by John M. Curtis
(310) 204-8700

Copyright June 13, 2000
All Rights Reserved.

ulling the rug out from underneath Clinton’s Patients’ Bill of Rights, the Supreme Court ruled unanimously [9-0] that rationing health care is an acceptable practice by health maintenance organizations [HMOs]. Slamming the federal courthouse door, disgruntled patients will no longer have the option of suing HMOs for denying or delaying needed medical care. Affirming the HMO’s right to profit, the Supreme Court unambiguously opted to preserve the HMO’s business model of providing affordable health plans to America’s bargain-hunting employers. Against the Supreme Court’s dramatic ruling, California’s largest medical group announced that it can’t pay its bills and may seek protection under state bankruptcy laws. KPC Global Care, owned by the entrepreneurial Riverside County physician Dr. Kali Chauduri [formerly MedPartners, and, before that, Mullikin Medical Centers] admitted to losing over 2 million dollars a month, projecting an optimistic corporate life-span of about two more months.

       In what amounts to a stunning disconnect, Justice Souter, speaking for the court, observed, "Judges and courts are in a poor position to decide whether these health care plans [HMOs] are good social policy or bad . . . that is a decision better left to lawmakers." Isn’t passing judgment on relevant social or moral issues the hallmark of an activist Supreme Court? Passing the buck, the Supreme Court decided that they’re more concerned about the financial health of HMOs than the wellbeing of patients and doctors. Throwing managed care critics for a loop, Justice Souter noted, "Whatever the HMO, there must be rationing . . . [It] goes to the very point of any HMO scheme." Even more shocking, "Rationing necessarily raises some risks while reducing others (ruptured appendixes are more likely; unnecessary appendectomies are less so)," Souter wrote. Who’s he kidding? Rationed care represents a serious health risk to millions of HMO subscribers, whose undiagnosed conditions and premature deaths have become all too common.

       Hailing the ruling, "This means the survival of HMOs," said Carter G. Phillips, the Washington attorney who defended the HMO against the lawsuit filed by the subscriber whose appendix ruptured because of rationed care. While hyperbole goes with the territory, what kind of message is now sent to HMOs? Squeeze medical groups, ration benefits, or, worse yet, exaggerate fictional benefits to seduce employers into signing up? It’s all fair game now. Telling HMOs it’s OK to ration health benefits is like inviting Saddam Hussein back into Kuwait. Now that it’s OK for plans to ration care, what’s the point of California’s new department of managed care? Fighting tooth and nail to oppose such a department, HMOs claimed it would only add to rising costs. With HMOs already hammering down monthly fees to medical groups, multi-specialty practices like MedPartners or KPC Global Care are the ones forced to do the rationing.

       Washing their hands of medical care, HMOs can conveniently blame physician groups for denying subscribers access to health benefits. Too often the finger has pointed at HMOs when, in reality, gatekeepers at the medical groups talk patients out of using their benefits. Citing a lack of medical necessity, doctors—not HMOs—take the heat for preventing patients’ access to medical care. With the new ruling, lawsuits are thrown back into the laps of physicians, whose malpractice policies are forced to pay the freight. With groups like MedPartners going under because of abysmal reimbursement, what other choice do doctors have other than rationing care? Rationing was always considered a last ditch attempt by medical groups to protect profit margins. With the court’s new ruling medical groups are now given, carte blanche, the right to rob patients of their contractual benefits.

       "The court . . . is strongly hinting that, if an HMO turns down a medical treatment based on a medical judgment and the patient is injured, [it is] liable under state law," said Marc Machiz, a lawyer representing plaintiffs in managed care cases. Yes, of course, trial lawyers can go after unscrupulous HMOs or medical groups in state courts. But that doesn’t begin to deal with the millions of seniors now enrolled in Medicare HMOs or millions more of indigent enrollees in Medicaid HMOs. What Justice Souter failed to mention was Aetna’s decision to pull the plug on its Medicare HMO plans. With the Health Care Financing Administration [HCFA] saving millions of Medicare dollars by paying HMOs, the court was going to do its utmost to protect the coffers of HMOs. With the court’s global ruling, they’ve opened Pandora’s box now that HMOs can weasel their way out of liability.

       Under the threat to terminate participation in federal HMO programs, the Supreme Court bowed to pressure from special interest groups tied to the HMO industry. Denying HMO patients the right to sue in federal court doesn’t begin to come to grips with how HMOs strangle medical practices seeking reimbursement for services. Placing physicians at risk—on restrictive budgets known as capitation—HMOs guarantee that doctors will either go broke or be forced to dangerously ration medical services. While Justice Souter saves his sympathy for publicly traded corporations, his real concerns should be with doctors forced by economics to violate their Hippocratic oath and deliver inferior medical care. Today’s advocates of penny-pinching managed care claim that health care can’t return to the obsolete fee-for-service system. What they fail to mention is that Medicare and Medicaid are primarily fee-for-service programs and doing just fine.

       The Supreme Court ruling highlights how today’s HMO, managed health care model fails both doctors and patients. Its restrictive budget punishes physicians for practicing responsible medicine and turns back the clock on quality care. What makes Medicare so successful is precisely what HMOs say can’t work—paying doctors reasonable fees for their services. If it works for Medicare why shouldn’t it work for commercial plans? Sure there’s waste and fraud, but there’s also inordinate mismanagement in HMO bureaucracies robbing health care dollars from doctors and patients. With all Americans in the same boat, it’s time to cure today’s ailing managed health system. Despite the Supreme Court’s current ruling, rationing medical care is not the answer.

About the Author

John M. Curtis is editor of OnlineColumnist.com and columnist for The Los Angeles Daily Journal. He’s director of a Los Angeles think tank specializing in human behavior, health care, political research and media consultation. He’s the author of Dodging The Bullet and Operation Charisma.

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