ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Sunday, February 4, 1996 TAG: 9602050078
SECTION: VIRGINIA PAGE: C1 EDITION: METRO
DATELINE: RICHMOND
SOURCE: DAVID M. POOLE STAFF WRITER
Two powerful coalitions preparing for an epic battle in the General Assembly over managed health care are both marching beneath the banner of "consumer protection."
One coalition - insurance companies, big corporations and hospitals - says the trend toward managed care is holding down costs and making insurance coverage more affordable for consumers.
The second group - physicians, other care providers and many small business owners - argues that health maintenance organizations place more emphasis on cost containment than on quality care.
A Northern Virginia lawmaker sponsoring the most sweeping managed care bill said that while consumers have much at stake in the outcome, the driving force behind the debate is money and power.
"Make no mistake about it; This is the granddaddy of all turf battles," said Del. Kenneth Plum, D-Fairfax County.
The economic fight is inevitable. Managed care - which is fast taking hold in Virginia - represents a fundamental shift in the roles of physicians and insurance companies in the delivery of health care.
The traditional model allows physicians to get reimbursed for services provided to virtually any patient with health insurance. The cost of insurance skyrocketed in part because physicians, with no incentive not to, could perform as many tests and procedures as possible - and be paid for them.
To contain costs, insurance companies and businesses providing health plans to employees have created a system in which physicians have an incentive to limit care.
The result has been health maintenance organizations, which accounted for 14 percent of the Virginia market in 1994. The basic idea is to turn the family doctor into a "gatekeeper" who decides - in consultation with the insurance company - whether to refer patients to a more costly specialist.
HMOs have succeeded in making insurance more affordable, but they also have created a backlash that last month landed a photograph of a gagged doctor on the cover of Time magazine. Critics say managed care has, among other things, put financial concerns ahead of patient well-being and has prevented doctors from telling critically ill patients about treatments not covered by the plan.
The General Assembly debate is expected to be highlighted by equally emotional issues, such as whether health plans can force mothers and their newborns to leave the hospital 24 hours after a vaginal delivery.
Plum said his bill was not an "attack" on managed care, but simply an effort to make sure that insurance companies, in their zeal to economize, do not go too far.
"This bill is designed to bring us back to a balance, back to a place in the middle where managed care can work," said Mark Rubin, a lobbyist for Virginians for Patient Choice, a coalition of health care providers and small businesses.
Among the provisions of Plum's HB 1393:
* HMOs would have to disclose the percentage of revenue they devote to patient care.
* Physicians could not be barred by contract from advising patients of options outside the network.
* HMOs could not drop providers from the plan without cause.
The most contentious point of the bill would allow patients to seek care outside an HMO network of providers without a severe financial penalty.
Opponents of the bill, led by the Virginia Chamber of Commerce, say this "point of service" option is a direct assault on the concept of managed care.
Sandra Bowen, director of the state chamber, said the plan would defeat the purpose of a coordinated system of care and drive up health costs for employers and employees.
The two coalitions have been gearing up for this fight for more than a year. Physicians, hospitals and insurance companies gave General Assembly members tens of thousands of dollars in campaign contributions last fall.
The economic stakes are so high for both sides that House Majority Leader Richard Cranwell, D-Vinton, predicted an eventual compromise.
Plum's bill and nine related measures have been sent to a special House Corporations, Insurance and Banking subcommittee headed by William Bennett, D-Halifax County.
Neither side was willing to budge Thursday when the full committee gave the bills an initial hearing.
Bowen said the situation does not lend itself to negotiation, because the disagreement falls along basic, fundamental issues.
"It's not a little jiggly here, a little jiggly there," she said.
"The door is so slammed shut," said Madeline Wade, a lobbyist for the physician-led group, "that it's going to take a General Assembly committee to open it again for discussion."
LENGTH: Medium: 89 lines KEYWORDS: GENERAL ASSEMBLY 1996by CNB