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Taking managed care to court

by Jeffrey P. Kahn, Ph.D., M.P.H.
Director, Center for Bioethics
University of Minnesota

June 21, 2000
Web posted at: 1:30 p.m. EDT (1730 GMT)

This week the U.S. Supreme Court issued a decision protecting health maintenance organizations (HMOs) from some types of lawsuits by patients, and in so doing set the stage for increased debate about how best to protect patients rights in an era of managed care.

In the case -- Pegram v. Hedrich -- a woman sued her HMO, claiming that the financial incentives in place for the plan's doctors led to restricted access to health care. She said that because of that restricted access, she developed a ruptured appendix after waiting eight days to be tested for pain in her abdomen. The court sided with the HMO, and went so far as to defend rationing as at the core what HMOs do, arguing that "No HMO organization could survive without some incentive connecting physician reward with treatment rationing."

Center for Bioethics

What's your opinion?

While only addressing the question of whether patients can sue HMOs over limiting access to care, the court's decision focuses on the core ethical issues in the ongoing debate about managed care. Should rationing be a part of managed care? Should HMOs give physicians financial incentive to limit the care they provide, and do such practices violate patients' rights? Does the very existence of managed care undermine the safeguards built into the physician-patient relationship?

Is rationing at the heart of managed care?

We need to realize that managed care didn't sweep onto the health care scene unannounced. It became popular because it offered both the consumers of health care and those who paid for it (mostly employers) a better deal. We get access to affordable health care in return for limits on our choices of which doctors we can see, which hospitals we use, and sometimes how long it takes to get care. The deal is attractive because we can't all afford to pay the costs of unlimited access and unlimited choice, any more than we can all afford to drive Rolls Royces, especially when more modest cars will get us where we need to go just fine.

Anyone who has the means and the desire to drive a Rolls Royce certainly can, just like we're all free to choose whatever health care we want and pay for it out of pocket. Few choose to do so because of the high costs of needing care for serious illness. But we can't have it both ways, and having good access to affordable health care may mean some types of rationing.

If we don't like that prospect, then we need to work to change our health care system in more fundamental ways. And if we thought rationing was controversial, try talking about a one-payer system, or what some call socialized medicine.

Is three a crowd? The doctor-patient-payer relationship

Whether or not patients are allowed to sue HMOs, the real issue at stake is the change that managed care has brought to the physician-patient relationship. No longer are doctors and patients free to make decisions based only on whatever amounts to the best medical care. Rules about referrals to specialists, what sort of procedures and prescriptions are allowed, and financial incentives for controlling costs all may conflict with the medical needs of patients.

So long as these cost-controls are adequately balanced with concerns for the quality and availability of care, everything works well. But adding payers to the relationship between doctors and patients doesn't offer such a balance -- which is why we are in the midst of such heated debate about patients' rights. HMOs must continue to experiment with new mechanisms for serving the interests of patients -- through independent appeals boards, ombudsmen, and more information for patients about how decisions are actually made -- if we are to strike the right balance.

Part of the deal we make with managed care organizations is that we understand there will be limits on our choice in return for affordable and accessible health care. But affordable shouldn't mean cut-rate or low quality, and we need means to assure that it doesn't without resorting to lawsuits. Some type of rationing may be part of managed care, but we need to be sure that someone is watching the rationers.

The U.S. Supreme Court recently issued a decision protecting health maintenance organizations from being sued by patients, and effectively endorsed their practice of rationing. Should rationing be an acceptable part of managed care? Should HMOs give physicians financial incentive to limit the care they provide? Do such practices violate patients' rights? Does the very existence of managed care undermine the safeguards built into the physician-patient relationship?

Post your opinion here.

Visit the
"Ethics Matters" Archive
where you'll find other columns from Jeffrey Kahn
on a wide range of bioethics topics.

"Ethics Matters" is a biweekly feature from the
Center for Bioethics and CNN Interactive.


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