Physicians, hospital executives and consumer groups have tried to bury managed care. But if the end comes, politicians and the legal system can take most of the credit.
Congress is nearing a showdown on how best to regulate HMOs, including the strong possibility of allowing enrollees to sue plans for injuries or deaths resulting from the denial of covered benefits.
Already, the healthcare bellwether state of California has offered a blueprint for a sweeping patients' bill of rights. Other states are sure to follow with similar legislation to thwart plans' fiscal and clinical decisionmaking power.
HMOs and other less-stringent forms of managed care are used by payers to coordinate medical services, negotiate fees with providers and hold down premium costs. To accomplish these goals requires health plans to "just say no" to patient and physician requests for certain medical procedures. How and why these decisions are made can be a mystery, but the resulting backlash has drawn the ire of organized medicine, opportunistic politicians and litigation-happy lawyers.
Wall Street has responded by pounding health insurance stocks. For example, Aetna, the nation's largest managed-care plan, has lost about half its value on the New York Stock Exchange in the past 12 months.
The American Medical Association continues to lead the provider charge against managed care. But at least one state hospital group also is taking an aggressive stand on managed-care reform. The New Jersey Hospital Association is spending $350,000 to invite frustrated HMO enrollees to share their stories. Members who call the 888-FIX-HMOs hotline will be offered the chance to unload their gripes on state legislators. The main goal of the NJHA's Managing Managed Care Task Force is to speed up HMO payments to hospitals.
But the real action is happening in the judiciary. The U.S. Supreme Court is reviewing an Illinois case that could decide if patients have the right to sue HMOs. But the crowning blow may be a coming spate of class-action patients' rights lawsuits against HMOs expected to be filed by prominent attorneys who sued tobacco companies and Microsoft Corp. Already, one such suit has been filed against Humana, charging it with concealing information about how it decides which claims to pay.
How judges and juries handle these suits could determine the fate of managed care.