By Howard Gleckman
To hear Washington debate the rights of managed-care patients, you would think there was nothing else at stake but the ability of participants in health maintenance organizations to sue their insurers. President Bush insists he won't sign any measure that allows broad new litigation. "It puts the interests of trial lawyers before the interests of patients," Bush argued as the Senate passed its version of the bill on June 29. Democrats pledge to block any bill without such a right. The issue will return to center stage when the House takes up the debate later this month.
It turns out, though, that the power to sue simply isn't that important--not to consumers, insurers, or employers. Millions of Americans already have the right to sue their HMOs, and they don't. For one thing, the vast majority of disputes with HMOs don't involve enough money to warrant a suit--much less entice any lawyer to take the case.
True, the right to sue may be important as a last recourse. But there are plenty of other issues at stake in the patients' rights debate that are far more important to HMOs and their customers, such as expanding the ability to go to an emergency room or get specialist care. "Every patient who is sick would rather see a doctor than a lawyer," says Daniel Zingale, director of California's Managed Health Care Dept.
FEW SUITS. The record in states that allow suits shows that Americans aren't particularly litigation-happy. While federal law bars most workers from suing HMOs or their employers in health-care disputes, such litigation is allowed in eight states. In Texas, patients have had a limited right to sue since 1997, but have brought barely two dozen cases. There are reports of only three suits in Oklahoma in the past year. In California, where HMO patients have been able to sue since January, there have been no suits at all. Many public employees can litigate, too. But of the 1 million workers covered by the California Public Employees' Retirement System, fewer than 20 sued between 1991 and 1997, Coopers & Lybrand reported in 1998.
To see why, consider the dollars involved. We've all heard about families who exhaust their savings after being denied coverage. But such cases are rare. In fact, money is not an issue in more than half of all HMO disputes, according to a June, 2000, Henry J. Kaiser Family Foundation study (chart). "A lot of people are having problems with their health plans, but the vast majority are relatively minor," says Larry Levitt, a Kaiser managed-care expert. When patients suffered financial loss, most claims involved less than $200. Only 5% cost $1,000 or more.
There is another reason people don't sue. Most states require patients and HMOs to try to resolve disputes before going to court--just as the Senate bill requires. It gives the HMOs 30 days to review a complaint through an internal appeals process. If patients disagree with that outcome, they can request an outside review by independent medical experts. Only after that can a patient sue.
Such a system resolves many issues long before they get to court. Of course, it also may discourage some patients from pursuing disputes in the first place. A Georgetown University study reports that only a handful ever request an independent review. Either way, outside appeals make suits even less likely.
So why have they become such a charged issue? HMO critics insist the right to sue is essential, arguing that the mere threat of legal action makes managed-care companies more customer-friendly. HMOs and employer groups counter that challenges to the state laws have slowed litigation, but the Senate bill would open the floodgates to new suits. "Now that this has received so much attention, [lawyers] are going to be looking for them," says Dr. Donald A. Young, president of the Health Insurance Assn. of America, which represents insurers.
Of course both sides expect to gain political advantage by focusing on lawsuits. Because lawyers are unpopular, insurers stress how the provision will aid attorneys who exploit patients' suffering. And Democrats would love to force Bush into a veto, the better to bludgeon the GOP in the 2002 elections. But get past the politics, and it's clear that of all the important issues in the patients' rights debate, the right to sue is little more than a sideshow.
Gleckman writes about policy trends in Washington.