Case Overview, Managed Care Reform / Patients' Bill of Rights

This document provides background information and summarizes the debate over managed care reform / the patients' bill of rights. The links to the left will lead you to public documents that we have found.

           Medical costs have been rising sharply for decades and trying to restrain this trend is a constant struggle for providers, insurers, and employers who offer insurance to their workers. Pressure has grown on government to find regulatory means of reducing costs, while insuring quality care and broadening access to care. In short, government is expected to do the impossible: cut costs while giving people more care and better care.

           As pressure to hold costs down grew the health care industry responded with new or expanded efforts. Principal among these were HMO's (health maintenance organizations), managed care plans, various economies of scale (including mergers and acquisitions), tighter oversight over medical procedures, and restricted access to specialists. In theory, such cost-saving procedures would work to the advantage of consumers, too, by reducing their insurance premiums as costs dropped. In practice what savings materialized for consumers were masked by rising premiums that continued to be driven upward by escalating costs that far exceeded savings squeezed out of the system.

           What also happened to consumers, especially those enrolled in HMO's and managed care groups, is that they encounter more cumbersome procedures in dealing with their providers. For example, getting your medical plan to agree to a referral so that you can see a specialist can be quite cumbersome. Obtaining clearance for an expensive set of tests can also be difficult-and emotionally taxing to someone who is anxious about his or her medical condition. Frustration mounts easily when individuals attempt to navigate the phone maze of their insurance company, trying to find someone who can authorize a payment or an appointment with a specialist.

           Consumer anger at the health care system led to repeated calls for a Patients' Bill of Rights. The Clinton administration, rebuffed in its proposed extensive overhaul of the American health care system during his first term, was attracted to a patient bill of rights as a way of addressing at least some of the same issues it had hoped to fix earlier. By 1999 the patient bill of rights had gained a certain amount of traction and was being treated seriously in the Congress. Among the major provisions supported by Clinton and many other advocates was easier access to specialists and strong and timely resolution to grievances brought by those with a medical problem. If, for example, one needed an answer as to whether a procedure would be covered by his or her insurance policy, that person would get an answer quickly.

           One of the leading proponents of patient bill of rights was Charlie Norwood (R-GA), who was a dentist before he entered the House of Representatives. His bill gained considerable support and a compromise with the Democrats seemed likely to pave the way for successful legislation. As his bill gathered strength, however, Norwood was pressured by Republican congressional leaders, under pressure themselves from large insurers and corporations who were worried that their costs would go up. One lobbyist representing a coalition of business interests said their position was an unabashed "commitment to the marketplace and less government regulation, allowing health care plans and the health care industry to compete to increase the quality of health care whether through new drugs, research, or competition between plans and hospitals."

           Norwood scaled back his plan and Clinton, weakened by a sex scandal and the ensuring impeachment proceedings, was unable to resuscitate a robust patient bill of rights. It died an unceremonious death as the Clinton presidency approached the end. No second opinion was necessary.