Steven S. Sharfstein, M.D.

Viewpoints
Psychiatric News, vol. XXXIII, number 18, September 18, 1989.

The consumer backlash against managed care denials has become a major election year issue. A presidential commission on which I served and moderates in the Democratic and Republican parties have proposed regulatory reforms to fix this managed care mess through a set of procedural protections called, "A Patient's Bill of Rights." This effort by government to reform managed care proposes rules of disclosure, appeals, due process, requirements for access, and measurement of quality.

The Republican and Democratic proposals differ in certain crucial respects. One significant difference is that the Democrats want to give patients the right to sue their managed care company for denying necessary care.

The proposed solutions to the problems are sensible and necessary; indeed, they have a certain common sense about them such as being able to have emergency care paid for as determined by a prudent layperson standard.

The problem with these reforms is that they are based on the following assumption: that we need managers to run our medical system because we cannot trust doctors and patients in the medical marketplace.

Managed care disrupts the doctor-patient relationship by taking from consumers the right to pick their physicians, to continue with their doctors if their employer switches managed care plans, and to use the most convenient emergency room or diagnostic laboratory. Doctors have lost control of such options as ordering more expensive treatments they feel are necessary and superior, sending patients to specialists they respect, and spending some extra time with patients who need it.

I'm not suggesting that we should go back to the old fee-for-service system in which we could order as many treatments and expensive procedures as we wanted or hospitalize as long as we liked, and third party insurance companies would pay the bills without question and then raise premiums for employers and employees. This leads to a ruinous inflationary health care cost spiral.

What I am suggesting is that there are proposals coming from the left and the right that provide, to my thinking, better solutions than trying to regulate our managed care woes away. Both proposals have in common elimination of the managed care industry.

The proposal I prefer is a Canadian-style single-payer system in which Washington would collect the money, set the fees, and monitor the provision of care. This proposal would essentially extend Medicare to the entire population. Let's not forget that more than 40 million Americans lack health coverage, and with such an approach, everyone is covered. What I particularly like about such system is that physicians continue to work for themselves and have greatly reduced paperwork since they only have to deal with one payer. Patients are able to choose their doctors although they may not get everything they want, and no clinician is paid a bonus for denying proper care.

The down side of single payer is coping with global budgets and government bureaucracy. The upside is access and the elimination of administrative waste of for-profit managed care.

Perhaps what we need is a single-payer system that provides basic coverage for everyone and then allows consumers to buy extra insurance for higher level coverage- the kind of system that is found on the continent of Europe.

Almost as good as single payer is the proposal from the right that would replace managed care with medical savings accounts (MSA). Under this proposal, individuals put their money into tax-sheltered savings accounts that are dedicated to medical care. They can withdraw funds to pay for ordinary medical expenses, but since they are spending their own money, they have a strong incentive to spend these dollars wisely. The patient can choose his or her own physicians, and the doctor-patient relationship is not disrupted. Such an account includes the purchase of a catastrophic insurance plan to cover illnesses requiring expensive treatment. The down side of MSAs is that they do not provide for universal coverage; indeed, there may be more uninsured people as a result of a shift to MSAs, since they compromise the spreading of risk across populations and thus leave less money available to insure the people who remain in traditional insurance plans.

In the long run we don't need to perpetuate the status quo with a piecemeal fix that regulates care illness by illness and forces payers to provide for extra days in the hospital or an elaborate process of appeals before patients can access necessary and expensive treatment.

Profit-oriented managed care us corrupt at its core. We need a more radical solution.

Dr. Sharfstein is president and medical director of the Sheppard Pratt Health System in Baltimore, MD.