Copyright 1999 Times Mirror Company
January 22, 1999, Friday, Home Edition
SECTION: Part A; Page 3; Metro Desk
LENGTH: 880 words
CALIFORNIA AND THE WEST;
JURY'S HUGE AWARD IN HMO CASE RENEWS DEBATE
ON PATIENTS' RIGHTS;
HEALTH CARE: THE $120-MILLION JUDGMENT AGAINST
AETNA MAY FORCE THE INDUSTRY TO EXAMINE ITS POLICIES AND FUEL THE DRIVE TO LET
MORE PATIENTS SUE.
BYLINE: JULIE MARQUIS, TIMES STAFF
The stinging $120-million
verdict by a San Bernardino County jury against Aetna U.S. Health Care of
California may force introspection among HMOs nationwide and heat up the debate
over patients' rights to sue them, attorneys, legislators and experts said
"This will move the whole debate over HMO accountability back
on the front burner," Robert Blendon, a Harvard University health policy expert,
said of Wednesday's verdict. "It's going to alarm the public more. . . . But on
the other side it's going to mobilize the employer community," which fears that
such large verdicts--though rare--could push up premiums.
record-breaking judgment against the subsidiary of the nation's largest
managed-care organization crystallizes public outrage against HMOs, and could
force insurers to consider internal reforms--if only to save money and avoid
more drastic legislative action, experts and consumer advocates said.
"The beauty of it is that a verdict like this can actually change
industry practices," said Jamie Court, director of Consumers for Quality Care, a
group pushing for managed care reform.
verdict resulted from the lawsuit of a Yucaipa schoolteacher whose husband, a
deputy district attorney, died of a rare and fast-moving stomach cancer. The
widow, Teresa Goodrich, claimed that Aetna repeatedly denied or delayed approval
for David Goodrich's care in the 2 1/2 years before he died, forcing him to seek
unauthorized treatment outside Aetna's network.
Aetna officials say they
did nothing wrong and have vowed to "vigorously appeal" the case.
feel great sympathy for Mrs. Goodrich's loss," Tom Williams, president of Aetna
U.S. Health Care of California, said Thursday. "The loss of her husband is
unfortunate, but when you look at all the facts, we believe that we acted
fairly. Obviously, the jury didn't agree."
Even some industry insiders
acknowledge that the case is a warning to companies to review their grievance
procedures and the information they provide to patients about their rights. The
Goodriches, for example, were never informed that Aetna had an "exclusion" for
experimental procedures, their lawyer said.
"HMOs should have very
well-defined and well-developed grievance procedures that afford their members
the ability to have due process," said Janet Craig, a Kentucky health care
attorney who represents HMOs and who is former general counsel in that state's
Department of Insurance. "If they don't have these procedures, these cases of
big awards should serve as a wake-up call."
Williams said Aetna had the
kinds of grievance procedures Craig is referring to at the time the case arose
but that the Goodriches did not use them.
As for whether the company
would do some soul-searching in the wake of the verdict, he said Aetna already
made substantial changes following another large verdict in 1993--when the
family of Nelene Fox, who died of breast cancer, won an $ 89.3-million award
from Health Net in Riverside County.
But Williams said the company will
continue to consider changes. "Any opportunity that we have to evaluate
ourselves, we do it," he said. He cited the company's recent decision to allow
its members access to external review by independent physicians.
and many others in the managed care industry say litigation and large awards can
be avoided if solid grievance procedures, including external review, are
implemented and followed.
The hottest debate will probably involve
expanding consumers' right to sue. The Goodrich case--and another $ 13.1-million
verdict against Humana Health Plan in Kentucky--point up what some consider a
huge disparity in consumers' right to legal redress.
The only reason
Teresa Goodrich could obtain substantial damages from Aetna is that her husband,
a public employee, was exempt from a federal law that keeps most consumers with
employer-based insurance from taking their insurers to court.
greatest fear of many insurers--and employers--is that changes in the federal
law, known as ERISA, will cause lawsuits such as Goodrich's to
multiply--increasing the cost of health care and eroding profits. Many
Republicans in Congress argue that the true beneficiary of such changes would be
trial lawyers. With some exceptions, the Republicans tend to favor external
But patients' attorneys and several Democratic legislators say
lawsuits--or the threat of them--is the most effective way to keep
profit-seeking insurers from denying patients necessary care to save money.
"The whole purpose of punitive damages in this Goodrich case and in
others is to stop this egregious conduct which leads to these awards in the
first place," said William Shernoff, whose firm represented Teresa Goodrich. "If
this company Aetna and others will heed the message, there will be no more of
Some Democratic legislators expressed hope that the
Goodrich case would give a boost to managed-care reform
"I think it will be enormously helpful," said U.S. Rep.
John D. Dingell (D-Mich.), co-sponsor of the House "patients' rights" bill and
the ranking Democrat on the Commerce Committee, "not just with the bill but also
with the HMOs who need some assistance in developing a ripe conscience."
LOAD-DATE: January 22, 1999