Benjamin O’Connor

October 6, 1999

11.002 Paper 1

 

Patients’ Rights

 

On Capitol Hill, both Republicans and Democrats are pushing for various versions of  “patients’ rights” legislation.  Opponents of some of these measures claim that by allowing people to sue their Health Management Organizations (HMOs), the increased cost of lawsuits and insurance will drive up premiums or drive some HMOs out of business entirely.  This argument, between the doctors and patients and the HMOs, is essentially one of liberty, equity and security vs. efficiency.  The proponents of patients’ rights say that people have a right to sue their health care providers and to hold them accountable.  They say that HMOs should still offer a reasonable level of care, despite their lower cost as compared to more expensive and less restrictive health insurance programs.  Opponents, however, argue that the courts would be entangled with frivolous lawsuits and the increase in costs to the HMOs would make health care unaffordable for some people. 

The most common types of managed care organizations are “preferred provider organizations” (PPOs) and  “health management organizations” (HMOs).  Managed care usually involves three key things: oversight of the medical care given; contractual relationships and organization of the providers giving care; and the covered benefits tied to managed care rules.  Managed care began as a minor presence in 1929, and the advent of KaiserHealth Plan during World War II, with clinic based systems. The Medicare and Medicaid Acts in the 1960’s helped fuel a continuous explosion in health care costs, and managed care was seen as one solution. The HMO act of 1973 paved the way for growth, and conversion of HMOs to publicly held companies in the 1980’s and 1990’s supplied capital to accelerate growth.  An HMO is a group that contracts with medical facilities, physicians, employers and individual patients to provide medical care to a group of individuals. An employer, at a fixed price per patient, usually pays for this care. Patients generally do not have any significant "out-of-pocket" expenses.  Therefore, HMOs are a low cost alternative for patients and employers to higher cost standard care health insurance programs. 

The catch, however, is that an HMO is usually a for-profit corporation with responsibilities to its stockholders that, according to many, take precedence over its responsibilities to the patients.  Because of this, some claim that HMOs offer a lower standard of health care than standard care insurance providers.  Many HMOs limit their subscribers to selected hospitals and physicians where they have arranged discounts. So, if a patient needs care when away from home, unless the situation fits the HMO's definition of an emergency, the HMO will probably not pay the bill.

Dissatisfaction with care and alleged incidents of HMO negligence have spawned an increasingly heated debate in congress and state legislatures.  Many patients and physicians that feel restricted by the HMOs policies on covered medical procedures seem to be arguing that HMO policies infringe on the patients’ needs for security and confidence in good medical treatment.  They argue that just because HMO subscribers pay less, they should still be entitled to a reasonable level of medical care.  These are the cornerstones of the “patients’ rights” arguments.  Some forms of patients’ rights bills already on the books in some states (Texas, for example), and currently under debate in congress, allow patients to sue their HMOs in the case of apparent negligence or malpractice. 

  HMO business groups and insurance companies say that passing a bill to allow patients to sue their HMOs would be a bad idea.  Insurance and HMO companies have spent millions and organized a powerful and influential congressional lobby to warn legislators that giving patients the right to sue health care organizations would open up a can of worms of frivolous litigations and rising premiums.  The Boston Globe article: “In debate on HMO suits, a Texas example” (10/3/99, A14) offers a “glimmer of evidence” as to what would happen if people were given the right to sue their HMOs.  It claims that since Texas has made HMOs open to lawsuits and malpractice, lawsuits have been kept at a minimum, and premiums have not increased as many opponents of the bill predicted. 

The opponents of a patient’s rights seem to view the problem as a problem of efficiency, in that introducing lawsuits and malpractice will tie up the courts and increase costs for everyone.  The proponents of a patient’s right to sue see it as a problem of liberty, in the patient’s right to hold their HMO accountable, a problem of equity, in that HMOs should still offer a reasonable level of health care even if they cost less, and a problem of security, in that people need to feel secure and confident in good and timely medical treatment.