Accountability

Accountability:
Behavior Only Changes When There Are Consequences

The rule of law is based on the principle of accountability for actions which are harmful to others. In the United States today there exists a remarkable example of accountability elimination in one of the most important areas of maintaining it; that of health care, more specifically in the managed care arena. The vehicle by which this unique aberration has been maintained is the ERISA legislation.

Enacted in 1974, the Employee Retirement Income Security Act (ERISA) was intended to govern the benefits of employer-paid pension and health funds to ensure that disputes were resolved in a uniform manner. Until recently the courts have consistently held that the health benefits provided by HMOs were covered under ERISA. As a result of this interpretation negligence and malpractice suits against HMOs brought in state courts were routinely transferred to federal jurisdictions where they died. Under ERISA rules the greatest recourse and recovery allowed to a plaintiff was to recoup only the cost of the medical treatment being denied! ERISA has provided managed care with the opportunity of maintaining sometimes outrageous and harmful behavior with no significant consequence. The legal system and the legal profession serve society as the "safety net" for allowing recourse and providing consequences for harmful behavior. ERISA has served as a prime example of how a sharp legal mind can discover a means to thwart this intent.

Perhaps, just as remarkable, is the observation that managed care has now become so economically powerful that its support of ERISA appears to continue to prevail over the public interest. After over a quarter of a century the ERISA aberration continues to allow indefensible and harmful behavior on the part of managed care providers. The following article by Albert Hunt, Wall Street Journal, May 17, 2001 helps in providing insight as to the reasons for this continuing anomaly of justice:

Make HMOs as Accountable As Doctors

By ALBERT R. HUNT

Bill Frist is a good senator, not to mention a caring and first-class surgeon. But the so-called patients' bill of rights he offered this week is a capitulation to health maintenance organizations.

With active support from President Bush, the Tennessee Republican claims this is a middle ground, one that expands patients' rights but wouldn't enrich trial lawyers at the expense of health coverage.

If you believe that HMOs and health insurers generally are positive forces that care about providing the best health care, this is a defensible position. But, if you believe that most of them are bandits who care only about costs and don't give a damn about their patients, it's awful.

People who've had more than a little experience with this industry -- many of Mr. Frists's fellow physicians and most anyone who's dealt with chronic illness or premature death -- think they're bandits. Moreover, the bill introduced Tuesday would entrust the Bush administration to administer these rights fairly. Based on the record, that isn't a good idea.

Although candidate Bush boasted last year that his state of Texas passed the first legislation giving patients the right to sue their HMOs, the fact is the measure passed over the objections of Gov. Bush. And while insisting he was for HMO reform that covered all Americans, the White House has spent the past several months trying to water down any measure that might get through Congress.

Messrs. Bush and Frist and their allies insist that proponents of a more sweeping bill -- Democratic Sens.Ted Kennedy and John Edwards,or Republican John McCain -- are promoting a radical big-government scheme. Let's look at some of the supporters, starting with Republican Rep. Charlie Norwood, a staunchly conservative dentist from Valdosta,Ga. Now there's a hotbed of radicalism.

"I can't help the president on the Frist bill,"Charlie Norwood says."It protects HMOs, not patients."

He's on the same side as the American Medical Association and scores of health-care and medical associations. The AMA embraces four principles: Medical decisions should be made by doctors, not insurance providers. All rules ought to apply to all Americans. There should be an independent and external appeals process for HMO rejection of medical care. And health-care providers should be held just as accountable as physicians if they make decisions that cause harm to patients.

The Frist bill fails on all these counts.

The bill's external review of HMO decisions has loopholes that, for example, could give insurers considerable leverage in picking the judges -- in this case, the physicians -- who decide the merits of complaints. If you and I and three guys off the street can decide on the referees, we might be able to take on the San Antonio Spurs.

Moreover, the bill does little to change the sweetheart arrangements that some HMOs make with compliant physicians. Coercion of doctors to provide cheaper care if they want to stay in the HMO-approved orbit isn't unusual. And this measure provides no protection for doctors who more vigorously advocate for patients.

But the major controversy will be over the patients' right to sue HMOs for wrongfully denied medical services. Under a quarter-century-old law, more than 125 million Americans are unable or extremely limited in bringing any actions in these cases. They can sue doctors, but not insurers. The examples of such indefensible and harmful HMO decisions are legion: denying therapy for a child afflicted with cerebral palsy; not permitting the proper procedure for a middle-aged woman with a brain tumor; keeping a deathly ill child from going to the closest hospital or nearest emergency room; denying the best specialist surgeon for a one-year-old girl with malignant kidney cancer. These are real, documented cases. In each, the HMO opted for profits over patients.

And while conservatives worship at the altar of devolution, the Bush-Frist proposal would take any legal actions against HMOs out of state courts and put them in federal courts with proscribed limits on non-economic damages and no possibility for punitive damages. Suits would be harder to bring in federal court and it's not good procedure anyway. Both the judicial conference, headed by Chief Justice William Rehnquist, and the Association of State Attorneys General have said that legal actions against HMOs belong in state courts, the same courts that physicians face.

What this industry really fears is not more lawsuits, but liability exposure. If a truly independent external review board rejects a patient's claims of HMO malfeasance, the odds of winning any suit would be negligible. "There may be some things they [trial lawyers] are salivating over," notes Sen. John Edwards, once the top trial lawyer in North Carolina, "but this isn't one of them."

Documents, however, have clearly revealed that HMOs behave differently -- that they're much more likely to conduct what is called a "reasonable investigation" of proper care -- in instances where they face the prospect of being sued.

The White House claims that more sweeping legislation would drive up costs, yet most analyses suggest these increases will be relatively small. Moreover, should we do way with liability exposure for baby seats or defective automobiles or tires because they may drive up costs?

It's worth looking at the handful of states that have expanded patients' rights to sue, starting with Texas. That law has been in effect for four years and there have been fewer than a dozen lawsuits. Rep. Norwood says in his home state of Georgia there have only been four lawsuits in two years.

These state laws did not produce a proliferation of lawsuits, or "cause employers to drop coverage or result in runaway health care costs," says Dr. Thomas Reardon, past president of the AMA and a general practitioner in Portland, Ore. But they did pressure health insurers to behave more responsibly. The real issue is whether HMOs can continue to practice their Darwinian brand of medicine or have to face the same standards that doctors, and most other interests, face every day. "We have accountability for almost every slice of America," says Sen. Edwards, "except HMOs and health-insurance companies. Is that really what people want?"

It will be interesting to see where this issue goes in the future. As of this time it is clear that President Bush and the majority of the United States congress support business at the price of integrity. The justification for limiting managed care liability is said to be the excessive costs of litigation and punitive awards. The facts are otherwise. Statistics show that in legal cases the plaintiffs win in the minority of cases and the median award is about $30,000 with only 5% of trials ending with punitive damages awarded. What makes it appear otherwise is the high level of media coverage associated with high profile cases.

The other area where efforts are underway to eliminate responsibility for harmful behavior is that of medical malpractice. To be sure physician premiums are too high. Much of this is, however, based on poor money management on the part of insurance companies. The medical establishment would have the public believe that the limitation of malpractice awards is the answer. Nothing could be further from the truth. One again, harmful behavior must be discouraged. Yes, the legal establishment is sometimes outrageous in its exploitation of the law. But, this must be balanced against the need for the legal profession to serve as a "safety net" for the public against outrageous behavior on the part of physicians. Balance, and more responsibility being taken by the medical profession at "quality control" in its own halls is needed. In this regard very few medical organizations have stepped "up to the plate." One of the few examples is the Medical-Legal Committee of the American College of Spine Surgery.