The backlash against managed care

Nation's Business, July, 1998 by Stephen Blakely

Another approach, under development by House Ways and Means Committee Chairman Bill Archer, R-Texas, would create tax incentives for the uninsured to buy health insurance.

In addition, both the health-insurance industry and private employers who purchase services are working to address patients' complaints about the quality of managed care. And late last year, the managed-care industry launched its own initiative, called "Putting Patients First," to improve patient relations and trust.

On Capitol Hill, where the politics of health care cut across ideological lines, the fate of health-mandate legislation remains unclear.

Congressional Democrats, who never abandoned proposals for major changes in the health-care system after the defeat of President Clinton's national health-care plan in 1994, see their Patients' Bill of Rights Act as an election-year winner.

Republican leaders, under pressure from other GOP lawmakers to pass health man date legislation such as PARCA, have created special working groups in the House and Senate to wrestle with the issue.

House Speaker Newt Gingrich, R-Ga., has acknowledged the Republicans' political difficulty in opposing PARCA because of voters' anger at managed care. Addressing the U.S. Chamber in February, he said, "I don't think [patients' rights] is something we're going to be able to walk away from because of too many complaints from too many places."

The divisions in Congress also are reflected in public-opinion polls: Consumers seem to favor more power over managed-care plans, but they don't want to pay for it. A Kaiser Family Foundation/Harvard University poll in January found that 52 percent of those surveyed said the government should protect consumers of managed care, but 40 percent also said such intervention would not be worth the resulting costs.

Employers--who pick up most of the tab for the $110 billion-a-year managed-care industry--and workers alike have a huge stake in how the health-care debate in Congress is resolved.

Stratco's Graham, who raised the lone objection on the president's health-care commission last fall, says it's not too late for small-business concerns to prevail. But for that to happen, she notes, more business owners need to bring their practical, realworld experience to the debate, and more workers need to pay attention to how they will be affected by the debate's outcome.

"The more I've read and talked to other business owners," Graharn says, "the more I wished I'd become involved in this issue earlier."

[ILLUSTRATION OMITTED]

RELATED ARTICLE: Types Of Health-Insurance Plans

There are four major types of health-insurance plans on the market. Here's how they differ:

Conventional Health Insurance. Under these arrangements, also known as "fee-for-service" or "indemnity" plans, those enrolled go to doctors of their choice and generally must pay a certain amount of health-care costs themselves--the "deductible"--at which point insurance reimbursements begin.

They also must pay "co-insurance"--a portion of the overall costs--beyond the deductible; typically 80 percent is paid by the insurance company and 20 percent by the patient. Health-care providers are paid on a fee-for-service basis.