- The Washington Times - Saturday, July 21, 2001

When choosing between two evils, Washington is often compelled to try the one it hasn't tried before. While that might go a long way to explain the complexity of the current tax code, it is a misguided approach that some lawmakers seem to be embracing as they attempt to "do something" about health care. Take, for example, the Patients' Bill of Rights.

The Patients' Bill of Rights proposal is in the midst of fierce debate over how to regulate HMO quality. Both the Senate, which recently passed legislation, and President Bush have made this issue a top priority. As the House prepares to debate this important issue, Mr. Bush warns that, "The Congress must act on a patients' bill of rights, a good patients' bill of rights, one that recognizes patients are important not lawyers."

The Senate legislation allows patients to sue health plans for unlimited damages under state malpractice laws if health care benefits are delayed or denied. Under current law, patients may already sue in federal court for the amount of a denied claim, providing a legal remedy for patients who are improperly denied coverage.

But if Congress allows patients to sue managed care plans and receive unlimited damages, it could also make some employers liable for these costs.

It is easy to see how the right to sue for damages provision could create an epidemic of trial lawyers clogging the courts with frivolous lawsuits without adding any real consumer protection for patients.

Rather than risk expensive lawsuits, employers may respond by choosing to drop health insurance coverage altogether for their employees. In a recent survey conducted by Hewitt Associates, more than one-third of the large employers surveyed predicted they would drop health benefits if they were subject to these malpractice lawsuits. Even if an employer did not drop health insurance, the cost of that insurance could dramatically rise. The Congressional Budget Office estimates that private health insurance premiums could increase by an average of 4.1 percent above inflation. Barents Group, an economic consulting firm, estimated that almost 1.3 million Americans could lose their health insurance. With 44 million Americans already lacking health insurance, it is unlikely that consumers would benefit from this proposal.

Before lawmakers impose this risky, one-size-fits-all approach on the entire nation, they should consider alternative proposals.

A less-costly "external review" alternative has already been approved or implemented in 33 states and many major health plans have already voluntarily established this process. External review allows a third-party panel of physicians to review a denial of coverage and impose a binding decision on whether the health plan must cover the denied procedure.

This option is not only a more cost-effective process for health plans, employers, and taxpayers, but more important, it is the most expeditious way for sick patients to get the treatment they need. Lawmakers should respect agreements between employers, employees, and health plans.

For example, some health-care plans provide for binding arbitration where the consumer agrees to allow a third party to resolve a dispute, rather than to take the dispute to court. Consumers can receive a lower health insurance premium or more health care coverage. In this way, consumers and health care plans can best balance costs and preferences, without throwing precious health care dollars into the trial lawyers' pockets.

But if Washington remains compelled to trump voluntary efforts to deal with the issue of denied coverage and usurp private agreements with a one-size-fits-all government approach, they should use the less-destructive option: external reviews to mediate patients' disputes with health plans.

For some reason, many Washington lawmakers continue to ignore important health care matters, such as restoring the doctor-patient relationship; allowing the uninsured to purchase health insurance and health care services with the same favorable tax treatment many of us enjoy through employer-sponsored health care plans; and removing government rules and regulations that limit health care access, choice, and affordability.

Political humorist P.J. O'Rourke once said, "The mystery of government is not how Washington works but how to make it stop." Americans would be better off if we could stop lawmakers from "doing something" that provides trial lawyers with a cash bonanza paid at the expense of almost 1.3 million Americans' health insurance coverage.

Naomi Lopez Bauman is a fellow in health and welfare studies at the California-based Pacific Research Institute.

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