary process. The important thing is that it will improve the quality of health care in this country.
PHIL PONCE: Madam Secretary, all our guests, thank you very much for being here.