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 ike used-car salesmen,
politicians in Washington have taken the flawed, old model of the
Patients' Bill of Rights and
slapped a new sticker on it to try to fool unwitting buyers.
The legislation has always been a clunker. It did not sell last
year, or the year before that, or the year before that. But it has
been reborn this year in the Senate, with a few cosmetic changes,
and given a new name — the Bipartisan Patient Protection Act
of 2001. This new legislation deserves the same fate as its progenitors.
The new hucksters are Senators Edward Kennedy (D., Mass.) and John
McCain (R., Ariz.). The new sticker does not disguise the reality
that this highly flawed piece of legislation would lead to more
litigation in both federal and state courts, and to larger damages'
awards, thus driving up the cost of insurance and causing millions
of Americans to lose their health insurance altogether.
The myriad salesmen for patients'-rights bills have been hawking
the new legislation so that people can sue their HMOs. But the fact
is that people already can sue their HMOs. The real issue is what
kind of damages they can recover if an employer-sponsored health
plan wrongfully denies them coverage.
Current federal law permits patients to recover only the value of
the denied benefit. Under the new Kennedy-McCain bill, damages awarded
in federal court would be capped at $5 million. However, even if
a health plan exercised "ordinary care" in making a decision about
whether or not to cover a certain medical treatment, a claim that
it had wrongfully denied coverage could go to state court if it
involved a question of "medical necessity."
Once in court, disputes over coverage would be decided under local
laws, which would mean that juries could award as much money in
damages as allowed by the state.
Health plans would then be exposed to massive judgments when a jury
decides — in hindsight, after an injury has occurred —
that a patient was denied a medically necessary treatment, even
though the treatment might have had a very low chance of success
to begin with, and even though there is no clear meaning of what
the term "medically necessary" means.
To resolve these questions, states are likely to import the full
panoply of tort law into what are essentially basic contract
| “If
consumers had more options, lawsuits would become less
prevalent.” |
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questions. This means that a plan member would be able to recover
not only the cost of denied care, but also any economic losses that
are deemed to have been caused by the denial of coverage (such as
lost wages), plus non-economic damages (such as pain and suffering,
loss of consortium, and hedonic damages), and punitive damages intended
to punish the plan for its allegedly high-handed actions.
And no matter how many assurances are offered to the contrary, disgruntled
workers are free to launch separate lawsuits against their employers
for having selected the health plan in the first place.
Allowing these new types of recovery and large judgments in coverage
cases will increase the cost of insurance, lead some employers to
drop coverage altogether, and increase the number of uninsured —
just so a few aggrieved patients may recover jury awards far in
excess of their actual economic loss and suffering.
People who get their health coverage through their jobs generally
have few if any choices when it comes to health plans. Either they
take what their employer offers, or they do without. That doesn't
sit well with consumers who are used to a multitude of choices in
virtually every other sector of the economy.
In an ideal world, people would be able to choose their health plan
from a wide variety of offerings, and, if they were dissatisfied,
simply switch to another carrier. But since they are trapped into
the plans selected by their employers, political activism and lawsuits
provide their principal recourse. If consumers had more options,
lawsuits would become less prevalent.
But if legislators are intent on passing some legislation, there
is a middle ground. Rather than turning the question over to state
law, the legislation could change the existing restrictions in federal
law in order to provide a fair remedy.
Instead of trying to encourage more litigation, as Kennedy-McCain
legislation would do, the better approach would be to equip patients
with more power and more choice.
There is only one way to give patients effective and meaningful
rights — by giving them greater control over their own insurance
policies, affording them the ability to select their own insurer,
and granting them the right to change insurers if they are not satisfied.
Patients crave more power, not rights.
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