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Managed carelessly: embracing HMO's is bad for the GOP's political health
National Review, July 20, 1998 by M. Stanton Evans
Embracing HMO's is bad for the GOP's political health.
Washington's endless healthcare wars have produced one of the most unusual double switches in recent memory, as each of the major parties has adopted the past position of the other. Not so unusual, perhaps, is that the congressional leadership of the GOP has thus marched into a cul-de-sac beset with perils, and is now desperately looking for an exit.
Four years ago, it may be recalled, the big health-care debate concerned the Clinton plan, which promised tax-assisted medical coverage to the great American public on a "universal" basis. As Republican critics pointed out, such a scheme would be enormously expensive, further increasing the upward pressure of demand that had doubled the percentage of GDP going for health care since the 1960s. Aware of this potential outcome, the Clinton planners added features to control spending.
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Among these were "managed care" and HMOs (health-maintenance organizations), not quite as famous then as they are today. In the Clinton set-up, financial aspects were so devised that most of us would have wound up in these programs, which seek to control health-care expense by policing doctors, barring access to specialists, and reversing the traditional incentives of so-called fee for service, in which providers get more money for doing more procedures. (In the basic format of managed care, providers can earn more money by doing less.)
Republicans, conservatives, and free-market health-care types were quick to denounce not only the Clinton plan in general, but its reliance on managed care in particular. An especially trenchant critique of the Clinton scheme was penned by Elizabeth McCaughey in articles for The New Republic and the Wall Street Journal. She correctly said that managed care is rationed care--and that this is one of many objectionable things you get in such a government-dominated system. Thanks to this and like dissections of its failings, the Clinton plan went down to well-deserved defeat.
That was then and this is now. When the congressional GOP surprised the world and came to power in 1995, it suddenly faced the daunting task of inventing health plans of its own, most notably in regard to Medicare and Medicaid. The runaway spending of these large and growing programs had to be contained if Republicans were to have any chance of meeting budget targets. In what seemed like nothing fiat, and with virtually no debate, the GOP in Congress (and the states) opted for managed care to get its savings--thus endorsing the very method it had protested under Clinton.
The most visible symbol of this strange demarche was none other than Elizabeth McCaughey herself, who in 1994 was elected lieutenant governor of New York. The following year she became the point-person for the Albany regime (perhaps, if later quarrels are any guide, against her wishes) in putting Medicaid patients in HMOs. She was, however, not alone in this regard; numerous other GOP state administrations have zealously plumped for managed care from that day to this.
With Republicans launched on this odd reversal, the Clinton White House and Democrats in Congress have conducted an about-face of their own, heading in the opposite direction. While by no means disowning managed care, they could hardly fail to note the furious public backlash against HMO methods of care denial--patients released from hospitals prematurely, "gag rules" on physicians, and so on. As expert victimologists, the Democrats readily grasped that here were numerous victims made to order, to be saved from deadly harm by federal action.
This tactic is the more compelling for liberal politicians given the way that HMOs and managed care are usually (and misleadingly) treated in our discourse. HMOs, after all, are "businesses" that "make a profit," and when looked at in this light they make marvelous villains for leftward-ho crusaders. The package, indeed, is almost irresistible. Businesses making profits by denying health care to suffering people--all courtesy of the Republican Party. Clinton, Gore, Carville, et al. must be rubbing their eyes in amazement as this fat target looms before them.
A wild card in all of the above is Republican Congressman Charlie Norwood of Georgia, a dentist with no liking for HMOs, who has a formidable bill in the hopper (H.R. 1415) to smite them. Called the Patient Access to Responsible Care Act (PARCA), it boasts more than 230 co-sponsors in the House (a companion bill in the Senate, offered by Al D'Amato of New York, has a much smaller number). PARCA is a compendium of anti-HMO restrictions, culled from dozens of such enactments in the states. It would require access to emergency rooms and specialists, forbid "gag rules," and open HMOs up to malpractice judgments.
That the Republican Norwood has taken the lead in this respect, and that PARCA has been the foremost anti-HMO proposal in the House, obviously gives congressional GOPers an escape from the political danger in which their leadership has placed them. For months, however, the pro-managed-care line among the leaders has grimly held, resulting in much frustration and bitter squabbling behind the scenes. Finally, in the latter part of June, that line began to crumble: a House Republican task force came up with a compromise that seeks to unite the differing factions (and, not so coincidentally, give the party some protection against the mounting political hazards of the issue).
