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 A Reporter's Guide To Health Care


Some members of Congress are promoting legislation to mandate a one-size fits-all health care system that dictates the type of health care coverage Americans receive from their employers, health plans, and providers. 

The stated intention of these mandate bills is commendable: improving the quality of health care for all.  The health care system has changed dramatically in the past decade.  That change hasn't been even. The unevenness of some aspects of health care delivery has caused discomfort, and those problems have been very real for some.  But government mandates aren't the solution.  One bill laden with mandates – the so-called "Patients' Bill of Rights" – would have the following impact: 

  • Health insurance premiums will increase by as much as 39 percent and caue 4.5 to 7.8 million Americans to lose their health insurance.  (Milliman and Robertson)
  • Every time a mandate raises the cost of insurance by one percent, some 200,000 to 400,000 Americans lose their coverage (Congressional Budget Office and Lewin Group Study)
  • Nearly half of small employers would likely drop health insurance coverage if this legislation drives their premiums up 20 percent or more.  Additionally, 57 percent of small employers would likely drop insurance coverage for their employees if medical liability is expanded. (Public Opinion strategies study by Bill McInturff)
  • To implement and enforce these mandates, a minimum of 3,828 new full time federal employees would be needed and a minimum increase of $155,294,304 in annual appropriations to the Departments of Labor and Health and Human Services would be needed. (Multinational Business Services, Inc.)



Health care mandate legislation drives up the cost of health insurance for families and employers, causes employers to reduce benefits, increase the number of Americans without health insurance, and leads to the type of government-run health care system rejected in 1994.



The Patients' Bill of Rights Act and some other health care mandate legislation would require health plans to pay for any service ordered by treating physicians that they believe is "medically necessary," as long as it is consistent with "generally accepted principles of professional medical practice."

The "medical necessity" provision will:
Harm patients – Studies show that American health care quality has historically been dictated more by where you live than by scientific evidence or what is best practice medicine.  For instance:

  • A patient is 33 times more likely to have breast-conserving cancer surgery in parts of Ohio than parts of South Dakota
  • Only 20 percent of all physicians practice evidence-based, best practice care. 
  • Forty percent of medical procedures have no scientific, demonstrable benefit. 

Stop the quality revolution – Today, with information technology and research on treatment outcomes, health plans help encourage best-practice medicine.  Reviewing and monitoring doctor practices has brought about dramatic improvements in the quality of care:

  • HMO members are 2.5 times (80 percent) more likely to receive life-saving Beta blockers after a heart attack than those in fee-for-service plans.
  • HMO members are 2.5 times more likely to receive ACE inhibitors for congestive heart failure than a person in traditional fee-for-service medicine. 

Cause costs to skyrocket and loss of coverage – This provision could cause employers to pay as much as $929 more in health insurance per worker, workers to lose $1,124 in wages, and 1.4 million people to become uninsured.  (Barents Group, 1998)



Let the quality process continue to develop and move forward within the delivery system.  Medical innovation cannot be legislated.  Innovation in health care, like in all endeavors, comes from competition.  When government attempts to define quality with regulation, it freezes in place today's best practice. 



Supporters of the Patients Bill of Rights assert that the 1974 ERISA law protects health plans from being sued for malpractice.  That assertion is false.

Fifteen times since 1995, federal courts have ruled that HMOs may be held liable for medical malpractice.

  • The Supreme Court's landmark Travelers decision in 1995 significantly narrowed ERISA's preemption of state law. 
  • Federal district and appellate courts since have ruled no less than 15 times that ERISA doesn't shield HMOs from medical malpractice liability under state law. 
  • The opinion in the Pacificare case is typical: "Just as ERISA does not preempt the malpractice claims against the doctor, it should not preempt the vicarious liability claim against the HMO . . . ."

The Clinton administration has contradicted itself on the liability issue. 

  • President Clinton implies in his statements that HMOs can't be sued because of ERISA.  For example, he said July 16, "Some people will say to us . . . we'll be for all the substantive positions in [the Patients' Bill of Rights] . . . as long as you don't give patients a right to sue. . . . "
  • Meanwhile, his own Secretary of Labor has filed amicus briefs in eight court cases arguing that ERISA does not preempt medical malpractice claims against HMOs
    – The Department of Labor's solicitor's office states unequivocally in a memo, "Medical malpractice claims against HMOs are not preempted by ERISA."


The assertion that HMOs are immune from being sued is false.  In at least 15 Federal court decisions over the past three years, the courts have ruled that the federal ERISA law does not block patients from suing HMOs for medical malpractice.  The Patients' Bill of Rights would expand liability to coverage decisions made by health plans, and to employers themselves.   Every medical dollar should go toward medical services, not to lawyers and bureaucrats.



One provision in the Patients Bill of Rights would require health plans to accept the services of any willing provider, whether or not that provider belonged to a given network.  The criterion for receiving payment for services would be that the provider had been licensed in that state. 

"Any willing provider" mandates would raise health care costs, leading to more uninsured Americans.

    Consumers and employers would pay as much as 8.6 percent more for health coverage because of this mandate. 

HLC Position

"Any willing provider" provisions would make it difficult, if not impossible to operate an HMO, PPO, or any kind of integrated delivery network because they would not be able to ensure high quality providers.  "Any willing provider" would return us to the costly fee-for-service world where every provider gets paid, without regard to quality of care practiced. 



One option Congress may consider as part of potential "patient protection" legislation is to require that employers provide a point-of-service option.  Mandatory POS would be government requiring a particular form of coverage under employers' voluntary action – offering employees health benefits. 

Mandatory POS will raise health costs by an estimated three to 11 percent, according to a Coopers & Lybrand analysis. 

    Every one percent increase in health coverage costs cause up to 400,000 Americans to lose their health benefits. 

If employers are required to offer a health plan with an open panel, some employers – especially small businesses, which are the least likely to offer health insurance benefits – might decide not to offer health coverage at all. 

    Of the eight percent of workers who are offered only HMO coverage, more than half work in companies with fewer than 200 employees. 

HLC Position

Employers provide employee health benefits voluntarily.  Congress shouldn't treat a voluntary fringe benefit as though mandatory coverage would have no effect on the employer-based benefit system.