Investor’s Business Daily, August 1, 2001

“I hope to sign a bill that gets people help when they need it,” declared President George W. Bush in a recent radio address, “not a bill adding hundreds of dollars to the premiums they already pay.”

Considering the raw material he’s forced to work with—the patients’ bill of rights (PBR) already passed the Senate and soon to be under consideration in the House—there’s a slim chance of that. The truth is that the goals the bill purports to achieve—guaranteeing Americans certain rights vis a vis their health care plans—are already being offered voluntarily by most plans or compelled by most states.

Recall that five years ago, the driving issue behind the PBR was patient access to doctors. Today, more privately-insured Americans are enrolled in the more flexible Preferred Provider Organization (PPO) than in Health Maintenance Organizations (HMOs). The Journal of the American Medical Association reports that 44 percent of Americans are enrolled in plans that includes a point-of-service (POS) option, an arrangement that allows patients to self refer to specialists by paying extra. Even more important, three in four Americans have the option of choosing such a plan.

When Kennedy and company first started pushing the PBR in 1996, few states offered a patients’ bill of rights on their books. Today, all but five states have them. 43 states already allow women to designate an ob-gyn as their primary care doctor, 42 states and the District of Columbia mandate access to emergency services, 41 states have requirements for independent review of denied medical care, and this list goes on. This makes sense, as health care has traditionally been regulated at the state level. That’s why it’s not a contradiction for Governor Bush to allow a patients’ bill of rights to become law in Texas but for President Bush to veto one.

This, of course, begs the question. If health plans are already providing most of what’s mandated by the PBR, what’s the harm of passing it? Plenty. The political process is slow and cumbersome. By requiring certain procedures, with the promise of more to come, the federal government will stifle innovation and experimentation with new delivery systems. The health industry, which is still private, thrives only by responding to the needs of its customers. Today, it’s more or less the purchasers of health insurance who make the trade off between flexibility and price. During our long prosperity, it’s little wonder that Americans chose to demand more health care, and not to overly worry about price. Employers needed employees, employees were happy to take compensation in the form of health benefits. But as the economy slows, people may choose more restrictive and less expensive care over the alternative. Empire Blue Cross and Blue Shield, major New York insurers, report that companies are currently opting for HMOs at twice the rate they were last year.

The important fight over the bill’s lawsuit provisions has, in fact, obscured an extremely important feature of the bill. It puts the federal government squarely in the business of establishing health benefits. The basic benefit package may be limited today to only the juiciest poll-tested provisions ’provproviding women with the right to go to an ob-gyn, children the right to pediatricians, and everyone the right to specialists—but there’s no reason to think politicians won’t keep adding to the list. This is exactly what’s happened at the state level, where mandates have increased from under 50 in 1970 to nearly 1,000 in 1996. It’s an airtight political scheme. Pass a mandate, take credit from an interest group, and pass the bill to someone else. This dynamic helped to drive many companies into the federally-regulated self-insurance market. With the feds in the game, there’ll be no escape.

The long-term result will be increasing costs, increasing uninsured, and increasing calls for the federal government to do something. Managed care, the current bogeyman, stepped in as the solution to the last cost/uninsured spiral crisis in health care. We all know what solution Senators Kennedy and Clinton will come up with next. It’s not one that will please President Bush, or many others who appreciate the benefits of a free market.

Sally Pipes is the President and CEO of the Pacific Research Institute, a California-based think tank. She can be reached via email at spipes@pacificresearch.org.