Managed Care Spurs More Health Battles Bills Seek To Restore Protections Lost By Repeal Of ‘93 Reform Act

Dr. George Rice says he and his patient used to make all the decisions in his examining room.

Now there’s a third party involved, Rice says: the patient’s insurance company.

Managed care is thrusting insurers into a wide realm of health care decisions once exclusively made by medical providers and their patients.

One year after repeal of much of the state’s 1993 Health Care Reform Act, some legislators worry insurance companies now wield too much power and consumers face too much risk.

They’re pushing bills to require more disclosure by health plans and hospitals, set minimum standards for some services and give consumers more choice.

“With repeal of the 1993 act we’ve taken away a lot of regulations that would have protected the consumer,” said Rep. Eileen Cody, D-Seattle, a registered nurse and primary sponsor of a bill to require health plans and hospitals to provide more information.

“We have to make sure consumers know what they are buying and where their money is going.”

Under managed care, insurance companies negotiate contracts with doctors to serve the insurers’ patients. That differs from traditional fee-for-service care, in which doctors bill patients and insurance companies pay most of the tab.

Insurance companies are fighting the disclosure bills, which they say aren’t needed because plenty of information already is available.

Insurers also must have a say in care provided if they are to control costs, industry advocates argue.

“What if you could go to a supermarket and get whatever you want and send the bill to someone else?” said Basil Badley, lobbyist for a trade association of more than 200 insurance companies.

“The hamburger’s not going to be touched. It’s going to be all beefsteak and expensive fish. That’s human nature,” Badley said. “We want our policy-holders to get good care, but be able to afford it too.”

From what laboratory to use to what care a patient may receive, insurers often have the last word, said Rice, a Spokane physician and president of the Washington State Medical Association.

Doctors find themselves consulting with insurance bureaucrats in another state who must authorize treatments and referrals, he said.

“You end up with some high school graduate in California making these decisions, not doctors,” Rice said.

Patients sometimes don’t even know what their medical plans cover. And they can be surprised to learn it restricts even basic care, consumer advocates say.

Some doctors get cash incentives from insurers to limit referrals and care, and patients may not even know it.

Disclosure bills now before the Legislature would require insurers to make such compensation arrangements public. Insurers are fighting it.

“Underlying these bills is a basic premise that there is inadequate information. We think there’s an enormous quantity of information out there,” said Melvin Sorensen, an insurance lobbyist.

He said some of the information consumer advocates want disclosed involves contractual agreements insurance companies don’t want to share. “This is a competitive market,” Sorensen said.

Other bills would require insurers to tell patients how much the companies spend on advertising, salaries and administration. Insurers are fighting that, too.

Another bill would require hospitals to disclose how much they spend caring for patients, and how much goes to administration, overhead and other costs.

“People need to know how their money is being spent. I am very concerned about the profit motive in health care,” Rep. Cody said. “It’s a sin, making a profit off the sick. It’s not the way we as health care providers feel the world ought to go.

“Insurance companies see patients as cash cows. This isn’t managed care. It’s managed cost.”

David West of Washington Citizen Action, a consumer group, agrees.

“Taking control of medicine away from doctors and giving it to corporate bureaucrats is nothing but bad news for consumers.

“You can’t just leave it up to the market. Unless government plays a role in setting some minimum standard of quality it will be a race to see who can come up with the cheapest premium, and quality is getting left in the dust.”

Insurers argue government already meddles too much in the insurance market. More regulation is the last thing they want.

They are backing bills to erase some of the remaining health reforms that survived the repeal of the health care act.

One bill, co-sponsored by Rep. Larry Crouse, R-Spokane Valley, would restore the one-year waiting period for people who want insurance coverage for a pre-existing medical problem. Currently, people must wait only three months before a pre-existing condition is covered.

Crouse argued the provision rewards irresponsible people who only buy coverage when they need it. That makes insurance more expensive for people who carry it all the time, he said.

Insurance Commissioner Deborah Senn is fighting the bill. “That really turns the clock back,” she said.

Senn blames the repeal of the 1993 health care law for problems consumers face, from not being able to choose their doctor to escalating rates for some policies.

“What people traded when they said they didn’t want government-regulated health care is insurance company-regulated health care,” she said. “That’s certainly not my choice.”

Badley, the lobbyist, said he believes most people are pleased with the service they get under managed care. Others are finding it an adjustment.

“If people choose managed care, it’s cheaper,” he said. “But then all of the sudden they can’t do exactly what they want and it’s buyer’s remorse I guess.”

, DataTimes MEMO: This sidebar appeared with the story: HEALTH CARE BILLS A sampling of consumer-oriented health care bills before the Legislature: SB 6119 Allows consumers to buy prescription drugs at the pharmacy of their choice, without restriction or penalty by their medical insurance company. SB 6278 Controls medical insurance rates for individuals buying insurance on the open market, rather than as part of a small group or through their employer. HB 2247 Requires insurers to disclose whether benefit plans include incentives or penalties that encourage doctors and other health care providers to withhold services or referrals. HB 2486 Prevents gag orders in insurance plans that block doctors from discussing treatments with patients, being an advocate for their patients in getting payment from an insurer, or discussing comparative merits of health plans. HB 2885 Requires insurers to disclose the percentage of total revenue spent on administration, advertising, promotions, facilities and health care provider services to patients. Also requires hospitals to disclose salaries and fringe benefits for their 20 highest-paid administrative positions, the name of each corporation related to the hospital, and a breakdown of the hospital budget. SB 6120 Forbids insurance companies from making new mothers leave the hospital less than 48 hours after vaginal delivery or 96 hours after Caesarean section.