Texas Medical Association Testimony Says HMO Liability Resulted In Few Costs

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Testifying last week before Congress, Texas Medical Association lobbyist Connie Barron said the legacy of the Texas HMO liability law, in effect since September 1997, is few costs, little litigation, but important deterrence to wrongdoing.

Barron testified that she knows of only one lawsuit under the law and “just as there has not been a vast increase in litigation, neither has there been skyrocketing insurance premiums. The national average for overall health care costs increased by 3.7 percent in 1998 while Dallas and Houston markets were well below average at 2.8 percent and 2.4 percent respectively. Other national surveys show Texas premium increases to be consistent with those of other states that do not have the extensive patient protections passed by the Texas legislature.”

Like the Texas law, SB 21 (Figueroa), sponsored by the Foundation for Taxpayer and Consumer Rights (FTCR), extends to patients with private industry coverage the same right to sue for damages that public employees now have. The bill will be heard in the California Assembly Judiciary Committee Tuesday at 9 AM, Room 4202. SB 21 has already passed the state Senate.

Barron continued, “Nor has the managed care market in Texas withered. In 1994, the year prior to the first set of managed care reforms, there were 30 licensed HMOs in Texas. Today, there are 51. In a recent newspaper article, Aetna CEO, Richard Huber, referred to Texas as ”the filet mignon’ when asked about Aetna‘s plans to acquire Prudential. This does not support the accusations that Texas laws would have a negative impact on the ability and the desire of managed care plans to do business in our state’With no unexpected increases in premiums and a growth of managed care plans entering the market, Texas has proven that responsible public policy protecting patients from irresponsible managed care plans is possible.”

“The Texas example affords Governor Gray Davis and legislators the knowledge that holding HMOs accountable for their wrongdoing will not result in any of the apocalyptic consequences the HMO lobby projects,” said Jamie Court, FTCR’s advocacy director. “If public employees have not abused the HMO liability right they have, patients with private industry coverage will not abuse the process either.”


Consumer Watchdog
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