The Patient's Bill of Rights: A Prescription for Massive HealthRegulation

Report Health Care Reform

The Patient's Bill of Rights: A Prescription for Massive HealthRegulation

February 29, 2000 3 min read
John Hoff
Bradley Fellow in Education Policy

Congress, in the name of patient protection, is poised to make problems in America's health care system worse. The so-called Patients' Bill of Rights legislation under consideration by a House-Senate conference committee would expand government control over the financing and delivery of health care through massive federal regulation and would stir up new and expensive litigation.

Supporters of the bill say its prescriptions are necessary to enable Americans enrolled in health maintenance organizations (HMOs) to sue their plans. But the bill is not needed for that purpose. Moreover, the House bill in particular would:

  • Encourage costly litigation. The House bill would expand the types of damages that plan members could recover by permitting states to treat disputes between the plans and their enrollees over the terms of coverage like malpractice lawsuits, with awards for pain and suffering, punitive damages, and other non-economic damages.

  • Expose employers to a new risk of litigation over benefits. Employers would be at risk of expensive lawsuits arising out of the health benefits they provide.

  • Impose a powerful new federal regulatory structure. Both the House and Senate bills would impose intrusive federal regulation on private health plans and health care delivery.

Under the House bill, the federal government would impose new rules governing plan offerings; utilization review; internal and external appeals; grievance processes; formularies for prescription drugs; participation of plan enrollees in clinical trials; patient information; and how plans deal with doctors (including incentive compensation arrangements).

The House bill, which has been broadly promoted as a managed care reform measure, even establishes federal rules on fee-for-service plans that may prevent them from operating. It imposes a mind-numbing number of legal requirements that are stated in ambiguous terms.

The bill would override private agreements on what is medically necessary. In a telling curiosity, Congress refrained from applying the bill to its own private plans in the Federal Employees Health Benefits Program (FEHBP) or to Medicare, Medicaid, and other federal health programs.

Congress, and all Americans, should seriously consider the likely effects of the legislation on businesses, workers, their families, and the private-sector health insurance market. The bill will increase the amount of federal red tape that doctors, patients, insurers, and employers will have to deal with. It will raise the cost of insurance, cause employers to drop coverage, and increase the already high number of uninsured. The Congressional Budget Office (CBO) estimates the House bill would increase premiums by 4.1 percent.

Combined with the risk of large awards for damages resulting from the operation of the health plan they sponsor, the bill will cause employers to drop health benefits or coverage. A Hewitt Associates survey of nearly 600 companies found that 36 percent would consider dropping health care coverage if their plans were subjected to malpractice suits. Another survey of 400 company human resources directors commissioned by the American Association of Health Plans found that 38 percent "would be likely to stop providing coverage for some or all of their employees" and 57 percent "would be likely to stop doing so for some or all retirees." A Harris Interactive study found that as many as 15.4 million Americans could lose their coverage.

A Better Policy.
Members of Congress could solve the real problems of patient frustration and lack of control over health care decisions more effectively, and with far less damage to the system and to patients, by strengthening consumers' ability to choose their own health plans.

Congress should stop, go back to the drawing board, and pursue policies that promote competition and expand personal choice within the context of a free market. Many Americans may be frustrated with their health care, but they do not need Members of Congress, yielding to the temptation to "do something," to make their situation worse.

John S. Hoff, Esq., is a prominent Washington, D.C., attorney specializing in health care law and health policy.


John Hoff

Bradley Fellow in Education Policy