National debate doesn’t resonate in California
The San Francisco Chronicle
If you put California’s patients’ bill of rights back to back with the federal one being debated in the U.S. Senate, the state’s laws definitely have the edge.
“While this whole patients’ rights debate is being billed in Washington as a big deal, in California — because we darn well enacted practically everything — it’s kind of ho-hum,” said Steven Thompson, vice president of governmental affairs for the California Medical Association, a state doctors’ group.
California already has the toughest patients’ rights laws in the country, yet there are still some ways a federal law could change the status quo.
While most Californians have had the right to sue their health maintenance organizations since Jan. 1, people whose insurance is provided by employers that use their own funds to pay health benefits are not covered by state laws. A federal law could give those employees the right to sue.
There’s also uncertainty over whether federal managed care reforms would supersede the state’s authority in a couple of key areas, namely by limiting the amount of money a patient could collect from an HMO.
Walter Zelman, president of the California Association of Health Plans, which represents insurers, said it’s not likely a federal law would have any radical effect in California unless it could make some employers vulnerable to lawsuits over health care issues: “If you make employers liable, that’s an incredibly risky strategy. I think huge numbers of employers will walk away from offering coverage.”
SENATE DEBATING 2 BILLS
The Senate is about to begin a second week of debate on patients’ rights. Proponents say a national law would protect as many as 190 million Americans in managed-care health plans — mostly in HMOs, the most restrictive form of managed care. HMOs cover about 28 percent of insured workers nationwide, but 53 percent of those in California. A new federal law would also cover people in HMOs under such programs as Medicare and Medi-Cal.
Two bills, both with bipartisan backing, are under consideration. The one supported by the Senate’s new Democratic leadership was authored by Sens. Edward Kennedy, D-Mass.; John McCain, R-Ariz., and John Edwards, D-N.C. It gives patients a range of rights, including guaranteed access to specialists and emergency room care. It doesn’t limit awards granted by state courts but puts a $5 million cap on federal punitive damages and allows unlimited awards for pain and suffering, wages and other losses.
President Bush said Thursday he would veto that bill. Instead, he backs a Republican plan, sponsored by Sens. Bill Frist, R-Tenn.; John Breaux, D-La.; and James Jeffords, I-Vt. The more restrictive Frist bill permits federal lawsuits, caps noneconomic damages at $500,000 and prohibits punitive damages.
POTENTIAL EFFECTS IN CALIFORNIA
In the wake of what’s becoming a heated national debate, California’s health care experts have been busy sifting through the nuances of each federal bill in an attempt to figure how — if at all — this state will be affected.
The bottom line: It depends on whom you talk to.
Employers and the heath plans complain the right-to-sue provisions will give a green light to trial lawyers and lead to higher premiums and fewer companies offering coverage. Consumer advocates and doctors groups say those fears are simply an attempt to derail the entire legislation.
The state’s laws are broader than the provisions of either federal bill. For example, California has established a state HMO help center, grants the right to a second opinion and establishes “continuity of care,” which gives people the right to stay with a doctor or continue a medication under certain conditions.
In addition, the California reforms have no limits on any legal damages — punitive or compensatory.
Under the Kennedy bill, there’s a $5 million cap on punitive damages in federal court. The bill does not appear to supersede patients’ rights to get unlimited damages in state court for being denied care based on medical necessity, but it requires patients to go to federal court for contract disputes, where there is that $5 million cap.
The Frist measure could potentially move some cases from state to federal court, thus subjecting those cases to caps.
At least seven other states give people the right to sue their HMOs — including Texas, where as governor, Bush allowed a patients’ bill of rights to become law without his signature. At least two of the states’ laws are facing U.S. Supreme Court challenges.
NO SUITS SINCE LAW PASSED
So far, no one in California has taken advantage of the right to sue an HMO, fueling supporters’ contention that national legislation would not set loose a flood of lawsuits.
The lack of litigation is partly because the California law has been in effect only since January. The state also processes complaints through a call center designed to resolve problems without resorting to the courts.
Helen Schauffler, professor of health and public policy at the University of California at Berkeley’s School of Public Health, says the congressional debate is too focused on the right to sue.
“The right to sue, at least in California, is viewed as the mechanism of last resort,” she said. “The right to sue is more of a symbolic gesture so people know if all else fails, they have the courts to protect them.”
That’s not how the state’s employers see it, especially when it comes to the question of “self-insured” employers — usually large, interstate companies that buy their own plans for employees and bear the financial risk. Those plans are governed by federal pension laws rather than state regulations and thus could be subject to any new federal law.
“I don’t think employers have anything to risk unless they administer their own self-funded plans and make their own medical decisions,” said Jamie Court, executive director for the Foundation for Taxpayer and Consumer Rights.
But Jeanne Cain, vice president for government relations for the California Chamber of Commerce, thinks the Kennedy bill is vague enough to expose self-funded employers to liability.
The language is “not tight enough from our perspective to not be subject to lawsuits,” Cain said. “Some employers will drop health care coverage because they won’t be willing for one lawsuit to lose.”
According to the Henry J. Kaiser Family Foundation, a nonpartisan health policy research organization, 26 percent of California workers are covered by self-funded plans, compared with 51 percent nationwide. The popularity of relatively inexpensive HMOs in California lowers the need for employers to finance their own plans and accounts for this difference.
FEAR OF LOSING COVERAGE
As for whether or not the public is swayed by the possibility of employers dropping coverage — it is.
A Kaiser Family Foundation survey released this month found 85 percent of the 1,000 people surveyed support the concept of a patients’ bill of rights, but that support drops to 60 percent if they fear it will increase premiums and falls further to 41 percent if it means some employers might drop coverage.
“What really is at the heart of this is . . . the fear people have that their plan won’t cover them if they’re really sick,” said Drew Altman, president of the Kaiser Family Foundation.
“People aren’t focused on the right to sue or how this affects access to specialists,” he said.