More Health Regs Coming

Further federal regulation of health plans is probably inevitable, both liberal and conservative policy analysts told a weekend conference on the role of regulation in a market-oriented health system, sponsored by Princeton University and the Robert Wood Johnson Foundation.

But analysts also cautioned that two of the most popular forms of regulation under consideration in Congress--requiring "external review" of benefit denials and requiring plans to provide consumers with information on which to base their choices--might not produce the desired results.

The public is demanding further regulation, said Walter Zelman, a former healthcare adviser to President Clinton now at the Harvard School of Public Health, for a long list of reasons, including the fact that it is difficult for consumers to make good choices among health plans, that once a choice is made consumers are locked in, and that the costs of a bad decision are very high. Even Mark Pauly, a professor at the University of Pennsylvania's Wharton School and a noted free market health economist, said further regulation is needed if only to offset the market disarray caused by the tax treatment of employer-sponsored health insurance. "One government distortion may need to be offset by another government distortion," Pauly said.

But analysts also said some of the most popular regulatory proposals floating around on Capitol Hill are unlikely to improve healthcare quality over the long haul. External grievance processes, said Zelman, "even when they're won, represent a win only for that one individual," leaving the situations of those who may have suffered a similar fate unchanged. And UCLA Assistant Professor Thomas Rice argued that competition and the desire to control costs have led private plans to micro-regulate providers. As a result, he said, the government in turn would have to micro-regulate plans to ensure quality of care is not compromised. In the case of requiring plans to report consumer satisfaction and other information, Rice said, plans would be under such pressure to report good numbers that "figuratively speaking, someone will have to be standing over the health plan's shoulder at all times."

Meanwhile, in an address to the American Medical Association here, President Clinton today unveiled a new report showing that 44 states--including 28 with Republican governors--have enacted at least one provision of the administration's proposed Patients' Bill of Rights. The report was compiled by the White House Domestic Policy Council.

Among the findings:

• Forty-one states have enacted "anti-gag clauses" requiring health plans not to restrict information shared by doctors with their patients;
• Thirty-four states have laws requiring health plans to disclose information to consumers about their services
• Thirty states have enacted provisions providing direct access to certain specialists
• Twenty-eight states have provisions facilitating access to emergency room care
• Nineteen states have enacted measures protecting the confidentiality of health information
• Twelve states have required access to an external process to appeal health plan decisions.