Repair, Don't Merely Bandage, Health Care
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Read Making a Killing

home / healthcare / in the media

Los Angeles Times
Dec 27, 2001

by Jamie Court

Repair, Don't Merely Bandage, Health Care

Another year has passed without solutions for a health care system that increasingly has given grief to all its stakeholders except the HMOs and insurance companies that control it.

Finding real answers will require new thinking by the system's participants--patients, doctors, nurses, hospitals and employers.

First, clear-cut government oversight is essential--and currently lacking. No single state entity is charged with coordinating the managed health care system. Separate agencies that don't communicate with one another are charged with regulating the HMOs, doctors, hospitals, traditional insurers and pharmaceutical benefits managers. Such scattershot regulation leaves gaping holes that patients in need of critical care regularly fall through. Complaints bounce around among the state medical board (for doctors), the Department of Managed Health Care (for HMOs), the Health and Human Services Agency (for hospitals) and the Department of Insurance (for traditional insurers).

Savvy corporations seek and find refuge in these gaps. Kaiser Foundation Health Plan argued that a $1.1-million ruling against it by the Department of Managed Health Care is invalid because the problems are the responsibility of the medical board. If private entities are to effectively manage care, one public entity must have the authority to manage them.

Second, containing costs and maintaining quality of health care are, in fact, compatible goals. The HMOs used this same argument to seize power, claiming they would institute preventive health care and treat patients before their diseases became expensive. Instead of doing that, they became penny-wise and pound-foolish. When caught, they switched their blame to consumers: It was "consumer demand" that drove up premiums, not the HMOs' skimping.

The bottom line: Eliminating obstacles to preventive care saves money. This includes finding ways to perform such services for the uninsured, who too often are treated in the far more expensive emergency room.

Third, managing costs should be an overt goal of the health care system rather than a covert goal of managed care. This means evaluating the efficacy of the 20 cents of every premium dollar that many HMOs take for overhead and profit. This should be a common cause for employers who face double-digit premium increases, patients confronting larger co-pays and deductibles, and doctors and hospitals struggling to survive.

The companies that insure our homes and cars are required to get state approval for every rate increase and policy change before they take effect, and the public can contest the changes at hearings. A similar process should govern insurance for our lives and health.

Fourth, employers must get their head in the game. Almost 80% of the executives surveyed this fall reported that "HMOs and insurance companies" were "very responsible" for "the problems in the current health care system"--the most to blame. Yet lobbyists for businesses have traditionally resisted major health care reforms.

It's time to put aside the tired paradigms--public versus private, cost versus quality, consumer versus employer--that have frustrated reform in the past and build a better system by pragmatically solving common problems.

Jamie Court is executive director of the Foundation for Taxpayer and Consumer Rights.

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