Inside HMOs: Industry reaction to regulation
From CNNfn Financial Correspondent Kelli ArenaJuly 16, 1998
Web posted at: 6:20 p.m. EDT (2220 GMT)
WASHINGTON (CNN) -- Kaiser Permanente is the largest and oldest managed-care company.
It consistently wins praise from both consumers and watchdog groups, and its executives support efforts on Capital Hill to reform the managed-care industry.
"I think that when the patient goes to the doctor, he or she will know what kinds of rights are there," said David Lawrence of Kaiser Permanante. "I think it will make sure that the doctor and the patient have a very good working relationship."
But Kaiser is a not-for-profit institution. Other for-profit managed-care companies are fiercely opposed to government mandates, which they say will raise costs.
"The Achilles heel here for the discussion is cost," said Karen Ignagni of the American Association of Health Plans. "What happens in terms of what working families are required to pay?"
Those two drastically different views illustrate why industry players say "one-size-fits-all-government-mandates" won't work.
Legislative proposals would mandate everything from providing more access to specialists to allowing patients to sue their health care providers.
"I think for the industry, it is also the most significant because it has the potential -- if litigation gets out of control -- to really increase costs a lot," said Larry Levitt of the Kaiser Family Foundation.
Just how much costs would rise is a matter of much debate. But even a modest increase could drive customers away.
Business groups say employers may decide that providing health care as a benefit for workers isn't financially feasible.
"We will actively encourage our members to stop providing health care as a voluntary benefit because it makes no sense," said Bruce Josten of the U.S. Chamber of Commerce.
The original goal of managed care was to curb the double-digit rises in health-care costs back in the '80s. But financial experts say new reforms could undo that progress.
"There's a very real chance that if we have aggressive regulation of this industry, or if we pass a bunch of unnecessary rules, that you will see health-care cost trends go back to the level that we saw 10 or 15 years ago," said Todd Richter of Morgan Stanley Dean Witter.
Even if legislation does not pass, the political attention has prompted the industry to try to raise the quality bar.
"Access to an emergency room, if they reasonably believe they should go, they should go and be paid for appeals," Ignagni said. "Making sure that an individual that has a concern, a complaint, a grievance -- it needs to be handled expeditiously."
Back to the top
© 2000 Cable News Network. All Rights Reserved.
Terms under which this service is provided to you.
Read our privacy guidelines.