MANAGING HEALTH CARE
OCTOBER 8, 1996
Two propositions for stricter regulations of HMO's are on the ballot in California. They prohibit gag rules that forbid doctors from telling patients about treatments not available under their plan. They ban financial incentives for doctors and others to deny care, and they call for a second medical opinion when an insurance company won't authorize a recommended procedure. Spencer Michels reports on the political furor that has ensued.
A RealAudio version of of this NewsHour segment is available.
April 8-11, 1996
The NewsHour spent four days exploring issues facing America's Health Care system.
April 11, 1996
Lee Hochberg reports on efforts in Arizona to regulate managed care organizations.
Read the Online NewsHour's issue backgrunders on the health care issue
SPENCER MICHELS: More than a third of Californians belong to Health Maintenance Organizations, the highest percentage in the nation. These HMO's are insurance plans that provide or arrange for medical services in exchange for a prepaid fee. They are designed to keep costs low, partly by controlling the doctors that members see and what treatments they get. Many HMO members like Marsha Price of San Francisco, who just had twin babies at Kaiser Permanente, California's oldest and biggest HMO, are happy with their health care.
MARSHA PRICE, HMO Member: The nurses were so incredible, and the two babies were in the hospital for two weeks, and it's just been so wonderful. They're caring. Um, I felt like I could trust the nurses completely.
SPENCER MICHELS: But not all HMO customers are satisfied. In one well publicized case, nine-year-old Carly Christie of San Mateo County was diagnosed with a cancerous tumor in her kidney. Her HMO would not pay for a specialist with experience in removing tumors from children. Her parents eventually won in arbitration and the HMO was fined $1/2 million by the state. The six-year-old daughter of Brenda Pederson of Foster City near San Francisco had a similar experience. Three years ago, Sarah was diagnosed with a malignant brain tumor. Her mother, a nurse, battled her HMO to get a pediatric brain cancer specialist for Sarah, as her doctor had recommended.
BRENDA PEDERSON: He said whatever your insurance company tries to do, he says, you make sure that pediatric, um, neuro-oncology, the specialists with brain tumors, stay involved with this. I conveyed that to Aetna, was dealing all the time with Aetna, and they, um, did not want me to see the specialist. They wanted me to see a pediatric oncologist. Everything that the doctor recommended they, they disagreed, and I was always having to fight.
SPENCER MICHELS: The Pedersons eventually left the HMO to get the specialist they wanted. Such complaints have led to two initiatives to regulate the health industry, especially HMO's, on California's November ballot. One measure, Proposition 216, is sponsored by the Nurse's Union, angered by the fact that low paid workers are replacing nurses to help hospitals save money. That measure, the more far reaching of the two, was co-authored by longtime consumer advocate Harvey Rosenfield. He's got experience with initiative campaigns. In 1988, he led the successful fight to pass auto insurance reform, despite a well-financed campaign by insurance companies.
HARVEY ROSENFIELD, Consumer Advocate: I am stunned by how in a space of just a couple of years, um, the health care system in the state has caused so much concern and problems for people that everybody's got a horror story about HMO's the same way everybody used to walk up to me on the street and say, hey, my auto insurance company overcharged me.
SPENCER MICHELS: A second proposition, 214, is being supported by the Service Employees International Union, SEIU, whose members, health care workers, feel threatened too. Sal Rosselli is president of the Bay area local.
SAL ROSSELLI, Hospital Workers Union: Proposition 214 does protect health care providers and health care workers, but it protects patients, No. 1. It allows health care providers, physicians, and nurses and other providers to speak out, to blow the whistle, to criticize HMO's and their unpublished regulations and guidelines that deny care.
SPENCER MICHELS: Both ballot measures call for state standards for staffing health care facilities. They prohibit so-called gag rules that forbid doctors from telling patients about treatments not available under their plan. They ban financial incentives for doctors and others to deny care, and they call for a second medical opinion when an insurance company won't authorize a recommended procedure. In addition, Prop 260 imposes new taxes on health care businesses when they merge or reduce the number of hospital beds or convert from non-profit to for profit. Large stock distributions to executives would also be taxed. The money raised would be used for regulating the industry and for some public health services.
COMMERCIAL SPOKESMAN: So the paper says Congress is moving ahead on health care.
SPENCER MICHELS: The health industry is fighting both proposals. A coalition of HMO's and others has hired the team that did the “Harry and Louise” ads to defeat President Clinton health care reform. Frank Shubert is directing the campaign.
FRANK SHUBERT, Campaign Consultant: The folks in this coalition are opposed to the initiatives because they raise costs by billions of dollars they do not enhance quality health care in California, and they contain an enormously increased role for government in this state in regulating health care.
SPENCER MICHELS: On the other side, Herb Chao Gunther, who runs the “Yes on 216" campaign, says regulation is needed.
HERB CHAO GUNTHER, Campaign Consultant: We know that this health care, the excessive profit taking, the cutting of quality can't sustain itself. People aren't going to put up with it. I mean, we are dealing with the rage of patients that have been victimized by this already.
SPENCER MICHELS: Gunther is using nurses and Green Party presidential candidate Ralph Nader to build support for 216.
RALPH NADER, Consumer Advocate: The super rich are running the health care system into the ground so they can become hyper rich. That's the most disgraceful of reasons.
SPENCER MICHELS: 216 supporters argue that an initiative is the only way to bring needed regulation because, according to Herb Gunther, powerful HMO's have pressured the California legislature to repeatedly defeat health reform bills.
HERB CHAO GUNTHER, "Yes on 214/216": The HMO industry allows a discussion to take place but then the hammer comes down. There, politicians have successfully killed every effort to regulate HMO's.
FRANK SHUBERT,"No on 216": We don't need two ballot initiatives to accomplish change, uh, and in terms of the notion of, you know, the notion of profits being driven by, uh, uh, greedy HMO's and so forth, you know, these initiatives aren't going to change whatever motivations that people have. And increasingly, the marketplace is changing to respond to consumer needs.
SPENCER MICHELS: Shubert's strategy to defeat the measures is to attack the unions as interested only in preserving jobs for their members. His side will spend considerably more than the promoters of the initiatives for commercials like this, which mocks the very real split between the two unions.
FIRST MAN IN COMMERCIAL: My health care initiative is better than his.
OTHER MAN IN COMMERCIAL: Oh, sure. 214 doesn't have a single provision to cover more people.
FIRST MAN IN COMMERCIAL: 216 has four new taxes costing Californians billions.
SPENCER MICHELS: Californians have chosen between rival like-minded initiatives before. Polls indicate the fate of these may depend on how voters view the health care they get. Mark DiCamillo directs the field poll.
MARK DiCAMILLO, Pollster: My general sense, although we didn't measure it directly in this poll, is that there's probably not a huge amount of dissatisfaction with people's own health care plans--certainly not to the extent that people were clearly dissatisfied with auto insurance premiums back in 1988.
SPENCER MICHELS: DiCamillo's early survey shows the measures behind but with a large undecided. Both sides are convinced that the outcome of the health reform initiatives in California could have an impact in other states and in Congress, as it takes up the contentious of health care once again.