back to Jacksonville Medicine (August 1998)

Editorial

A Nice Beginning Michael J. Bernhardt, M.D., Editor, Jacksonville Medicine

There is currently a debate occurring in the nation's Capitol that may affect all of us in terms of how we practice, how our decisions are implemented, and how these decisions are payed for. In 1974 a law called the Employee Retirement and Security Act was passed. ERISA was originally designed to insure that administrators for pension plans and employee health insurance plans wouldn't "take the money and run." Obviously, judging from the financial health of some of the managed care companies that we are all beholden to, the law has worked well. In 1974, the only major managed care system was Kaiser, and most physicians in practice then were using the traditional indemnity model. Roll the video tape forward to 1998 and most of us in practice have some level of tithing to a managed care delivery system. Managed care delivery systems make money by cutting back on their outflow. Where are their financial outflows? Drugs and procedures. Why is this important to us?

When a patient in a managed care plan has been denied care that may affect their longevity, and that person or their family sues, it has been found that the health insurance organizations are shielded from paying compensation for lost wages, death, disability, pain and suffering, emotional distress, etc. The ERISA law allows that the patient can only recover the potential benefits lost.

In a recent New York Times article by Robert Pear, several federal judges demonstrated cases where patients would normally have been entitled to damages, but were unable to claim. To wit: A St. Louis man's physician recommends surgery ... approval is denied ... patient dies. In Cincinatti, a utilization review company refuses approval for psychiatric care ... patient commits suicide. The U.S. Court of Appeals for the Ninth Circuit, in San Francisco, ruled last month that an insurance company did not have to surrender money it saved by denying care to a Seattle women who later died of breast cancer.

Because of cases like this, Congress is debating modifications in the ERISA that would require some degree of accountability on the part of those making the authorization decisions at the managed care level. Fundamentally, should the medical director of a managed care organization have the same level of medical-legal risk that physicians "in the field" do? Should the health insurers be able to fall back on the line of reasoning that "we are not telling you how to practice medicine, only what we will pay for?" Should the decision maker at the corporate level, who chooses a restrictive care plan for his corporate organization, bear some degree of medical-legal responsibility for outcomes related to panel restriction and limitations in care? In other words, will the corporate controller be sued because the physicians on the insurance panel of the HMO he chose for his company failed to send a patient for an x-ray, and a lymphoma was missed?

On the first question, I think that it will be inevitable that some degree of medical-legal accountability for managed care decision making will occur. In the current era of managed care, if the insurer doesn't pay for it, "it ain't gonna happen." Clearly, the cases pointed out above are extreme examples, and are not representative of what we in Jacksonville have to continually deal with. Fortunately for our patients, most of the organizations we deal with here are patient and outcome oriented and handle their role in the health care process with a high degree of responsibility. However, there will eventually be some body of law that will hold managed care companies legally responsible for withholding care, and that this body of law will strike down some of the code words used to avoid care delivery, such as "experimental." While most physicians would probably be delighted to see the big insurers skewered, as physicians have been skewered over the years, a word of caution should be noted. (1) Without the role of the managed care delivery systems, a lot of people would not be able to afford health care. (2) Most of us have signed contracts that stipulate that our obligation of delivering care to the patient remains in effect, regardless of the financial health of the managed care company. And (3) If in fact the trial bar is successful at piercing the ERISA shield, watch for the insurers to be more stringent in maintaining the viability of "hold harmless" clauses. Ultimately, this would still pass the financial buck back to the practicing physician.

Constructive criticism of managed care has been misinterpreted by the public, and especially the media, as condemnation of managed care. One cannot improve a product without recognition of its shortcomings. Correspondingly an organization cannot improve itself without acknowledging its own shortcomings. In the past, the knee jerk response of the insurance industry of any criticism has been a knee jerk "this will raise costs and make the product undeliverable". Events have shown that this is not to be the case (direct access to dermatologists for starters).

Adopt the Patients' Bill of Rights, eliminate the "hold harmless" clause and eliminate capitated contracts.

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