The Common Good
September-October 1998

Mismanaged Care

by Gordon Bonnyman | September-October 1998

The HMO system cries out for reform.

Four years ago, the country was on a course leading to ever increasing commercialization of health care, rising numbers of uninsured, and a deteriorating health care safety net for vulnerable populations. Congress took a look at the road ahead...and stamped on the accelerator. The resulting crisis poses difficult dilemmas for all who cherish a compassionate vision of health care.

American health policy has always been distinguished by its treatment of health care as primarily a commercial good, to be bought and sold like other market commodities. (In all other industrialized nations, health care is regarded more as a social good, like public education or fire protection, to be afforded the whole population.) Therefore, despite the fact that the health care industry is more heavily subsidized by government in the United States than in Britain, we tend to regard government regulation of the industry as illegitimate interference with private markets. This muddled public perception has repeatedly thwarted efforts at reform.

In 1994, President Clinton's Health Security Act died an ignominious death in a Democratic Congress, as tepid popular support was easily overwhelmed by entrenched financial interests. Corporate America, having blocked government action, is itself transforming the health care system. The scope and depth of change has been largely overlooked by the media, which tend to focus on government policy debates and underestimate the public effects of private economic decisions. Change is occurring through the growth of for-profit managed care, conversion of public and non-profit health resources to for-profit ownership, and the consolidation of health care providers into ever larger corporate entities. The health industry is booming as never before: Last year was the most profitable ever for the hospital industry.

Health care, on the other hand, is not faring so well. The public health infrastructure is eroding, health care professionals have less autonomy to deliver the care their patients need, and communities are losing control over local health resources to corporate chains accountable only to their stockholders. Meanwhile, there are now 41 million uninsured Americans—an especially ominous trend because it is occurring during a period of low unemployment, portending even worse news during the next recession.

The answer from politicians is to pour gasoline on the fire. Despite the fact that the federal government is projecting huge budget surpluses—far more than would be required to fund a prudently designed program of universal health coverage—the Republican leadership is proposing to cut billions of dollars from Medicaid and Medicare. Democrats in the White House and Congress, still nursing their wounds from 1994, are not about to talk about fundamental reform. A modest administration proposal to impose limited consumer protections on health insurers and HMOs faces tough sledding in Congress.

What, then, are we to do? The following principles may provide part of the answer:

  • Avoid nostalgia for "the good old days." Some imply that we need only reverse the trend to managed care and all will be right with the world. In fact, the fee-for-service system that predated managed care had its own problems. Managed care can be socially beneficial, but only if properly designed and implemented.
  • Stay close to the victims. Some of what is advertised as "consumer protection" is, in fact, designed merely to restore the financial privileges of health care providers. The test of any "reform" should be whether it really benefits patients, especially the uninsured and others denied adequate care.
  • Become involved at the state level, which is where health policy increasingly will be made.

Even in these difficult times, there are practical opportunities to ameliorate conditions for at least some of the victims of the present system. Consumer protections, including effective appeals procedures, need to be established—the Consumer Bill of Rights now pending in Congress is a good first step. Companies must be made accountable—when HMOs override doctors' orders and patients are hurt as a result, the HMOs should be liable. Public programs, including Medicare and Medicaid, must be defended. So must public hospitals, clinics, and other community-based providers. Finally, long-term care must be reformed. Government subsidies for nursing homes—currently some $30 billion a year—should be reoriented into social services to sustain the frail elderly and disabled in their own homes.

The good news is that voters are increasingly uneasy about the mercenary motives shaping the system. There's a danger that this skepticism will develop into cynicism and a further "I'll get mine, you take care of yourself" rejection of mutual support and responsibility. The hope is that healthy skepticism can be nurtured into support for public solutions to problems that affect us all.

GORDON BONNYMAN is an attorney with the Tennessee Justice Center in Nashville.

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