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| DOCTORS IN THE HOUSE | |
 October 6, 1999 
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The Health Unit is a partnership with the Henry J. Kaiser Family Foundation.
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Healthcare tax breaks |
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Mr. Dingell, today the tax bill, the tax break bill which passed the House, is something that you called a poison pen pill bill. You spent a lot of effort trying to have it killed, feeling it would undermine the efforts you have been trying to make. What's the state of play right now as you prepare for the lawsuit bill tomorrow?
GWEN IFILL: Mr. Shadegg, your bill, your proposal, the alternative has attracted Republican support, Republican leadership support, yet you supported the tax break bill which passed today. What is your sense of it?
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| Making HMOs accountable | ||||||||||||||||||||
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GWEN IFILL: Today's debate was all about access. Tomorrow's debate is all about accountability, as I believe you, Mr. Shadegg said today on the floor. The question is... both of you agree the debate tomorrow is about lawsuits. How do you sue? How do you hold HMO's accountable? Both of you agree that people should be allowed to sue their HMO's. The question is: How, in which court and whether there should be any kind of limit on the kind of damages. Mr. Dingell first, could you give us a sense of whether you think, what position you think your bill is in right now? People have said up until today that you had a very go chance of getting your version passed.
GWEN IFILL: Let's give Mr. Shadegg a chance to respond. I can hear him itching to get in.
GWEN IFILL: Let's bring our advocates into this. Mr. Danner, you represent small business and, obviously, you were listening to the debate today. You're up on the Hill, the hallways were clogged with people who are on both sides of this debate. Mr. Archer, who's the chairman of the Ways and Means, the tax writing committee said today, "Americans want more ambulances not more ambulance-chasers." I take it you agree with that sentiment?
DR. THOMAS REARDON: Well, I think this legislation does several things.
First of all, we've endorsed the Norwood-Dingell bill because it is
a bipartisan bill and because it will provide the protections that our
patients need in this country. Yes, the accountability issue is there,
but when a health plan makes a decision that results in negligence and
harm to a patient, they should be just as liable as I am as a practicing
physician. They should be |
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| Will reform increase health care costs? | ||||||||||||||||||||
| GWEN IFILL: Mr. Shadegg, you just heard Dr. Reardon say
basically this isn't going to cost a lot of money, this isn't going to
drive costs up, this isn't going to result in lawsuits.
GWEN IFILL: But Mr. Dingell, let me just ask you about this. You've seen the advertising; we saw it in our setup piece. You've heard a lot of discussion about how this is going to hurt the little guy. Why can't the private sector respond to this on its own? Why does it take government intervention?
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| Lawsuits at the ready? | ||||||||||||||||||||
| GWEN IFILL: Dr. Reardon, if I'm not mistaken, I have read
where a lot of the lawyers who were involved in tobacco lawsuits are standing
at the door poised to bring lawsuits and move right into the healthcare
industry. Is that not so?
GWEN IFILL: And the difference is? DR. THOMAS REARDON: -- then a patient should be made as whole as possible. But there's one other issue that I think is important in the Shadegg bill. It would be a step backward because it makes health plans liability in federal court but physicians in state court. There's a much higher standard to sue in a federal court. The second thing it does, it would undo all the good case law in the states that's there, and third, it would preempt the state laws in Texas, Georgia and California, which - those lawsuits -- we don't want to step backwards. We want to go forward. REP. JOHN SHADEGG: All of three of those points are just flat wrong. Number one, this is a federal law. ERISA, which governors this area of the law, is a federal law; therefore, the lawsuits should be in federal court. Second, all state-based lawsuits are based right now on quality of care and they go forward. Third, the Texas and Georgia and Louisiana laws are specifically exempted, and we go beyond that and say any other state that wants to pass legislation may do so. Let's go back, though, to the question you asked of why the federal government has to get involved. And the reason for that is that this area of law is governed by ERISA and in 1987… GWEN IFILL: The Employee Retirement whatever... REP. JOHN SHADEGG: The Employee Retirement Income Security Act. GWEN IFILL: Thank you. REP. JOHN SHADEGG: Right, Employee Retirement Income Security Act. By the way, you notice healthcare is not mentioned in there. That was passed in 1974 before there even with were HMOs. But in 1987, the U.S. Supreme Court made a tragic mistake, I believe, in a case called Pilot Life, in which they wrote that a law intended to protect employees, instructing employers to treat them as a fiduciary, the Supreme Court interpreted that law to say healthcare plans are immune when they injure or kill someone, and I have quoted across the country a case called Corcoran versus United Healthcare where a plan's clear negligence killed Mrs. Corcoran's baby and the court had to say, "We're terribly sorry, under Pilot Life, there is no recovery." Our bill reverses that terrible decision and says, "nobody in the society, nobody, not an HMO governed by ERISA and not anybody else, should be immune from damages when they injure or kill someone." GWEN IFILL: Yes. Mr. Danner, you represent small business, obviously
business people are not particularly happy with either version of this
bill. You'd prefer to see n DAN DANNER: No. I think the debate is a good one, and we're happy to engage in that. We happen to disagree that individual companies couldn't be held liable in lawsuits. We certainly believe that things like the decision to offer care could be just choosing your plan and you could be still in a lawsuit. And we don't think that the Texas outcome is any kind of a marker in terms of legislation here. The Texas judicial decision says that you can sue for some things. You cannot sue for administrative and coverage decisions. That is specifically denied in the Texas decision, and that's a big part of what we're talking about here. So it's apples and oranges, and it is not a predictor of the lawsuits that would happen as a result of federal legislation. GWEN IFILL: We'll all be at the edge of our seats tomorrow. Thank you all very much. |
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GWEN
IFILL: Joining me now are two of the key players we saw in our report,
Congressman John Dingell, Democrat of Michigan, and Congressman John
Shadegg, Republican of Arizona. Joining them are Dr. Thomas Reardon,
president of the American Medical Association and a physician in Portland,
Oregon, and Dan Danner, vice president of the National Federation of
Independent Business and chairman of the Health Benefits Coalition,
which represents employers.
REP.
JOHN DINGELL: Well, the simple answer is it does very little for anybody.
About half of the uncovered people are children. None of them file 1040's,
so none of them are going to draw any benefits out of this. In addition
to this, you're going to find that the bill does nothing for those who
do not pay taxes or pay minimal taxes because they don't have enough
money to derive any benefits. The practical result of this is that,
as pointed out as the Joint Committee on Internal Revenue Taxation,
it's going to cost about $132,000 for each person who draws benefits
on it. And most of the people who are now not drawing benefits under
any healthcare plan are going to continue to not draw any benefits and
have the same problem they do now. It's a sham and an illusion.
REP.
JOHN SHADEGG: Well, I think the bill we passed today will in fact help
every single American who works and every single American who pays taxes.
That leaves out people who don't work and don't pay taxes. That's a
pretty narrow group. If you pay taxes, this bill will allow you to [take]
a deduction. If you work for an employer and you don't even pay any
income tax, this bill allows that employer to offer you healthcare because
it allows the small business employers to pool together and buy policies
less expensive than they can buy right now, which means that many small
businesses who cannot offer any coverage to the uninsured will be able
to do so once this bill passes. So the reality is the bill we've passed
will make healthcare more available and more affordable for virtually
all Americans who either work or work for somebody that has a small
business and can't offer them coverage right now, or for everybody that
pays taxes
REP.
JOHN DINGELL: Well, I still think we have an excellent chance, and I've
never marched into a flight under the flag of defeat. I think we have
the best bill. We have better than 300 organizations, all the way from
the AMA, from the healthcare specialists of all different kinds, the
nurses, all consumer groups, American labor and the League of Women
Voters. We have a genuine bill. We have the only bill that's been pending
for any significant amount of time. All the rest of them were just introduced
this week in some considerable haste because all of a sudden the Republican
leadership found they needed a bill. Our bill takes care of the right
to sue in a proper way and proper forum. Our bill sees to it that the
patient is protected against the kind of treatment he now gets under
ERISA. The other bill, sponsored by my good friend Mr. Shadegg, for
whom I have enormous respect, actually gives less protection against
misbehavior by insurers than does the current ERISA law. We take care
of things that are important like seeing to it gag rules are eliminated.
We provide treatment for medical pharmaceuticals and things of that
kind. We see to it that all kinds of health conditions are eligible
for treatment under special clinical trials. The other bill provides
only for cancer. It doesn't deal with Alzheimer's, Parkinson's Disease,
HIV-AIDS.
REP.
JOHN SHADEGG: With all due respect, Mr. Dingell, you might say that
Mr. Boehner's bill doesn't do better than current law, but the reality
is our bill allows the right to sue a healthcare plan - I didn't interrupt
you - our bill allows you the right to hold your healthcare plan accountable.
It is written very clearly on that point, but very importantly, it says
that you're not going to turn it into a lawsuit lottery. The reality
is there are two extreme positions here: One extreme position is staked
out by Mr. Dingell and the Democrats and the president and that is they
want to turn the whole healthcare system over the trial lawyers and
let them run the system. And quite frankly, their bill does not protect
employers. Under their bill, if an employer makes any discretionary
decision in the course of the process, that employer can be sued. The
other extreme position is represented by the HMO industry, and they
say, "we don't ever want to be sued for anything, even when we
kill somebody or injure somebody." Both of those are extreme positions,
which I believe the American people will reject. The reality is we need
to pass a middle ground bill that holds plans accountable -- as our
bill does -- but does not make employers liable and puts reasonable
limits on the entire system so it doesn't become a lawsuit lottery,
as Mr. Dingell's legislation would allow. 
DAN
DANNER: Absolutely. Small businesses care about cost and coverage and
the threat of lawsuits, and I think the bill that passed today will
go with a long way to lower costs and provide more choices for small
business, and we strongly supported and commend Congressman Shadegg
for his hard work to help it pass. We are still concerned very much
in the debate tomorrow about the threat of lawsuits and not just what
they'll do to costs. For most small businesses the threat of a lawsuit
is a bet-your-business threat. If you lose, most of them, one lawsuit
will put them out of business. So it's a real concern. 
GWEN
IFILL: Physicians, Dr. Reardon, obviously have been walking in lock
step on this. They feel very much as if health maintenance organizations
have threatened the profession and that this is the first way that you
can finally get to curb them. Do you think that there's with a chance
that that will happen really as a result of this legislation? 
accountable
for their decisions. We like this bill because it turns the decision-making
process back to physicians, it covers all Americans, there's a strong
external appeals process and there's accountability for HMOs. They should
be just as accountable. Now, it's been cost accounted out by the Congressional
Budget Office and it's going to cost very little. It's not going to
run healthcare costs up; it's not going to cause more in the uninsured,
and if you look at Texas where they've had the ability to sue plans
to for two years, I can count on one hand the number of suits. So if
healthcare plans or managed care provides the necessary care for patients,
they don't have to worry about lawsuits. 
REP.
JOHN DINGELL: Well, because it's...The way you make money is by controlling
the delivery of costs and that, the result of that is that the HMOs
make their money in that fashion, not by delivering services. The real
cost of this has already been costed out, it's been costed out by the
Congressional Budget Office. It's low. In Texas, the cost per plan subscriber
is less than 13 cents a month. That's pretty low. And in two years of
experience, there's been less than two lawsuits filed. The simple fact
of the matter is our bill does not permit suits against employers unless
the employers get in and make the decisions in which event if they hurt
somebody, they have a liability. Our bill has a deliberate attempt to
prevent lawsuits, except in instances where there is real hurt to the
patient and tries to see to it that the matter is reviewed in fashions
outside the court through an internal review mechanism and then an external
review mechanism. And if during those reviews, it's found that there's
no hazard or no hurt to the patient from the actions of the insurer
or the employer, the end result is no lawsuit because you can't succeed
in a lawsuit under those circumstances. 
DR.
THOMAS REARDON: Well, I have heard that. But let me make one thing clear,
the AMA will never endorse lawsuits, but we do endorse accountability,
and that if we make a decision that results in negligence and harm,
--
one
of this happen. Does it feel like a train coming down the track towards
you? Is there some way that you can make peace with it? 
