Businesses split over HMO reforms

In his acceptance speech in mid-August, Mr. Gore, the Democratic presidential candidate, all but referred to HMOs as the Evil Empire. He issued a populist pledge to fight the forces of "big tobacco, big oil, the big polluters, the pharmaceutical companies, the HMOs."

Mr. Bush, the Republican presidential candidate, has not denounced HMOs so dramatically. But he often points out that Texas was the first state in the nation to enact a law allowing patients to sue HMOs in 1997.

While HMO-bashing may be in vogue among politicians during election seasons, the reality is that voters don't generally respond to such rhetoric, said officials with the Washington, D.C. -based American Association of Health Plans. The group is the largest national trade organization representing HMOs and other managed care companies that provide health coverage to more than 140 million Americans.

"Primary voters have given Beltway pundits who proclaimed HMO reform a red-hot campaign issue a rude awakening," said Mark Merritt, vice president and chief of strategic planning for the association. "The bottom line is that the media were wrong - HMO reform has been a non-starter."

But don't tell that to Arlington senior citizen Louise Morrison.

The development of HMOs has severely limited her choice of physicians to the point she no longer deals with them, she said.

"I'm on Medicare, and I pay for a health supplementary policy myself so I can choose my own doctors," Mrs. Morrison said. "It's expensive, but it's worth it to me. . . . I hope there is some kind of HMO reform."

While few politicians talk about restoring more physician choices to patients, Mr. Gore supports the so-called patients' bill of rights that was debated in Congress earlier this year. The bill would give physicians more control over medical decisions and allow patients greater discretion to file lawsuits against HMOs and similar plans.

Mr. Bush supports a proposal developed by GOP congressional representatives that would exclude employees of most large companies from being covered by Medicare, a measure Mr. Gore opposes.

Having more control over medical decisions is the top concern of local doctors heard by Chip Robinson, executive director of Physicians Service Organization of Arlington, which negotiates doctors' rates with health plans.

"They're very concerned about medical decisions being taken out of their hands and made by people who don't really understand the situation," he said.

The health plan industry has already implemented broad reforms, said Dr. Abbie Leibowitz, chief medical officer for Aetna U.S. Healthcare. Aetna is one of Arlington's largest employers with a claims processing center on Interstate 20.

"We and many other insurers already have adopted virtually all of the reforms proposed in the patients' bill of rights," Dr. Leibowitz said. "By adopting mandatory external review of coverage decisions by independent medical experts, we believe we have created a better solution for patients than unlimited lawsuits. . . . We hope that dialogue will replace confrontation."

One example of change in health plans' attitudes occurred last November, when Minneapolis-based United Healthcare announced it would let physicians - not managed care administrators - make the final decisions regarding patients. Other plans like Aetna are considering similar policy changes.

Beyond HMOs, a big issue for many seniors like Arlington resident Betty Fischer is the spiraling cost of prescription drugs for the millions who rely on Medicare. The federal program does not cover prescription medication, forcing Mrs. Fischer and her husband, Nile, to spend about $7,000 a year for arthritis and other medicine.

Across the country, spending on prescription drugs has increased from $38 billion in 1990 to more than $100 billion in 1999, in part because drug therapies are more popular these days.

"It's probably the biggest concern I hear from seniors in this area," said Mrs. Fischer, who heads the Senior Political Action Committee of Tarrant County.

Mr. Gore has proposed a 10-year, $255 billion expansion of Medicare that includes a prescription drug benefit that would cover 50 percent of such costs up to $5,000. He also supports offering small businesses tax credits for employees' health insurance and giving tax credits worth 25 percent of their health insurance costs to individuals who don't qualify for Medicare

Mr. Bush has proposed a prescription drug benefit in Medicare to cover low-income elderly people. He would allow other seniors to sign up for medication coverage at a cost and provide a $2,000 tax credit to families who don't qualify for Medicare or Medicaid to purchase their own insurance.

Mr. Bush also supports encouraging small businesses to obtain lower-cost insurance through associations and expanding individuals' Medical Savings Accounts and Flexible Savings Accounts.

The pharmaceutical industry opposes price controls, saying they limit research funding that could be used to develop better medicine.

But the Medicare issue is different, said Alan Holmer, president of the Washington-based Pharmaceutical Research and Manufacturers of America.

"The pharmaceutical industry strongly supports strengthening and modernizing Medicare, including expanding Medicare coverage for prescription medicines," he said.

But the industry opposes any proposal that will impede choice and competition in favor of expanding private premium-supported plans, Mr. Holmer said.

Health plan officials also said they generally support adding a prescription drug benefit in Medicare - something it has already worked to provide.

"Managed health care has played a significant role in providing an affordable prescription drug benefit to most of the 6 million seniors who have chosen the Medicare+Choice option," said Karen Ignagni, president of the American Association of Health Plans. "The simple fact is that managed health care has already played a key role in expanding a prescription drug benefit under Medicare to millions of Americans who otherwise would not have had access to it."

But officials said Medicare should not automatically hospitalize patients with major diseases.

"We now know how to care for patients with major chronic disease in ways that improve care and avoid a hospital stay. Often, the best approach can be comprehensive, aggressive outpatient care rather than inpatient care," said Dr. Charles Cutler, chief medical officer of the health plan association.