CAMBRIDGE, Mass. -- The Congressional debate over a patients' rights bill has mostly concerned the right to sue managed care companies: the Kennedy-McCain bill makes this right more expansive than the Frist-Jeffords bill does. That debate misses the point. Either bill, or any similar one, will make a bad situation worse.
I say this despite the fact that I am no fan of managed care and would like very much to see medical decisions restored to patients and doctors. But a patients' rights bill will not do that. It will just hasten the collapse of managed care without putting anything in its place. The result will be an increase in the number of uninsured Americans and more out-of-pocket expenses for those who are insured.
Most Americans get health insurance through their employers, who pay managed care companies fixed amounts to cover their workers. These insurers have a strong incentive to scrimp on medical care — placing limits, for example, on hospital stays, emergency room use and specialist care — since they can keep whatever is left for profits and overhead. If a patients' rights bill works as planned, this scrimping will be harder. Besides allowing suits, all bills provide other protections, including the right to appeal denial of care and easier access to emergency rooms. All of this will add costs that will be passed along to the people who pay the bills — mainly employers and workers.
We have already had a foretaste of this effect. During the past couple of years, workers have begun to demand that employers choose less restrictive managed care plans, and many employers complied because during a period of full employment they were competing for workers. Legislatures also passed some limited patient protection bills, including Congress's measure requiring that at least 48 hours' hospitalization be offered for childbirth. Sure enough, partly because of the loosening grip of managed care, premiums — which had remained stable during the mid-90's — began to rise rapidly. Last year, they grew by more than 8 percent while inflation overall was about 3 percent. This year, they are predicted to rise even faster.
What many Americans don't realize is that our employment-based health care system is entirely voluntary. Employers do not have to offer health benefits at all, they do not have to pay the full costs when they do, and workers do not have to accept benefits. If premiums get too high, employers will either drop health benefits or cap their contributions, leaving more for workers to pay. Workers will become more likely to refuse altogether whatever health benefits are offered (about a fifth turn down benefits now because they can't afford their share of the premiums).
We have had a foretaste of this, too. Employers used to pay, on average, about 80 percent of the cost of an employee's health insurance. Now, with prices rising, many contribute only a set dollar amount, so that as prices continue to increase, workers will pay larger shares. The fundamental problem is that it is impossible to regulate a strictly voluntary system. Attempts to do so lead to the paradox of less rather than more coverage.
Patients' rights bills illustrate the main problem with incremental approaches to the failures of managed care. They have unintended consequences because they deal with the effects, rather than the underlying causes, of the system's failures. They do not change the perverse incentives that pit the economic interests of managed care companies and employers against the health needs of patients, and they do not reduce the huge overhead expenses, many of which are directed toward limiting services.
It is becoming apparent to nearly everyone that our experiment with private managed care has failed. The system is imploding, and a patients' rights bill, by increasing costs, will accelerate its demise. High time. But without anything in its place, many Americans will be left without adequate health coverage during the system's death throes. We need to begin now to put something in its place.
The answer is a single-payer system that covers everyone and more efficiently uses the resources we allocate to health care. That is tantamount to extending Medicare to all Americans. Medicare is not perfect, but it provides a uniform set of benefits to nearly everyone who qualifies, and it does so far more efficiently than the private employment-based system. Extending and improving Medicare would be simpler and more realistic than trying to shore up a fundamentally irrational system by measures like patients' rights bills.
Marcia Angell, senior lecturer in social medicine at the Harvard Medical School, is former editor in chief of The New England Journal of Medicine
Copyright 2001 The New York Times Company