[Congressional Record Volume 144, Number 80 (Thursday, June 18, 1998)]
[House]
[Pages H4826-H4832]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




               POSSIBLE CURES FOR ABUSES IN MANAGED CARE

  The SPEAKER pro tempore (Mr. Hayworth). Under the Speaker's announced 
policy of January 7, 1997, the gentleman from Iowa (Mr. Ganske) is 
recognized for 60 minutes as the designee of the majority leader.
  Mr. GANSKE. Mr. Speaker, it has been a long day here in the House 
with a lot of debate about campaign finance reform, and as our 
colleagues on the other side of the Capitol have been debating for 
almost 4 weeks until it ended yesterday, a debate on tobacco 
legislation, which appears to be at least significantly set back. We 
have a debate going on on campaign finance reform which is much needed, 
and it appears as if we may have a 3 or 4 week debate on that as well. 
I hope that the outcome comes out better than that.
  But I want to speak tonight about another issue that has been bottled 
up in Congress for a couple of years that has broad bipartisan support, 
something that is very important to our constituents back home and to 
every American, and that is the issue of abuses in managed care and 
whether we ought to have some minimum standards, Federal safety 
standards for managed care.
  I frequently hear my colleagues who oppose this saying, well, let us 
not legislate by anecdote. I mean, heaven forbid that we should ever in 
this body legislate by anecdote. The problem is that these anecdotes 
are real people, and they are all over the country, and

[[Page H4827]]

we can read about them in newspapers at home, and nearly everyone knows 
somebody or has a family member that has been affected by abuses in the 
managed care industry.
  Here we have a headline from the New York Post: ``HMO's Cruel Rules 
Leave Her Dying for the Doc She Needs.'' Does that seem harsh? Well, 
how about this case history of one of these ``anecdotes.'' Although I 
really do not think we would want to call Barbara Garvey an anecdote to 
her family.
  Barbara Garvey is a 54-year-old Chicago woman who fell seriously ill 
when she was vacationing in Hawaii. The doctors in Hawaii correctly 
diagnosed her condition and advised the Garveys that she needed a bone 
marrow transplant immediately. Then the physicians cautioned the couple 
that Barbara should not travel back to Chicago for this treatment since 
this could increase the risk of her suffering a cerebral hemorrhage, or 
infection during her air travel. So they phoned her doctor back in 
Chicago who agreed with the Hawaiian doctors; take care of her in 
Hawaii. Travel by an airplane in her condition is too dangerous. 
However, the HMO bureaucrats told Barbara's husband, David, that the 
HMO would not be responsible for her treatment if she remained in 
Hawaii, and that she should return to Chicago. In route to Chicago, 
Barbara suffered a stroke that left her right side paralyzed and she 
was unable to speak. When she arrived in Chicago, she was admitted to 
St. Luke's Medical Center where she died 9 days later of a stroke.
  The HMO then attempted to use a legal loophole to avoid all 
responsibility. That loophole is contained in a law known as the 
Employee Retirement Insurance Security Act of 1974, ERISA, which was 
enacted well before the era of managed care and was intended to provide 
workers with benefit protections. The HMO claims that because Garvey 
received her health care through her employer, the Garveys cannot 
receive damages for Barbara's death.
  HMOs have been using ERISA, in many cases successfully, to shield 
them from the accountability of their decisions, when they tie the 
doctor's hands and they direct a patient's care leading to injury, or 
even, in the case of Barbara Garvey, death.
  Well, I guess the opponents to this legislation would just say, gee, 
we should not legislate by anecdote.
  Well, how about the case of Betty Wolfson. This is told by her 
daughter. The dispute between my mother and her HMO arose when the 
HMO's doctors recommended a course of treatment that world-renowned 
neurosurgeons at UCLA medical centers believe will endanger her life. 
We wanted a second opinion because my mom has an artery in her brain 
the diameter of a golf ball that is full of blood clots. It has caused 
her to go blind in one eye. At any time she could completely lose her 
sight and suffer a massive stroke, or die.
  Initially my mom's HMO stated there is no appeal process. Finally, 
someone explained there was no ``complaint department,'' only a 
``customer satisfaction department.'' By the sheer fact that HMOs have 
endless financial resources, her daughter continues, this makes it a 
cinch for her HMO to prevail. When this process bankrupts my mother and 
forces my folks out of their HMO, it is often taxpayers that end up 
picking up the tab, saving the HMO from having to shell out for 
expensive medical treatments.
  Her daughter continues, Sadly, our story is not unique. ERISA, the 
Employment Retirement Income Security Act, contains a loophole that 
allows HMOs to sidestep accountability for denying or delaying medical 
care. If this loophole were closed now, families like ours would not 
have to suffer financial and emotional ruin to get adequate help for 
our loved ones.
  Mr. PALLONE. Mr. Speaker, will the gentleman yield?
  Mr. GANSKE. I yield to the gentleman from New Jersey.
  Mr. PALLONE. Mr. Speaker, first of all, let me say that I am very 
pleased to see the gentleman here again tonight talking about the need 
for managed care reform or patient protections, because I believe, as I 
have said before, that this is the number one issue facing this 
Congress. It is the issue that I hear most often when I talk to my 
constituents and our constituents throughout this country, be they 
Democrat, Republican, Independent; regardless of party affiliation, 
regardless of State, are demanding action on these patient protections.
  I just wanted to make a brief comment which is that the gentleman 
really points out how this is nothing more than a very common sense 
approach to quality health care. The gentleman mentioned anecdotes, and 
of course they are not, they are real people and we know that they are 
real people, but beyond that is the notion that, and I have said this 
before, in my constituents' minds and I think most Americans' minds, 
when they hear the types of things that the gentleman is relating, they 
cannot believe it because they assume that their insurance company, 
whether it is an HMO or whatever kind of managed organization, would 
follow common sense precepts. In other words, they would not assume 
that because one is in Hawaii that one has to take a plane contrary to 
one's health and come back to Chicago.
  They would not assume, for example, that if one needs to go to an 
emergency room, that one would have to go to one 40 miles away rather 
than the one that is around the corner, because that particular 
hospital is not part of the network. They assume that if someone has to 
have access to a particular type of care, specialty care, for example, 
that the specialist is going to be available and that the HMO will not 
deny them.
  I think even more so, as the gentleman pointed out, is that when I 
talk to some of my constituents that have had problems with HMOs, they 
talk about the lack of an appeals process that they can really utilize, 
because again, if a mother has to take care of a sick child or a father 
has to take care of a sick child and they are working, they do not have 
the time to spend 9 hours a day going through some obscure way of 
appealing a decision. They have to have a very easy way to take an 
appeal to someone who is actually going to hear it in an expedited way.
  I have found, as the gentleman said, that a lot of these problems 
with HMOs, essentially what happens is that if someone does not want to 
accept a decision that has been made with regard to a particular type 
of care or access to a specialist or use of particular equipment, that 
people essentially give up because they do not have the time or the 
wherewithal to go through the appeals process, and that should not be. 
That is what is so egregious I think about the system that is set up.
  Of course, the other aspect that the gentleman points out is the 
inability to sue the HMO when they make a mistake or they make a 
decision that actually damages someone or kills someone. Again, I do 
not think most people would think that they have lost the right to sue 
because of the Federal law that is out there.
  So all we are really saying, all the gentleman is really saying is 
that we need some common sense patient protections that apply to all 
HMOs, to all managed care organizations, to all insurance companies, 
and that those basic patient protections, that ``floor,'' if you will, 
needs to be put in place. Otherwise, we have people dying and people 
getting seriously ill, and the long-term consequences of that not only 
are bad for the individuals, but in many cases cost the taxpayers even 
more money because they end up footing the bill.
  So I just want to thank the gentleman again for these examples, 
because I think that when we use examples, that is the way people will 
understand it. But unfortunately, we are going to have to somehow get 
this into the heads of some of our colleagues, because although there 
are a lot of people that support this, there are a lot unfortunately 
that make it difficult to bring up the legislation.
  Mr. GANSKE. Mr. Speaker, reclaiming my time, I appreciate the 
gentleman's comments, because he is getting to a point that I will get 
to a little bit later, but we might as well get to now. I am going to 
talk about some more examples tonight, but it is not as if we have not 
had several bipartisan bills sitting here in Congress this year, last 
year, bipartisan bills in 1996 with over 300 cosponsors dealing with 
this problem with no standards for people who are in HMOs and are 
receiving their insurance through their employer in a self-insured plan 
because of Federal law.

[[Page H4828]]

                              {time}  2245

  We have two bipartisan bills now, right here sitting here in Congress 
waiting to be acted on. One is the Patient Bill of Rights. The other is 
the Patient Access to Responsible Care Act.
  The second one has about 230 cosponsors. Just by the number of 
cosponsors alone, if it were on the floor today it would pass. I happen 
to think that when and if we can get one of these bills to the floor, 
and overcome the leadership's objections to this legislation, that 
legislation will pass overwhelmingly in a bipartisan fashion.
  But why is it being held up? What is the problem? I mean, it is not 
as if the American public is not calling for this. It is not as if the 
American public is not well aware of these problems, which I will going 
to go into in more detail. Nine out of ten Americans by survey today 
say: Please, give us some Federal legislation for some minimum quality 
standards so that when we get sick, our HMO will give us the care that 
we need.
  Mr. PALLONE. Mr. Speaker, if the gentleman would yield, I think it is 
pretty obvious. And I do not think we need to do any more than ask the 
average American. I am sure they would articulate and be right in 
saying that it is the insurance industry, of course, that is continuing 
to lobby in Congress to prevent this legislation from coming forward.
  The fact of the matter is they spend a lot of money on advertisements 
and other ways of trying to influence what goes on here. So I have no 
doubt that the reason why the leadership has been unwilling to bring 
this to the floor is because of the opposition from the insurance 
industry.
  We have had this so often with health care reform in general. But 
this, of course, hits at the very heart of the HMO and the managed care 
industry, because they fear that somehow by us putting these patient 
protections in effect, that they are going to be told what to do or 
that somehow their costs may be impacted.
  I really do not see it as a cost issue. I do not think it is going to 
cost anything more, or certainly a very insignificant amount extra 
money if anything, to implement these basic patient protections and we 
have to keep making that point.
  Mr. GANSKE. Mr. Speaker, reclaiming my time for a moment, I think we 
should make a distinction between the insurance industry and HMOs and 
the managed care industry.
  There are a lot of health insurance companies that provide health 
insurance policies to individuals. They do not have the liability 
exemption that a managed care plan, an HMO, has when it is offered 
through an employer. Consequently, we see significantly fewer of these 
horror stories from that portion of the insurance industry.
  We see fewer reports of problems in the nonprofit managed care 
industry because they are ethically trying to do their job. When they 
look at a Patient Bill of Rights, as has been proposed by our 
legislation, they are already doing most of the things that we are 
proposing.
  What we are really talking about is a subset of the managed care 
industry that adamantly opposes quality standards. Why? Because they 
are cutting corners. That way they can increase their profit margin. 
Their stock will go up. Their CEOs will make millions more. They can 
capture more of the market share, because they are keeping their 
premiums lower than those plans that are actually trying to do a 
legitimate job.
  Mr. PALLONE. Mr. Speaker, if the gentleman will yield, we had a 
report that the gentleman mentioned the other night on the floor about 
the CEOs of some of these for-profit HMOs or managed care 
organizations, their salaries are many millions of dollars per year 
with all kinds of stock options that add up to additional millions of 
dollars.
  I am glad the gentleman brought out the distinction between the 
different types of HMOs and managed care, because in fact many of the 
not-for-profit HMOs or managed care organizations in the beginning, 
when the President first proposed patient protections, were actually 
supportive of the patient protections, most of which are incorporated 
in the two bipartisan bills that the gentleman mentioned.
  It is true that there are good and bad insurance companies and 
generally the not-for-profit HMOs and managed care organizations have 
not really had a problem with the kind of patient protections that we 
are talking about.
  Mr. GANSKE. We are actually seeing some of the nonprofit HMOs such as 
Kaiser, HIP, calling for Federal legislation for patient protections. 
They would like to see a national uniform standard so that their 
competitors who cut corners and needlessly put at risk people's life 
and limbs are not able to unfairly compete against them when they are 
trying to do a legitimate job.
  Let me give another example. I am not calling some of these cases 
anecdotes, because some of the opponents to these two bills say, well, 
we should not legislate by anecdote. I am a physician. I continue to be 
a physician. I continue to do charity care while I am in Congress. So I 
am going to refer henceforth in this talk tonight to ``patients,'' 
because that is what I think they are.
  Let us talk about Francesca Tenconi, an 11-year-old girl. She suffers 
from a disease called Pemphigus Foliaceous. This is an autoimmune 
disease in which her body's immune system becomes overactive and 
attacks the protein in her skin.
  Her parents have had to battle with their HMO to insist upon 
appropriate diagnosis and medical care. According to her father, 
Francesca's medical and insurance ordeal began in December 1995 when at 
the age of 11 she was diagnosed with a skin rash. By March, that 
condition had spread and become worse, and by April it was so bad she 
could not attend school. During this period, her parents made several 
requests to get a referral to a specialist to find out what was going 
on and her HMO refused.
  Finally, in May, almost 6 months after the first appearance of her 
skin problems, the HMO finally did some biopsies and sent them to out-
of-network doctors and they finally got an accurate diagnosis. But even 
after receiving the diagnosis, her HMO still insisted on treating the 
disease with its own doctors, even though this is a very complicated, 
difficult disease.
  It was not until February of 1997, over 1 year after her symptoms 
appeared, that they finally allowed her to receive care at Stanford 
Medical Center, which possessed the doctors capable of treating this 
illness.
  Explaining the prolonged and unnecessary pain of lying down without 
skin on his daughter's back for over a year, Don Tenconi 6 said, ``If 
you feel this pain, you will shed tears of pain. The same pain that 
Francesca shed night after night, week after week for months.''
  And because Francesca received her health care through Donald's 
employer, the HMO claims that ERISA shields it from damages resulting 
from delaying and denying medically appropriate care and referrals. 
And that is wrong.

  That is a real live little girl who for a year had basically no skin 
on her back. Think of how painful that condition would be. Think about 
being that little girl's mother and father. Think about their continued 
appeals to try to get appropriate care from their managed care company.
  Today in our committee, the Committee on Commerce, we had a long 
hearing on liver transplants. Let me give another example of an HMO 
abuse. A woman suffering, her name is Judith Packevicz, suffering from 
a rare form of cancer of the liver, is today being denied life-saving 
treatment by her HMO. The HMO will not pay for a liver transplant 
recommended by her oncologist, with the support of all of her treating 
physicians.
  This is causing this woman to live out a death sentence. The HMO 
denied the recommended transplant on the grounds that it allegedly 
``does not meet the medical standard of care for this diagnosis.''
  No explanation of why the recommended transplant allegedly fails to 
meet community standards, when all of her doctors have recommended this 
treatment, has been provided in correspondence from the HMO.
  Well, under ERISA, should Mrs. Packevicz die before she receives a 
transplant, her HMO will have no costs at all. Is that what we want to 
see continue in this country?
  Mr. PALLONE. Mr. Speaker, that is horrible. Can I ask the gentleman 
if he

[[Page H4829]]

knows, what would be the cost of a liver transplant, approximately? 
What is the cost? Do you have any idea?
  Mr. GANSKE. The cost of a liver transplant, in total, would probably 
be in the range of several hundred thousand dollars. This is not 
something that the Packevicz can afford.
  Mr. PALLONE. But this is obviously the reason why they are excluding 
it, because they do not want to incur that cost. There is no question, 
I would say.
  Mr. GANSKE. Mr. Speaker, what we have with the managed care industry 
is we have a situation where they make more profit by giving less 
service, less treatment. By my mind, this is the only industry in this 
United States or anywhere where they get paid more for doing less. It 
is a perverse incentive system and one that needs guidelines so that it 
is not abused.
  Another example, how about Carol Anderson, a hospital worker who has 
had to change insurance providers in the middle of her breast cancer 
treatment. When she called an HMO to ask if her doctors were on his 
network of physicians, she was told they were not but because her 
breast reconstruction was already underway, she could stay with them.
  However, the next month, that HMO refused to cover her surgery 
claiming she had been misinformed by somebody and so after months of 
fighting, they finally agreed to pay, but only if she switched 
physicians. That is tough in the middle of treatment, especially 
reconstructive treatment. I am a reconstructive surgeon. I know how 
difficult some of those operations can be.
  The bills that are sitting here waiting to be acted upon by Congress 
address that. They say that if a patient is in the middle of treatment 
and the employer switches the insurance coverage to a different HMO, 
the patient does not have to switch doctors until that treatment is 
finished.
  Same thing goes with pregnancy. A woman is 7-months pregnant, her 
employer switches plans, her current doctor is not in the treatment 
plan. Well, too bad. She has to go to a new physician, a new doctor. 
Our bills address that and say, huh-uh, if employees are offerer an 
employer plan in that situation with a pregnant woman nearly ready to 
give birth, they cannot force her to go to another physician. And why? 
Because there is a certain benefit to continuity of care.
  Mr. PALLONE. Mr. Speaker, if the gentleman would again yield, just 
common sense. We are not really asking for anything more. And obviously 
it makes sense to not switch physicians in the middle of a pregnancy or 
in the middle of some kind of disorder.
  If I could just mention too, I think that many constituents that I 
talk to, not only in my district but in other parts of the country, 
really would like to see some kind of option where patients can go 
outside the network for a doctor or hospital or other provider, even if 
it means that the patient has to pay more.
  I know that the Patient Bill of Rights, which is one of the bills 
that the gentleman mentioned, specifically says that when consumers 
sign up for health insurance with the employer, that the employer has 
to offer the option of going outside the network for a doctor, even if 
it means that the patient has to pay a little more. Not everybody wants 
to do that, but for those people who are willing to pay a little more 
it certainly makes sense.
  I find that a lot of people do not realize when they sign up for a 
particular HMO that they are limited by the number of doctors, or 
realize what doctors are in the plan or not. That is why disclosure, 
which is another one of the issues that is addressed in these two 
bills, is so important.
  We need to have disclosed what the patient is getting into when they 
sign up. Too many people now just do not know what the HMO covers and 
what it does not, and what doctors are in it and what hospitals are in 
it and what not.

                              {time}  2300

  That is another basic right and another basic protection that those 
bills address which I think needs to be addressed.
  Mr. GANSKE. Mr. Chairman, in light of all of these cases, and I can 
come to the floor every single night and talk about patients like 
these, and the gentleman could, too. In light of that, what does the 
American public think about all of this? Let me give a few of the 
findings from a nationwide health care poll done by a Republican 
pollster, the Republican pollster, by the way, who did most of the 
polling for the Contract With America.
  Let us just look at what some of the findings were in this recently 
conducted poll of over 1,000 adults nationwide. This was done May 1, 
1998.
  Question: Would you say the overall quality of health care over the 
last 10 years has improved, stayed the same, or deteriorated? Improved, 
34 percent; stayed the same, 15 percent; deteriorated, 46 percent.
  Fifty-five percent of Americans living in the West think the overall 
quality of care has deteriorated in the last 10 years.
  Question: Health care providers should be required to give their 
patients full information about their treatment, their condition, and 
treatment options. Do you support? Support, 7 percent; opposed, 1.6 
percent.
  There is a provision in one of these bills, allow free 
communications, allow unrestricted communications between doctors and 
their patients. We would think that would be a given right.
  Mr. PALLONE. Mr. Chairman, I think the gentleman should elaborate on 
that a little bit more. Most people are shocked by this gag rule. Just 
explain that a little more. People are shocked when they hear what 
kinds of restrictions are in place.
  Mr. GANSKE. Mr. Chairman, as the gentleman from New Jersey knows, I 
have had a bill before Congress with over 300 bipartisan cosponsors 
that my Republican leadership will not allow to the floor. It would ban 
gag clauses which prevent doctors from being able to tell their 
patients all of their treatment options. We are not saying the HMO has 
to cover all of those treatment options; we are simply saying that the 
HMO cannot restrict a physician from telling a patient all of their 
treatment options. That is what those gag clauses are. I cannot even 
get that to the floor.
  Mr. PALLONE. I would wonder whether or not that is even 
constitutional if someone ever wanted to take it up to the Supreme 
Court. It seems to violate the First Amendment not to be able to speak 
out in your profession.
  Mr. GANSKE. Mr. Chairman, let us go on with some of these survey 
findings.
  Proposal: Any basic managed care plan would be required to allow 
patients to see plan specialists when necessary. Do you support? 94 
percent. Opposed, 2.1 percent.
  We are talking about the ability when you have a complicated medical 
decision to get a referral to a specialist. That is one of the 
provisions in these two bills: the Patient Bill of Rights and the 
Patient Access to Responsible Care Act. Ninety-five percent of the 
American public agrees with that.
  Proposal: Patient should have the right to a speedy appeal when a 
plan denies coverage for a benefit or service. Do you support? 94.7 
percent. Opposed, 3.3 percent.
  Proposal: A complete list of benefits and costs offered by the health 
plan before he or she signs up for the plan. Do you support? 91.3 
percent. Opposed, 4.6 percent.
  This is another one of the provisions that is in both of these bills, 
full disclosure. For heaven's sake, we are talking about an 
organization that makes life and death decisions.
  Proposal: All health plans must allow their patient the option of 
seeking treatment outside of their HMO with the HMO covering at least a 
portion of the cost. Do you support? 87 percent. Opposed, 8.8 percent.
  It goes across all groups. Here is another one. Insurance companies 
would be prohibited from paying doctors more money for offering less 
treatment or refusing referrals. Do you support? By a margin of two to 
one across all age groups, Republicans, Democrats, rich, poor.
  Question: Let us say the proposals I just read were packaged in a 
single piece of legislation. Would you be more likely or less likely to 
vote for your Member of Congress if he or she voted for this 
legislation? More likely, 86 percent; less likely, 4 percent.
  Here is a very interesting question from this Republican pollster. 
This, I think, gets to what we want to talk about next, and that is 
cost. If you knew that enacting all six proposals as

[[Page H4830]]

a single piece of legislation would cost about $17 more per month, 
would you support this legislation? Support, 67 percent; oppose, 23 
percent.
  Do you know what? That is way higher than most of the estimates done 
by reputable accounting firms would say would be the cost. A survey by 
Coopers & Lybrand done by the Kaiser Family asked the question or 
looked at it actuarially. What would be the cost of a Patient Bill of 
Rights?
  Mr. PALLONE. Most of what I have seen are within $5 and $10. That is 
most of what I have seen.
  Mr. GANSKE. Coopers & Lybrand said that a cost of the legislation, 
Patient Bill of Rights, exclusive of the liability provision, and we 
will get to that in a minute, would cost a family of four for a year 
$31.
  Mr. PALLONE. Which is a lot less.
  Mr. GANSKE. Significantly less than the question, which had a two-
thirds majority positive answer.
  We often hear from the opponents to this, well, small business is 
really against this. All of those small businesses would stop covering 
their employees. It would mean that more and more people would not have 
insurance.
  Okay. This is very interesting, because today, actually yesterday, 
Kaiser Family, Kaiser-Harvard Program at the Public and Health Social 
Policy Institute, the Kaiser Family Foundation released a survey done 
of 800 small business people across the country. So these are the 
employers, these are the small business employers.
  What did they find? They found that small business executives are 
pretty much just like everyone else in the public. They think that 
there is a need for Federal legislation on this.
  Let me provide some specifics. Questions to the small business 
executives, the ones who are providing the insurance to the majority of 
people in this country: Would you favor a law requiring health plans to 
provide more information about how they operate? 89 percent favored; 5 
percent opposed.
  Would you favor a law requiring health plans to require ability to 
appeal health plans decisions? 88 percent favored; 8 percent opposed.
  They continue to ask these small business executives: Would you favor 
a law requiring plans to allow direct access to gynecologists? 84 
percent favored.

  Would you favor a law requiring health plans to allow direct access 
to specialists? 75 percent favored.
  Would you favor a law requiring health plans to remove limits on 
coverage for emergency room visits, so that if you have a case of 
crushing chest pain, you can go to the emergency room and not be 
worried that if the EKG is normal, you are going to be stuck with a big 
bill? 77 percent favored.
  Mr. PALLONE. But, again, if the gentleman will yield, it makes sense 
that we get these kinds of responses because it is just common sense. 
Why would people think anything different? That is, I think, what we 
have been saying from the beginning, that these are just common-sense 
principles, and people are going to overwhelmingly support them.
  But I just wanted to mention two other things that the gentleman 
brought up, and I would like to stress again; and those are, the reason 
why people are demanding these changes and want these bills to come to 
the floor is because the quality of health care is suffering.
  We have prided ourselves in this country for so many years on having 
the best quality health care in the world, and I would venture to say 
that we still do, but that will not be the case for very long unless we 
start to put these kinds of common-sense protections in place, because 
quality is really suffering, and people realize that more and more. I 
think that people are used to having quality health care in this 
country, and they are not going to be satisfied with something less 
than that.
  The other thing that the gentleman mentioned is that the opponents 
not only talk about cost, but suggest that because of the exorbitant 
costs that they bring up falsely, that the consequence of our 
legislation would be that fewer people would have health insurance. In 
fact, there is no truth to that whatsoever.
  In fact, the reality is that fewer and fewer Americans have health 
insurance every day even with the HMOs in place. The phenomenon of more 
and more Americans not having health insurance is not a consequence of 
HMOs or any particular type of health insurance. It has to do with the 
fact that more and more employers simply do not provide health 
insurance. That is the biggest factor. So, really that is a ruse, 
talking about the costs. Talking about the fact that fewer Americans 
have health care has nothing to do with this debate, nothing to do with 
it whatsoever.
  Mr. GANSKE. Mr. Chairman, reclaiming my time, this Kaiser Family 
Foundation survey gets right to that point. They asked these employers: 
How many of you will drop your coverage for your employee? The answer 
was between 1 and 3 percent; 1 and 3 percent, significantly different 
from the inflated claims that you will hear from the business groups.
  But I want to point out a couple of additional things in this survey, 
and this is very interesting. Small business executives were asked 
this: Would you be in favor of requiring health plans by law to allow 
patients to sue health plans? This is going to surprise some of my 
colleagues on the Republican side. Favor, 61 percent; oppose, 30 
percent.
  If you then ask the question: Would you still be in favor of it if it 
resulted in higher premiums? More than half still favor it. Why? It is 
just like this talk I gave to this group of businesswomen, small 
businesswomen back in my district about a month ago.
  We were talking about this issue. Do you know why? Because they are 
also consumers. They know that if their son or daughter has a skin 
problem like we have talked about with this poor little girl who is 11, 
and they have problems, they need to have recourse and remedy for it.
  Then they went back, and they asked all those other questions that I 
have talked about by saying: Would you still favor that law if it might 
result in higher premiums? And 60 percent or more still favored every 
one of those.
  Then they found this: 57 percent of small business executives think 
that managed care has made it harder for people who are sick to see 
medical specialists; 58 percent say it has decreased the quality of 
care people receive when they are sick; 65 percent of these small 
business executives say it has reduced the amount of time doctors spend 
with our patients; and interestingly, 43 percent say it really has not 
made much of a difference of what my health care costs have been to 
have all of my employees in an HMO.
  I think that when we look at really some of our grass-roots, small 
business people, the people who are purchasing that insurance for their 
10, 15, 20 employees, they are just like everyone else in the public. 
They know that there are abuses in those health plans, and they want to 
make sure, darn sure that their employees are not harmed, and also that 
they and their families who are covered by their plans are not harmed.
  Mr. PALLONE. The employers are usually covered by the same plan.
  Mr. GANSKE. Exactly.
  Mr. PALLONE. It only makes sense.
  Mr. GANSKE. Let us talk for a minute about the cost of liability. We 
have heard a lot of inflated estimates of this. Texas, as you know, 
passed a liability provision taking away the exemption for HMOs in 
Texas.

                              {time}  2315

  So one of the HMOs asked its actuarial firm how much extra should 
they raise the cost of a premium, and they asked the actuarial firm 
that is in the pockets of the HMOs, the one that does all the HMOs' 
bidding, Milliman & Robertson, well outlined by an expose, I would say, 
in the Wall Street Journal just recently. Even so, when Milliman & 
Robertson had to put the number on the line for the company that was 
actually going to do this, the liability provision would have raised 
the cost of the premium, I think, 0.3 percent. No, I am sorry, 34 cents 
per month, 34 cents per month.
  Mr. PALLONE. Could I ask the gentleman this? The bottom line is that 
if we have this liability provision, and the HMOs know that they could 
be liable, I would think the consequence would be that they would be a 
lot more careful about what they deny and what they do. And so, 
therefore, the situations where they would be liable for malpractice or 
making the wrong decisions would decrease and their costs probably 
would not be that great.

[[Page H4831]]

  So a lot of this is just preventive. A lot of the things that we are 
suggesting here just make for a better system in general and create 
prevention on the part of the HMO. And so I think that that is the 
reason why ultimately the cost is not really going to go up.
  Mr. GANSKE. Well, let us look at a little more detail at this. This 
is going to be a matter of contentious debate, if and when we can ever 
get the Republican leadership to allow this to come to the floor, and 
that is, what will be the cost of the liability on this?
  Well, here is what we have. We have a study that was done by 
Multinational Business Services, MBS. They estimated the liability cost 
impact of insurance premiums would be 0.75 percent. Less than 1 
percent. What did Muse & Associates find would be the cost of liability 
for HMOs? 0.14 percent to 0.2 percent, two-tenths of a percent. How 
about the Barents Group? What did they estimate? 0.9 percent, less than 
1 percent, up to about 1.5 percent.
  But, really, as was pointed out, the insurance premium increases are 
most likely to occur for the HMOs that are most likely to be denying 
the care that is medically necessary, not the HMOs that are trying to 
do the ethical job that they should be and providing the care when it 
is medically appropriate. So there would be a range.
  For many plans that are trying to do the ethical thing, the costs 
would be minimal.
  Mr. PALLONE. And we would be bringing the unethical ones up to the 
same standards as the ethical ones in the long run. That is what the 
effect would be.
  Mr. GANSKE. I remember in our Committee on Commerce we had testimony 
by a medical reviewer. Her name was Linda Peno. She testified before 
our committee, and she admitted that she killed a man. She was not in 
prison, she was not on parole, she had never been even investigated by 
the police. In fact, for causing the death of a man, she received 
congratulations from her colleagues and moved up the corporate ladder.
  She was working as a medical reviewer at an HMO. She confessed how 
HMOs can use the term ``medically necessary'' as the ``smart, smart 
bomb'' of denials. There is a lot we need to do in terms of due process 
and making sure that HMOs do not abuse some of the terms that they use 
all the time to deny care; that is, in both of these bills, Patient 
Access Responsible Care Act and Patient Bill of Rights.
  And there are standard due process provisions in those bills so that 
if care is denied, a patient can get a timely appeal process. Gee, that 
does not sound so outlandish. That is something that every other 
insurance company that is not shielded by ERISA has found it has had to 
do for 40 or 50 years, or else they would suffer the consequences.

                              {time}  2320

  When we talk about this legislation, I liken this to the automobile 
industry. When my colleagues or I buy a car, we are assured that we are 
going to have a car with headlights that work, turn signals, brakes, 
safety seat belt, some minimum federal safety standards. And yet, I do 
not see that we have any nationalized auto industry. And judging from 
the ads that I see in magazines or on TV, there sure is an awful lot of 
competition out there in the auto industry.
  But we have some Federal standards, do we not?
  Mr. PALLONE. Absolutely.
  Mr. GANSKE. What is wrong with having some minimum safety standards 
for plans that Congress 25 years ago give a total exemption to?
  Mr. PALLONE. There is no question that this is nothing more than 
common sense. We have said it over and over again and we are simply 
asking for a floor for patient protections.
  I think, as the gentleman has well pointed out this evening, that 
basically it just brings the standards, if you will, of some of the 
worse for-profit HMOs up to the level of some of the better not-for-
profit HMOs.
  I just want to say once again that, really, the key here is not to 
persuade I think the average congressman or congresswoman. Because, as 
my colleague has said, we have a majority of the Members of this House 
on one or both of these bills. What we have to do is persuade the 
leadership that this is something that needs to be brought up.
  I think tonight, with the polling that you brought out, makes a very 
convincing case and, hopefully, will also convince the leadership that 
from a political point of view this makes sense. Because the gentleman 
has very specifically pointed out how this is something that the public 
is going to be watching in terms of how they vote in November.
  So, hopefully, we are lighting up a fire here tonight when we 
continue to bring up this issue. And although there are not a lot of 
days left in this session, there is certainly enough to get this 
passed.
  I want to commend the gentleman again for being outspoken on this 
issue. Of course, as a physician, he is in the best position really to 
talk about these cases and analyze some of them. And I commend him, as 
a physician and as a Member of this body, for speaking out even though 
it is often at odds with his own leadership.
  Again, I do not want to make this a partisan issue because I believe 
that most Members of this body, whether Republican or Democrat, support 
this legislation. So I think we just have to keep at it and keep 
telling these stories and keep pointing out to our colleagues how 
important it is that this be brought of up before we end the session 
this fall.
  Mr. GANSKE. Reclaiming my time, I would just think that our 
constituents ought to consider real people who are affected by some of 
the horror stories that we are hearing from mismanaged care.
  Let me give my colleague another example. We recently had a 28-year-
old woman who was hiking in the Shenandoah Mountains not too far from 
here. She fell off a 40-foot cliff accidentally. Luckily, she was not 
killed. She had a fractured skull, was comatose, broken arm, broken 
pelvis, was lying at the bottom of this 40-foot cliff, nearly drowned 
in a nearby pool.
  Fortunately, she had a hiking companion, was able to get a life 
flight, was taken to a hospital, spent a long time in the hospital, 
ICU, morphine drips, all sorts of things. Her HMO refused to pay for 
her hospitalization.
  This is that woman, Jackie Lee, shortly before she was put onto the 
helicopter. The HMO refused to pay for her care because she had not 
phoned for a preauthorization, as they would say.
  I ask my colleagues, Jackie Lee was lying there at the base of that 
have 40-foot cliff, comatose, with a broken arm and pelvis, and a 
fractured skull. Was she supposed to wake up with her non-injured arm, 
pull her cellular phone out of her pocket, dial a number probably 
thousands of miles away to get an okay to go to the hospital?
  And then after she was at the hospital, the HMO said, well, you did 
not notify us in time so we are not going to pay you on that reason 
also. Well, my goodness gracious, she was comatose in the ICU for a 
week. She was on intravenous morphine.
  That is the type of real-life problem that all of those small 
business employers who answered this survey are aware of. They are 
aware of it either from their own families or friends or they are aware 
of it from their employees. That is why they are calling on Congress, 
just like everyone else, to do something.
  I will just have to finish on this.
  Mr. PALLONE. Before my colleague finishes, though, again, I assume 
that the cost of this care that she received was very expensive and 
that is another reason why they are denying it.
  Mr. GANSKE. Reclaiming my time, I can guarantee my colleague that 
this young woman did not have the $12,000 to $15,000 that her HMO 
refused to pay. And neither would most people in this country.
  So, I think that I would encourage all of our constituents from 
around the country to rise up in arms on this, to say, look, Congress 
may have killed tobacco legislation that would help prevent youngsters 
from smoking, maybe they are going to obfuscate on campaign finance 
reform. But I will tell my colleagues, there is one thing that Congress 
had darn well better do before it leaves because my daughter or my 
son's health may depend on it or my mother's or fathers's or my 
employees', and that is Congress needs to fix the mess that it has made 
in the past related to health plans and managed care.
  If Congress does not handle this problem, we are going to hold you 
personally, congressman or congresswoman,

[[Page H4832]]

responsible for doing this and we will hold the leadership responsible.
  I will tell my colleagues, I am hearing from all over the country on 
this. The water is building up behind this dam on this issue. And I 
will just have to say that sometimes it takes remarkable actions to get 
the leadership of this House and the Senate to do what they ought to do 
for the betterment of our constituents. We very well may be looking at 
that in the very near future.

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