V. THE HEALTH SECURITY ACT RATIONS HEALTH CARE THROUGH A TIERED SYSTEM BASED ON PRIVATE INTERESTS

It is only recently that the need for reform was characterized as a need for universal access. Health care reform was motivated not by the desire or need to provide better access, but by a concern for cost containment. More specifically, they were motivated by problems associated with uncompensated care and the cost of health care to employers and the government. To control costs, individuals, providers or health insurance plans will need to ration care. The Act places the rationing function in the hands of managed care plans owned by private enterprise. Private enterprise, however, will not be able to control cost if the majority of Americans do not elect managed care plans. Consequently, universal portable coverage has been offered as the quid pro quo for accepting managed care rationing. Snake oil salesmen are selling managed care with the following pitch:

Your doctor will still be responsible for making decisions about your health care. However, we all know that there is way too much waste in the health care system. This waste raises the cost of care for all of us. The managed care organization will merely look over your doctor's shoulders to assure that the waste stops. Look at what you are going to get in exchange for a little gatekeeping, a little utilization review-universal, portable coverage.

Sadly, the HSA envisions not across-the-board rationing, but the continuation of a tiered health care system with rationing only for some. The reformed health care system will continue to ration health care based on economics. It will continue to ration health care based on race. It will continue to ration health care based on class. Universal portable coverage, by itself, is not good if, in fact, the care received is discriminatory, inadequate, incompetent and inappropriate. The Act contains a number of provisions for federal funding in an attempt to assure care to ethnic Americans, but financial incentives will be inadequate, and as a result, a multi-tier system will continue to exist. A. Health Care Plan Tiering

In addition to the coverage difference between cost-sharing policies, the higher cost-sharing fee-for-service option and the combination option will charge higher premiums. It is assumed that cost-conscious consumers will respond to differences in premiums by not spending their own money to purchase relatively expensive fee-for-service or PPO plans. Many consumers, particularly middle-class consumers, however, will not be satisfied with minimal health benefits. Individuals with significant health problems are likely both to want comprehensive benefits and to stay with their current physicians. Furthermore, many consumers will not be responsive to the premium difference. But, those who are likely to be the most responsive to premiums are the ethnic Americans and the poor, resulting in a health care ghetto.

Will these plans use their higher premiums to provide different services to their clients? Supporters of the Act argue no. Proponents argue that because all plans are required to provide access to the same basic comprehensive services, these plans will provide more amenities, not more services, i.e., better carpet on the floor, quicker service. However, proponents fail to realize that these amenities can make a difference in quality of care. For instance, quicker service is vital. Quicker service can make a difference in health status, if quicker service means that a person can see the provider within a day or two and the alternative is a two-week wait for an appointment. Quicker service can make a difference in health care seeking behavior if a person has to wait in a waiting room for 2-3 hours to obtain service rather than 15-20 minutes.

Moreover, higher cost-sharing plans and combination plans will provide more than amenities; they will provide more services. For example, the basic health care benefits allow for a pap smear once every three years. Presumably, individuals with the higher cost-sharing plan could obtain a yearly pap smear. If yearly pap smears diagnose cervical cancer earlier than the basic health care benefits, then women in the higher cost-sharing and combination plans (primarily upper middle- income and European American women) will have better health care than women in the lower cost-sharing plan (largely ethnic American and poor). Furthermore, lower cost-sharing plans will be managed care plans while the higher cost-sharing plans will be fee-for-service plans. Managed care plans ration health care by using physicians as gatekeepers and by using strict utilization criteria. Fee-for-service plans ration care based on ability to pay.

Notwithstanding the explicit rationing that occurs based on the medically necessary concept, the plan also provides for implicit rationing based on economics. First, the plan has significant deductibles and co-payments. While health coverage is guaranteed, everyone will pay some out-of-pocket money for co-payments even if they are unemployed, homeless, disabled or poverty stricken. And while the HSA provides that failure to pay premiums will not result in loss of coverage, co-payments take place at the point-of-service. It is unclear whether inability to pay will restrict access at point-of- service. But even if it does not in theory, it may still serve as a barrier to service. Some individuals who are unable to pay will want to avoid being embarrassed at the point-of-service, while others may want to avoid the civil monetary penalties, which could amount to as much as $5000 for repeated failure to pay.

Second, the Act requires each family to pay 80% of the premium. One obvious problem is the potential growth of the insurance premiums. The HSA reduces the rate of growth to the overall level of inflation by capping the growth of the premiums. A cap on expenditures will provide a disproportionate advantage to higher income families because a smaller percentage of their income will be directed toward health care. Furthermore, a premium cap will probably result in rationing by health care plans as a method of maintaining profits. Consequently, higher income individuals and families with more disposable income will be able to buy themselves out of the rationing bind.

Families enrolled in Regional Health Alliances are entitled to a premium discount if the family is an AFDC or SSI family, has an adjusted family income below 150 percent of the applicable poverty level, or incurs a family obligation amount exceeding 3.9% of the adjusted family income. But what happens to a family whose income is 151% of poverty? Eligibility for subsidies is rigidly means-tested on an annual basis, and burdened with retroactive penalties and redetermination, including investigation of tax returns. Like Medicaid, the HSA excludes help for many who need a subsidy. Furthermore, federal subsidies are not available for families who choose to register in a corporate alliance. Corporate alliances are required to provide a premium discount to low-wage employees, defined as any full-time employee earning less than $15,000 annually. Consequently, a person earning less than $18,000 but more than $15,000 will be penalized for working; had they enrolled in a regional alliance they would have been eligible for premium discounts. The net result is that health care will be more illusory than real for many working poor.

The HSA allows the higher cost-sharing (fee-for-service) plans to perform utilization review, to require prior approval for specified service, and to exclude providers because of poor quality of care. While these provisions provide some aspects of managed care plans, the Act specifically provides that prior approval for specific services shall not be construed as permitting a plan to require prior approval for non-primary health care services through a gatekeeper or other process. Thus, the HSA allows a person to buy their way out of gatekeeping rationing. And so, when people pay higher premiums for a higher cost-sharing (fee-for-service) plan, they are actually saying: Don't ration my care. Don't use any gatekeeping mechanism that can ration care to me. I want to be able to get whatever I can afford to buy. Consequently, even with utilization review, individuals in higher cost-sharing plans will have greater access. As one commentator has noted:

These plans would entice middle- and upper-income groups to pay more of their after-tax income for more choice of physicians, shorter waits for appointments with primary care physicians and specialists, more conveniently located physicians, hospitals, and pharmacies, and/or broader coverage. Market segmentation would adversely affect people who are unable to afford more than a basic plan. They would find that there are not enough plans with enough capacity willing to participate; they would find few providers willing to serve them; and they would have less access to specialty care and expensive medical technologies.

Thus, many of the inequities in the current system will continue to exist: individuals will be tiered among health care plans; few plans will choose to market aggressively among ethnic Americans and the poor; physicians will refuse to join plans that have too many ethnic Americans and poor individuals. B. Health Care Service Tiering

Even where physicians and plans accept ethnic American patients, they may discriminate in dispensing medical services. This problem exists in the current system and will be aggravated by the HSA, because the Act places premium limits on health care plans, but does not place limits on the types of managed care that plans can institute to make a profit and provide services. Consequently, plans, through utilization review, may find it easier to deny services to ethnic American patients rather than to middle-class European American male patients. That is, even under the same health care plan, it will be easier to deny services to the less articulate, persons preceived as powerless, etc. Consequently, health care plans may, in fact, provide different services based on race and class. This is particularly true since the adjustment of premiums based on regional trends compared to national trends does not specifically include adjustments based on race and ethnicity. Thus, ethnic Americans who are sicker than European Americans will seek more services. Yet, health care plans may not be compensated adequately for the difference because of the failure to adjust the premium. Granted, the HSA allows for adjustment based on demographic characteristics. For instance, it requires age, gender, socioeconomic status and health status to be considered. However, socioeconomic status and health status are only partial and inadequate substitutes for race and ethnicity.

Arguably, this problem exists in the current health care delivery system. But the problem with the Act is not just that it retains the problem, it institutionalizes and condones it. Every poor person, every unemployed person, every person who does not have the money to get into the higher cost-sharing or combination plan will be in some form of managed care plan, if not by explicit choice, at least by economic reality.

Most middle-income Americans will obtain their health insurance through their employment. The Act is designed to economically tempt these individuals to choose a managed care or combination plan. Managed care plans will not only have a lower premium but also require a smaller out-of-pocket cost. Given the choice of going to the health care provider of your choice while paying a $3000 deductible and 20% of the cost afterwards (higher cost-sharing/combination plan), or paying no deductible and only $10 per physician visit (managed care), many middle-income persons will have to choose managed care. Although every health care plan will theoretically offer the same comprehensive basic services, they will do so through different organizational structures with different gatekeeping mechanisms and different utilization review standards. Currently many employers offer a traditional fee-for- service plan and a managed care plan as an alternative. The same incentives exist in the HSA. However, the Act goes beyond the existing system. It legally delegates to private enterprise (insurance companies) the rationing of health care in America. Thus, health care plans will ration health care differently, since theoretically in the current system private physicians still make the ultimate decision on medically necessary care.

Insurance companies will ration health care to those services deemed medically necessary, based on standards, guidelines or practice parameters. In fact, the Act specially provides that no benefits are available unless the benefit is medically necessary or appropriate. While the HSA gives authority to the National Health Board to determine when a specific item or type of service is not medically necessary or appropriate, it apparently leaves to the health care plan the authority to determine medical necessity on an individual basis.

Several issues are presented by limiting health care based on medical necessity. First, because medical necessity is based on utilization review decisions and financial risk-shifting at the insurance level, the patients are not likely to know that their treatment was reduced or a service was denied. Second, decisions which find that a service is not medically necessary at best will be based on a concept of utilization review, a series of working hypotheses and partial solutions that are continually revised, discarded, and even reinvented as changes occur in medical technology, social values, economic conditions and other circumstances. Third, given that most health care research has been based largely on European American males and that providers are largely European American males, medical care decision-making is culturally biased. This is particularly troublesome since ethnic Americans suffer from more health problems than middle-class European Americans. Finally, the most significant problem is the lack of any authoritative guidelines as to what constitutes medically necessary. Consequently, the decision is left to the whims of insurance companies. This arrangement invites discrimination.

Requiring the plans to rely on qualified physicians does little to protect the individual from the culturally biased vagrancies of utilization review. Plan physicians are not likely to contradict their employer's decision to deny service, which means that we are institutionalizing a decision-making process that is largely determined by middle-class European American males.

In sum, cost sharing, co-payments, supplementary policies, reliance on volunteerism instead of mandates, temporary special programs and set-asides continue institutionalized elitist health care. Because of barriers and tiering, ethnic Americans and poor communities with the worst health status and most complex health care problems will be penalized as they are forced to pay premiums, co-payments and deductibles that they cannot afford. To be effective, market choice requires the financial means to choose and requires plans to be willing to serve ethnic Americans. Absent these factors, managed competition would limit the choice of low income and ethnic Americans.

C. Health Care Physician Tiering

Even among physicians there will be tiering. Plans must limit the number of physicians who operate in the plan to control costs. They may limit participation to board certified physicians. Plans with lower premiums will have more restrictive utilization review and gatekeeping mechanisms. Managed care plans must have physicians willing to abide by their utilization review standards and gatekeeping guidelines. As a result, younger, less experienced physicians will begin their careers in the managed care plans, while the older, more experienced physicians will practice in fee-for-service plans, with obvious implications for ethnic Americans and the poor.

If quality of care is related to the experience of the providers, then the more costly fee-for-service plans will offer higher quality service because they will be more attractive to the more experienced physicians. Furthermore, even though physicians may participate in more than one plan, physicians may limit the number of patients from the lower cost-sharing plans if those plans pay them less than the higher cost-sharing, fee- for-service plans. Since nothing in the HSA requires that a physician accept any patient from any plan to which the physician belongs, eventually individuals may find that significantly fewer physicians are available in lower cost-sharing plans. The lack of adequate protections will inevitably result in limited access for ethnic Americans. As one author has noted, It is difficult to imagine how managed competition will not result in a class-based access through a multi-tiered system of benefits and eligibility. Moreover, both insurers and health service groups will find it easiest to compete via favorable selection of healthier groups.

In conclusion, although the lowest-cost plans will be the ones that are the least desirable, they are likely to be the only ones affordable to the poor. They may also be the only ones available to serve ethnic American communities. Although all plans would be required to provide a comprehensive benefit package, ethnic Americans enrolled in basic plans may find it difficult to obtain many of the services that are covered by the plan. Because low-cost plans would be unable to match the fees paid by higher-cost plans, many providers will not contract with them. Consequently, ethnic Americans and the poor enrolled in the basic plan will have limited-access and sometimes lower-quality health care.