Bill of Health?
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PHIL PONCE: We get two views now on what Congress should do about managed care. Ron Pollack is director of Families USA, a health care advocacy group. He served on the President’s advisory commission on health care quality, which made recommendations about managed care last year. And Bill Gradison is president of the Health Insurance Association of America. Its member companies provide health coverage for 65 million people. He’s a former Republican congressman from Ohio. And gentlemen, welcome both.
Mr. Pollack, what is your best argument for federal legislation of the kind that Susan was talking about?
RON POLLACK, Families USA: I think there are a variety of reasons. First of all the American public I think is feeling very worried that-you know, we’ve had a real revolution in our health care system. Before in the old fee-for-service system there was every incentive to provide more and more care. And doctors made money and everyone made money that way. Now we’ve got a system where you make your money by withholding care, so a lot of people are terribly concerned that they’re not getting the care they should be receiving, so I think we need to restore the public’s confidence.
Secondly, if we’re going to drive quality, the only alternative that I know to driving quality is let the marketplace work, and that’s what the insurance industry thinks we should do. Unfortunately, we don’t have a marketplace for most people to get health coverage. Most of us get our health coverage from an employer, and our employers increasingly are saying here’s one plan and it’s the only plan and you don’t have a choice, so you can’t, in effect, vote with your feet and thereby drive quality. Thirdly, it-right now we’ve got a crazy quilt pattern. We’ve got some states doing one thing, other states doing another thing. Nobody understands what rules they’re supposed to be functioning under, whether it’s the consumer’s or whether it’s the health plan’s. The only way we can rectify that is if we have one federal law which makes sure nobody can fall under a floor of very important standards.
PHIL PONCE: Mr. Gradison, issues of confidence, of quality, of equality?
BILL GRADISON, Health Insurance Association of America: Well, frankly, we’re in a market today where the consumer is king. Consumers four or five years ago said health care is too expensive. And you know they were right, and what happened was that health plans and health insurers developed a system called managed care, which has brought health care and inflation down more or less in line with the general inflation rate, which is a remarkable accomplishment. Now, obviously in the process there were a lot of disruptions and there were a lot of changes made that people didn’t like. And, as a result, the plans are making very dramatic changes.
Much of what Ron talked about isn’t the case today. Two thirds of Americans on the job get a choice of two or more plans. 92 percent of Americans on the job have an option to go outside of the network provided by let’s say their HMO and pick a provider of their own. 83 percent of Americans who have an option to change plans, say they’re going to stay with the plan that they have, people are overwhelmingly satisfied with their specific plan, however much they may raise questions in very broad terms about managed care, about HMO’s, or about health insurance in general. My basic concern on behalf of consumers is that these very well-intentioned consumer protections, many of which are being put into effect anyway, if done through regulation, will drive up the cost of health insurance, make it less affordable, and result in fewer people having health insurance than have it today. That’s not in the best interests of America’s consumers.
PHIL PONCE: So, Mr. Gradison, are you saying that you oppose any federal legislation trying to “ensure these rights?”
BILL GRADISON: I think the consumer would be better served if they followed the recommendations of the president’s quality commission on which Ron sat which recommended these protections but did not recommend that they be put into federal laws and a federally enforceable right. That’s precisely what they did.
PHIL PONCE: Mr. Pollack is the market responding? Do consumers have a choice?
RON POLLACK: No. Of course they’re not. Today most of us get our coverage through an employer and half of us who get our coverage from an employer have no choice of plans. So we cannot walk with our feet, and we found that very clearly on the president’s commission. I’ve got to say that the American public is terribly worried. They’re worried that if they’re experiencing an emergency, that they won’t be able to go to an emergency room because a health plan says you need to have prior authorization before you go to an emergency room. They’re worried if they need a really basic health service, being referred to a specialist or get a test, when they fear they may have cancer, they’re being told that they can’t get that test or they can’t get referred to a specialist, so what a Patients Bill of Rights is about is to try to make sure that people have recourse when they’re denied the benefits that were promised to them by their insurance companies. And the only way you can have a right is ultimately if you have a remedy. So if we just say to the insurance companies go do it and if you choose to do it, terrific, but there’s no right there, so that’s why we need federal legislation.
PHIL PONCE: Mr. Gradison, how do you respond to the polls? How do you respond to the reaction in movie theaters to that scene that we saw in the clip? Why is the public so concerned and hostile in some cases?
BILL GRADISON: Well, I think, in general, the public is being influenced by anecdotes that are not borne out by actual experience. There have been a whole series of studies which have compared what really counts, which is medical outcomes. Does somebody get well? Do they get home quickly? Do they survive a serious illness? Compare those with managed care versus more traditional insurance, and every single study that I’ve ever seen indicates that the quality of care is at least equal, if not superior in managed care as in comparison with the kind of plans, which it took the place of.
You know, there’s a mythology out here that the federal government knows best, that only if big daddy in Washington sets up a bureaucracy and puts out a lot of regulations can people be protected. What we’re not told is the fact that in the government’s own programs these things are not available. For example, the Veterans Administration does not have the kind of emergency room provision that this legislation suggests. No federal employee is entitled to an objective external review of a denial of care by a federal employee plan. The Indian Health Service has practically none of these protections. I think the federal government has got a role. The federal government, the state governments, local governments pay for almost half of all health care in America, and what I think they ought to do is to influence the way this develops by example. Let them get it right, and then compete in the sense with the private market, the private sector, private plans, which are doing the very same thing, and let’s see what works. If it’s done through regulation, there will be a single approach. You’re going to have to do it by the rule book. It will take longer to get these plans in effect, because companies which may not have the provisions today are going to have to wait till a law is passed, regulations are written, and maybe even there are some court decisions before they find out what’s expected of them.
PHIL PONCE: Mr. Pollack, may I ask you a question?
RON POLLACK: Sure.
PHIL PONCE: Is it possible-because this ties into something he was just alluding to-and that is, is it possible to have a system where costs are maintained and people still have a lot of freedom?
RON POLLACK: Of course. And when we’re talking about a Patients Bill of Rights, we’re talking about something that is extremely inexpensive. Every independent survey-the only exceptions are those that have been commissioned by the insurance industry-every independent survey says this costs virtually nothing. For example, the president’s commission’s proposals, the Congressional Budget Office tells us, will cost 0.3 percent of premiums.
PHIL PONCE: Let’s get a quick response from Mr. Gradison.
RON POLLACK: Let me just-give you the list. The Kaiser Family Foundation hired Coopers & Lybrand. They told us also it was under 1 percent.
PHIL PONCE: All right. I do need to get Mr. Gradison on that point.
BILL GRADISON: I just want to say that’s not so. Many of these studies recognize how difficult it is to estimate the cost. And for example, with regard to the question of exposing health plans, employer provided health plans to state liability, the reports that come back say, well, we haven’t taken into account defensive medicine. We haven’t-because we don’t have estimates. We haven’t taken into account the changes that might take effect with regard to utilization review. The fact of the matter is that this is a serious concern. We represent consumers because they’re our customers. We’ve got to meet their needs every day, not just in an election. And we’re absolutely convinced that we’re doing what is best for consumers in pointing out the unacceptably high premium increases, which we would be forced to pass on if this ill-advised legislation is passed.
PHIL PONCE: A quick response from Mr. Pollack.
RON POLLACK: I find it astounding to hear the insurance companies saying they’re worried about costs. At the same time that they are pulling out of the Medicare and Medicaid programs so that they’re not serving the people who need care the most, they’re providing compensation to their highest level executives, which is extraordinary. For example, the head of Oxford Health Care was given $29 million a year and $83 million in unexercised stock options. It’s clear we’ve got a double standard when it comes to cost. Millions of dollars that get paid to HMO and insurance company executives, that seems to be all right, but the pennies that it cost to provide basic rights for patients, that’s where the insurance industry goes ballistic. And I think it’s very unfortunate. One other point I just want to make-
PHIL PONCE: Excuse me. I’d like to get Mr. Gradison in. Mr. Gradison.
BILL GRADISON: I’m glad you brought up Oxford. They’re not a member of my association. But I do follow what they do. What happened to Oxford is that they had so underpriced the benefit package that they made available that they would be broke today if they hadn’t been able to go out and raise almost $3/4 billion to say that because an executive got a high salary, that that is the reason that Oxford had difficulties is simply not the fact at all, not at all.
PHIL PONCE: Gentlemen, I’m afraid that’s where we’ll have to leave it. Mr. Pollack, Mr. Gradison, I thank you both.