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No Exit

What the Clinton plan will do for you.

If these facts surprise you, it’s because you haven’t been given a straight story about the Clinton health bill. Take two examples: on November 4, Leon Panetta, the director of the Office of Management and Budget, testified to senators that the bill does not “set prices” and “draw up rules for allocating care”; a month later Hillary Rodham Clinton assured a Boston audience that the government will not limit what you can pay your doctor. The text of the bill proves these statements are untrue.

The administration also says that the bill will not lower the quality of your medical care or take away personal choices you now make. This statement goes right to the issues that matter most. How true is it? To help you decide, here is a guide to the 1,364-page Health Security Act.

No effort is made here to compare the Clinton bill with the many alternatives offered by Republicans and other Democrats or to assess the nature and extent of the health care “crisis.” The purpose is to answer one question: Under the Clinton bill, if you become ill, will you be able to get the treatment you need and make choices about your own health care?

The Law Will Make You Get Health Care Through Your “Alliance.” Under the bill, unless you get Medicare, military benefits or veteran’s benefits, or you or your spouse work for a company with more than 5,000 employees, you must enroll in one of the limited number of health plans offered by the “regional alliance” where you live (page 15). Regional alliances are government-run monopolies that select health plans, collect premiums from residents and their employers and pay most of the money to HMOs and insurers. If you fail to enroll, or the plan you choose is oversubscribed, alliance officials will assign you to one (pages 144, 146). The goal is to curb health care spending by limiting what every American is allowed to pay for health insurance. Restricting how much people can pay for insurance limits how much money is in the pot to take care of them when they’re sick.

The Health Care You Can Get Will Be Limited. Under the bill, a National Health Board—seven people appointed by the president—will decide how much the nation can spend on health care beginning in 1996 (the baseline year). Based on that national budget, the board will set a budget for each region and a ceiling on what the average health plan in the region can cost. The bill outlaws plans that would cause a region to exceed its budget or that cost over 20 percent more than the average plan. After 1996, increases in health plan premiums will be strictly limited by an “inflation factor” based on the consumer price index (pages 256, 984-987, 990, 995).

Putting price controls on premiums to limit the amount of money in the health care system might wring out waste during the first year or two, but there is no doubt it will cause hardship later on. Seventy-seven million baby boomers will be reaching the age when they need more medical care. Increasing numbers of teen pregnancies and low-birth-weight babies also will require more health care dollars—$158,000 on average for each severely underweight newborn. Even the bill’s authors anticipate that restricting the dollars available for health care in the teeth of these trends will produce grave shortages: the bill provides that when medical needs outpace the budget and premium money runs low, state governments and insurers must make “automatic, mandatory, nondiscretionary reductions in payments” to doctors, nurses and hospitals to “assure that expenditures will not exceed budget” (pages 113, 137).

Above a threshold level of quality, alliance officials will approve health plans based on lowest cost, not highest quality, to stay under the premium ceiling set by the National Health Board, explains Cara Walinsky of the Health Care Advisory Board and Governance Committee, which advises 800 hospitals worldwide. That is why Anthony L. Watson, chief executive of the Health Insurance Plan (hip) of Greater New York, is optimistic. If the Clinton bill passes, “New York is mine,” he told The New York Times. “I’m going to be the lowest-cost plan.” hip, with a physician staff that is 57 percent foreign-trained, already has what that newspaper calls “the image of being the least desirable health care option for city workers and others who cannot afford anything more.”

Staying With the Doctors You Use Now Will Be Hard. Deciding for yourself when to see a specialist or get a second opinion and selecting the hospital you think is best will be even harder. The bill is designed to push people into HMOs, which restrict your choice of physicians and hospitals, and use gatekeepers to curb the use of specialists, expensive tests and costly high-tech treatments. What most of us call fee-for-service (choose-your-own-doctor) insurance will be difficult to buy. The ceiling on premiums and the 20 percent rule will eliminate most fee-for-service plans, which tend to be more expensive than their pre-paid counterparts. Although the Clinton administration insists that Americans always will be able to choose fee-for-service insurance, experts such as Dr. John Ludden, medical director of the Harvard Community Health Plan, say that option will “vanish quickly.”

Even where it is possible to buy fee-for-service insurance, it will be hard to find doctors practicing on that basis. According to Walinsky, the Clinton proposal contains “very strong incentives” against fee-for-service “on the consumer side but also on the provider side.” Price controls on doctors’ fees and other regulations will push doctors to give up independent practice and sign on with HMOs. We’ve been told that the government won’t be putting price controls on doctors, but the bill limits what health plans can pay physicians and prohibits patients from paying their doctors directly. Alliance officials post a schedule of fees, and it is illegal for doctors to take more (pages 134, 236).

In addition, alliance officials set yearly limits on payments to fee-for-service doctors in each field of medicine, like cardiology or pulmonology. What if a flu epidemic causes pulmonologists to see more patients with breathing problems than the region’s budget allows? The bill compels insurance plans to slash doctors’ fees or cut off their payments entirely until the next year “to assure that expenditures will not exceed the budget” (page 137).

HMOs Do the Job of Rationing. Under the Clinton bill, the federal government uses price controls on premiums to curb dollars paid into the health care system. Limiting how those dollars are spent is a job shared by alliance officials, who budget payments to doctors in the dwindling fee-for-service sector, and HMO administrators, who are expected to do the lion’s share of health care rationing. Is “rationing” too strong a word? Not according to Ludden, whose HMO serves 570,000 people. He predicts that “price controls on premiums will drive us straight to rationing at bedside.” Princeton Professor Paul Starr, a key designer of the Clinton plan, prefers to say that premium caps will induce “a different frame of mind” in both doctors and health care administrators. “They will have to manage under constraint.”

HMOs already have a track record of tightly controlling a patient’s access to physicians. At Kaiser Permanente, the first person a sick patient sees is the “advice nurse,” who makes the decision whether a doctor is needed. In HMOs, the ratio of physicians to members averages 1 to 800, about half the ratio of physicians to the general population. Specialists are particularly hard to see.

Current HMO cost-cutting methods already are drawing criticism from Congress, government investigators and worried doctors. The Clinton bill’s premium caps will compel HMOs to use even more stringent methods of limiting care, but the bill omits any safeguards to protect patients from abusive practices.

For example, missing from the bill is any effort to put a stop to “the withhold,” the pervasive HMO practice of punishing doctors financially for providing care they believe their patients need. Almost all large, for-profit HMOs, including those operated by Aetna, Metlife, Oxford and Prudential (but not Cigna) withhold between 10 percent and 25 percent of a doctor’s compensation until year’s end, and return it only if the doctor has met HMO targets for limiting patient tests, referrals to specialists and hospitalizations. Doctors report that targets are so stringent that HMOs almost always keep part of the withhold, which means that what a doctor orders for a patient comes out of the doctor’s own pocket at the end of the year.

The withhold has caused a surge in dangerous “hallway consultations,” according to Dr. Alan Jasper, a pulmonologist and critical care specialist at St. Vincent’s Medical Center in Los Angeles. Other doctors stop Jasper in the hospital corridors, describe their patient’s breathing problem and seek a diagnosis, in order to avoid referring the patient for a specialty consultation and incurring points against the withhold. The danger, says Jasper, is that the other doctor might fail to mention a critically important aspect of the patient’s condition.

The withhold motivates primary care doctors to take a “we’ll see how you feel next week” or “let’s try this first” approach, even if it means additional worry and needless suffering for the patient. At a Humana-owned HMO in San Antonio, for example, a 40-year-old woman with back pain was told by the orthopedist that she needed an mri. But her primary care doctor rejected the specialist’s request for the test, saying the patient would have to try something less expensive, and sent her for acupuncture, followed by months of hot packs and physiotherapy. When nothing worked, the gatekeeper authorized the mri, which revealed that the woman needed a lumbar dischetomy (disc removal), as the orthopedist had suspected. The story was related by the woman’s surgeon, Dr. William V. Healey, a clinical professor at the University of Texas, who said the lesson was that HMO cost-cutting incentives, such as the withhold, fail to account for the graver cost—the months a patient is home from work, worried and in pain.

Another HMO cost-cutting strategy that makes doctors and patients worry is the utilization review—a sick patient must wait while the doctor telephones a utilization review company, describes the symptoms and medical history to a nurse or clerk seated at a computer terminal and hopes for an o.k. to proceed with tests and treatment.

Three hundred and fifty utilization review companies that claim to slash health care costs sell their services to HMOs, hospitals and others at a rate of $1 to $3 per patient reviewed. It’s a $7 billion industry. Such “cookbook medicine” ignores the non-average, abnormally sick patient who may need more intense treatment than the computer program recommends. It also discounts the value of examining a patient, and ignores the physician’s judgment and expertise. Dr. Jerome Groopman, head of oncology and hematology at the New England Deaconess Hospital in Boston, says, “It’s an 800 number. They don’t know me from Adam!”

“Horror stories abound” about utilization review, according to a 1993 report for the National Association of Attorneys General. Doctors’ treatment plans are “rejected by inadequately trained personnel,” according to the report, and utilization review companies refuse to give reasons for their decisions, even to doctors, because it is presumed doctors would figure out ways to get around the review guidelines once they were known.

Even when doctors’ recommendations are ultimately approved, it can take weeks longer to diagnose and begin treating an HMO patient than a patient with fee-for-service insurance, Jasper explains, because of the successive delays in getting each test approved. One HMO patient with coughing trouble was given antibiotics by his primary care doctor, who thought the problem was pneumonia. The patient lost thirty-five pounds while waiting from October 27 to December 24 for an o.k. to see Dr. Jasper, then to have a cat scan and lung biopsy, and finally to learn that the correct diagnosis was a lung fungal disease. Jasper said he could have had a fee-for-service patient on anti-fungal medicine within fourteen days, instead of nine weeks.

The Attorneys General report urges state lawmakers to look into curbing utilization review in HMOs. In contrast, the Clinton bill calls utilization review a “reasonable restriction” on patient care and expressly includes it as a requirement for doctors treating patients with fee-for-service insurance as well (page 134).

The Government Won’t Protect You From HMO Abuses. If most Americans are moved into HMOs, who will ensure that they get good health care? The Clinton bill establishes two national boards to develop quality standards and depends on alliance officials in each state to enforce them (pages 843-844). But history shows that federal and state officials have failed to protect patients from HMO abuses, even in small pilot programs.

In 1990 Florida newspapers printed lurid accounts of abuses by Humana Medical Plan, an HMO paid to care for the elderly under a small, experimental program to reduce Medicare costs. Congress ordered an investigation of Humana’s performance, and Janet Shikles, in charge of the probe for the General Accounting Office testified about the company’s “failure to order appropriate diagnostic tests and failure to follow up on abnormal test results.” Consumer Reports (August 1992) also investigated the shortcomings of the pilot Medicare-HMO program in Florida, and concluded that government oversight was “lackadaisical.”

A nationwide investigation for Congress drew the same conclusion. Pointing out that only twenty-one of fifty-seven HMOs investigated received a passing grade, the late Senator John Heinz warned that the priority “has been to promote enrollment in HMOs and we have not given equal priority to monitoring what happens” to people “after they have enrolled.”

Far from protecting patients in HMOs, the Clinton bill ties the hands of state lawmakers who want to pass protective legislation. Some states recently have enacted laws to safeguard choices patients want to make for themselves, such as which hospital or pharmacy to use. HMOs protest that these laws hobble cost containment, and the Clinton administration apparently agrees. The Clinton bill pre-empts state laws protecting patient choice (page 238).

You’ll Get More Primary Care Than High-Tech Medicine, and That’s Not Good News. Will patients get the care they need when gatekeepers limit their access to specialists and high-tech medicine, as the Clinton bill intends? The evidence strongly suggests that low-tech care will not be good enough. People with heart disease, for example, will suffer. HMOs already ration high-tech care to heart attack patients, according to a study in The New England Journal of Medicine (December 1993). HMO patients hospitalized with coronary disease (myocardial infarction, unstable angina, angina pectoris or ischemic heart disease) are 30 percent less likely to be given bypass surgery or a coronary angioplasty (declogging of the arteries) than similarly sick patients with fee-for-service insurance. Another recent study by Duke University points to the consequences of such low-tech care. In the study, American heart attack patients who tended to be treated with three costly, high-tech procedures—catheterization (inserting a thin tube into the heart for diagnosis), angioplasty and bypass surgery—recovered far better than Canadian heart attack patients, who had less access to the procedures. American patients, who were twice as likely to undergo the procedures, tended to have a better quality of life after a heart attack. Canadians suffered more recurring pain, felt more depressed and were less able to go back to work and pick up their old activities. Dr. Robert Califf says the Duke study may help people understand “the implications of reducing services in a health care system.”

Is it true that we need less care by specialists? Not according to the National Institutes of Health, which recently issued a warning that patients with many common conditions should be treated routinely by a renal (kidney) specialist. According to the nih panel, primary care doctors frequently are overlooking the early signs of kidney failure and are hanging on to patients too long. Patients should be referred to specialists for dialysis sooner, said the nih, before it is too late to save their lives. Twenty-five percent of kidney patients who don’t receive dialysis until it is an emergency die. Dr. C. Craig Tisher, chairman of the nih panel, warned that patients with high blood pressure, diabetes, weight problems and metabolism abnormalities should be regularly cared for by a renal specialist, not only a primary care doctor.

In the short run, the Clinton bill depends on HMOs to limit access to specialists and high-tech care. As a longer-term strategy to limit such care, the Clinton bill seizes control of medical education and requires that by 1998, no more than 45 percent of young doctors be permitted to go on to advanced training in a specialty. Specialty programs at leading medical schools will be downsized. Doctors in training will be assigned to the coveted specialty programs based partially on race and ethnicity, depending on how “underrepresented” each racial or ethnic group is “in the field of medicine in general and in the various medical specialities” (pages 509, 514-515).

Restricting medical education by government fiat undoubtedly will reduce the consumption of expensive, cutting-edge care. Doctors who are not trained in sophisticated technology cannot use it. But preventing doctors from learning about the most advanced medical procedures is a lethal way to curb health care consumption. Keeping doctors uninformed could not possibly be an improvement.

Unwritten Rationing Rules. Under the Clinton bill, you are entitled to a package of basic benefits, but you can have them only when they are “medically necessary” and “appropriate.” That decision will be made by the National Quality Management Council, not by you and your doctor. The council (fifteen presidential appointees) will establish “practice guidelines” to control “utilization” of health services (pages 91, 836, 848). These guidelines will compel doctors to uniformly practice low-budget medicine. “There needs to be some point of reference for [health] plans to determine what is appropriate care,” Starr said. “There is an enormous amount of excessive, inappropriate care.” In Starr’s view, the bill provides “high quality care.” People who want access to more are asking for a “neurotic” level of care. What is most troubling about the practice guidelines is that they are not spelled out in the bill. Congress and the public are asked to approve the concept without knowing the content.

How rigorous will the standard of “medically necessary” and “appropriate” be? In other words, how much rationing based on cost-effectiveness will we have to endure? When a kidney transplant is needed, will the patient’s age matter, as it does in Great Britain, where older patients are routinely denied high-tech treatments? Will patients with advanced aids be entitled to intensive care? Oregon’s standard of appropriate care for needy residents excludes high-tech, life-sustaining procedures for advanced aids cases, as well as for extremely premature babies and advanced cases of certain cancers. Groopman, who treats cancer and aids patients, worries that decisions now made by the patient, doctor and family will be made by a council of “omniscient bureaucrats” who “are looking at two things: dollars and ideology.”

Many organizations, including the American Medical Association, specialty medical societies and insurers already devise what they call “practice guidelines” to help physicians keep abreast of the most effective treatments. Ludden explained that “doctors appreciate guidelines” when they are recommendations, “but not when they become matters of law.”

Many physicians who treat the hiv-positive population are troubled that the Clinton plan’s practice guidelines will prevent them from trying new strategies to help desperate patients. Jasper recalls that he learned quickly “through the grapevine” that other doctors were achieving some success with treating pneumocystis pneumonia, an aids-related illness, with adjunctive corticosteroids. Mandatory practice guidelines would have stifled such innovation and prevented Jasper from keeping his patient alive. Similarly, Ludden recalls that at Harvard “we were using aerosol pentamidine” to treat an aids-related condition “eighteen months before any practice guideline would have regarded it as appropriate.” The Clinton bill would hold changes in medical treatments to a slow-moving government timetable, putting many patients’ lives at risk while the National Quality Management Council deliberates.

If You’re Over 65, Good Luck. Another cost-cutting measure in the Clinton bill deprives people over 65 of access to new cures. The secretary of health and human services has the power to set a controlled price for every new drug, and to require the drug manufacturer to pay a rebate to the federal government on each unit sold to Medicare patients at market price instead of the controlled price. If a producer balks at paying the rebate, the secretary can “blacklist” the drug, striking it from the list of medications eligible for Medicare reimbursement (pages 365-379). The proposed regulation threatens to keep a new drug such as Tacrine (a treatment for Alzheimer’s) from older patients.

Under the bill, the secretary weighs the development costs and profit margin for the single drug, rather than the overall profitability of investing in new cures (page 373). Biotech investors point out that for every drug that reaches market, more than 1,000 others dead-end, with a 100 percent loss for investors. Limiting the price and profitability of the one drug in a thousand that succeeds will halt research into new cures, including drugs for ovarian and breast cancers now in the pipeline.

Before Signing On, You Should Know.... The Clinton bill will prevent people from buying the medical care they need. Price controls on premiums will push most Americans into HMOs and pressure HMOs into sharply cutting access to specialists and effective, high-tech cures. Price controls on doctors’ fees and regulations tying doctors’ hands will curb the care physicians can give patients. Price controls on new drugs will keep people over 65 from getting the medications that can help them. Most important, government controls on medical education will limit what future doctors know, costing lives and suffering no one can calculate.

The administration often cites two statistics—America’s relatively high infant mortality rate and its lower life expectancy—to support the need for the Clinton health bill. But these have almost nothing to do with the quality of American medical care. Both statistics reflect the epidemic of low-birth-weight babies born to teenage and drug-addicted mothers, as well as the large number of homicides in American cities and drug-related deaths.

In fact, if you are seriously ill, the best place to be is in the United States. Among all industrialized nations, the United States has the highest cure rates for stomach, cervical and uterine cancers, the second highest cure rate for breast cancer and is second to none in treating heart disease. In other countries that spend less, people who are sick get less care, are less likely to survive and have a poorer quality of life after major illness. Consider what happens in Canada, whose health care system often is held up as a model for the United States. In Canada medical technology is rationed to dangerously low levels. The United States has 3.26 open-heart surgery units per million people; Canada has only 1.23 units per million. Cardiovascular disease is Canada’s number one health problem, yet open-heart surgery units and catheterization equipment are kept in such short supply that the average wait for urgent (not elective) surgery is eight weeks. The shocking result is that in Canada, a cardiac patient is ten times as likely to die waiting in line for surgery as on the operating table. In the United States, there is no wait.

The choice is not between the Clinton bill and the status quo. Members of Congress should read this bill, instead of relying on what they hear, and then turn their attention to alternatives sponsored by Democrats and Republicans. These alternatives provide urgently needed reform of the health insurance industry, outlawing its worst abuses, without taking important decisions away from patients and their doctors and without depriving Americans of effective, high-tech medical care when they are seriously ill. Congress also should consider ways to provide insurance for those who cannot afford it, and level with the public about what universal coverage will cost. Whatever the price, ultimately, it will be less expensive than the consequences of the Clinton bill.