Critical Condition

Sandi Bergevin has a terrific internist, and she adores the ophthalmologist who has treated her glaucoma for the past 15 years. "It takes a long time to build up the trust," she says. "I feel he's taking care of me and is not going to let anything happen to me." But the 55-year-old hospital worker is not so sure about her HMO. Because its vision plan stipulates only three office visits a year, getting the care she needs usually involves a long series of appeals. And she worries constantly that things could get worse. Not long ago she learned that her employer is planning to switch to a different health plan--one that may not even do business with the doctors she knows and trusts. And nothing she hears about HMOs reassures her. "You hear the horror stories about when they let people die and stuff," she says. "It just blows your mind."

Welcome to HMO hell. According to a new poll--commissioned by the Discovery Health Channel and carried out in conjunction with NEWSWEEK--61 percent are "frustrated and angry" about the state of the health-care system. More than half believe that "fundamental changes" are needed--and seven in 10 favor some kind of action by the federal government. No wonder Washington is in such a lather. Six years ago, after the Clinton administration's failed effort to introduce managed care by fiat, health-care reform became a forbidden zone in national politics. Now, as the 2000 political season dawns, it's one of the hottest issues on the table. In Congress, Republicans are defying their own leaders to support sweeping "patients' rights" legislation. On the campaign trail, presidential candidates are unveiling plans to extend health coverage to the growing population of Americans who lack it. Even the White House is back in the game, with an ambitious plan to provide prescription-drug coverage for the elderly. All the big players in health care--not just drug and insurance companies but doctors' groups, consumer groups and retirees--are on a war footing. And the battles they're waging could ultimately touch almost every family in America.

Consumers are not powerless. Many now enjoy a choice of health plans--a choice that can be made wisely with the help of quality ratings like those appearing in this NEWSWEEK special report. But by many indications, the health-care system is a mess. Managed care was supposed to boost quality while holding down costs. But quality hasn't improved by objective measures--and after five years of relative stability, costs are on the rise. HMOs are raising their rates, prompting employers to trim or even eliminate benefits for their workers. And, partly as a result, the number of people without health insurance is exploding. According to a new report from the Census Bureau, 44.3 million Americans--some 16 percent of the population--don't have any coverage at all. Even as the economy booms, that count is rising by roughly a million people a year.

What are the prospects for reform? Some version of the patients' bill of rights will likely become law next year, but just what it will accomplish is unclear. Both House and Senate have recently passed measures to protect consumers from the managed-care industry. The House measure, adopted last month in a bipartisan landslide, would guarantee all HMO subscribers instant access to emergency care and out-of-network physicians. It would also let unhappy patients collect legal damages for harm they suffer as a result of denied benefits. The more modest Senate bill offers some of the same provisions, but applies to fewer plans and includes no right to sue.

Not surprisingly, consumers' and physicians' groups favor the House version. By their accounts, children are being maimed every day by stingy HMO bureaucrats who won't stop until someone starts suing them. The managed-care industry counters that if the House measure became law, it would set off a blizzard of litigation, driving up health-care costs, making insurance less affordable and forcing doctors to perform needless procedures just to avoid being hauled into court. Neither argument holds much water. In Texas, where lawmakers adopted a full-strength patients' bill of rights two years ago, the dreaded litigation outbreak never occurred--yet it's doubtful that the measure improved anyone's health. The fact is, millions of Americans receive flawed or inadequate medical care each year, and many are harmed as a result. But HMO members are at no greater risk than anyone else. As the Institute of Medicine's Roundtable on Health Care Quality concluded in a recent study, these problems "occur with approximately equal frequency in managed care and fee-for-service systems of care... Quality of care is the problem, not managed care."

While members of Congress fight over the rights of people who have medical insurance, the Democratic presidential contenders are focusing more on the plight of those who don't. Bill Bradley, who calls health care "an American birthright," wants to invite virtually all of the nation's uninsured into the Federal Employees Health Benefits Program (FEHBP), the 9 million-member health plan that covers government workers and their families. His bold scheme would provide subsidies to insure children in families earning up to 300 percent of the poverty level ($49,200). Adults would be eligible, too, as long as their household income was less than $32,800. Unfortunately, no one knows what Bradley's plan would cost; the estimates range from $650 billion over 10 years to $1.2 trillion--a figure that could devour the entire projected budget surplus. And because the plan provides such a broad safety net, critics worry that it would encourage employers to stop covering their workers.

Al Gore's proposal is less sweeping, and a bit more complicated. He would open an existing program for low-income kids (the Children's Health Care Insurance Program, or CHIP) to families earning up to $41,000. Families above that threshold could buy in at relatively modest rates. And seniors as young as 55 could buy early admission to Medicare. Gore's plan has a lower price tag than Bradley's (ostensibly $500 billion over 10 years), and its piecemeal approach may sit better with an electorate suspicious of big government. According to the Discovery poll, three out of four Americans believe that health insurance should be accessible to all, but they're reluctant to dole out assistance. Most prefer modest subsidies aimed at working people, the elderly and those with physical disabilities. Gore's proposal is true to that spirit (if you can think of a half-trillion dollars as modest). The catch is that it would reach only a third of the nation's uninsured.

Patients' rights and the coverage gap may grab headlines, but ask Americans what really worries them about the health-care system, and you'll get the same answer every time: cost. Only half of the Discovery poll respondents identify "restrictions on coverage" and "the move to managed care" as "very important" problems. Yet two thirds say they're very concerned that "health care is no longer affordable," especially for the elderly. And fully 70 percent voice great concern over the "high cost of prescription drugs."

As it happens, old folks are the leading consumers of prescription drugs. And because Medicare doesn't cover medication, many are feeling the squeeze. At least a third of them lack supplemental drug coverage--and those who buy it are being clipped by higher copayments and lower spending caps. The White House has proposed expanding Medicare to cover at least part of the cost. Under the Clinton plan, beneficiaries could buy into a subsidized drug plan covering 50 percent of prescription costs. The spending cap would start at $1,000 in 2002 and rise to $2,500 in 2008. That may sound like a boon for the pharmaceutical industry, but drug companies are fiercely opposed. They fear that as drug costs outstrip the program's resources, the Feds will institute rationing or price controls in an effort to break even. It's just a suspicion at this point--the plan includes no such provision--but the industry has launched a multimillion-dollar ad campaign in which a gal named Flo frets that big government is trying to take over her medicine chest. No one expects the Clinton proposal to become law this year, but Republicans in Congress are not dismissing it as a big-government boondoggle. As in the patients' rights arena, they're floating their own proposals for reform. Flo may like the status quo, but as the Discovery poll makes clear, the voters are ready to rumble.