Multinational Monitor

JAN/FEB 1998
VOL 19 No. 1

FEATURES:

The End of a 'Miracle:' Speculation, Foreign Capital Dependence and the Collapse of the East Asian Economies
by Walden Bello

Autumn of the Patriarch: The Suharto Grip on Indonesia's Wealth
by George Aditjondro

Reining in the IMF: The Case for Denying the IMF New Funding and Power
by Marijke Torfs

Corporate Junk Science: Corporate Influence at International Science Organizations
by Barry Castleman and Richard Leman

The Clinton-Industry Cluster: Business and EPA Assure a Future of Dirty Paper Making
by Todd Paglia

INTERVIEW:

International Monetary Fund 101
an interview with
Friends if the Earth

DEPARTMENTS:

Behind the Lines

Editorial
Lessons from the Asian Meltdown

The Front
Philly Waste Go Home - Historic Mexican Labor Win

The Lawrence Summers Memorial Award

Money & Politics

Their Masters' Voices

Names In the News

Book Notes

Resources

Money and Politics

With this issue, Money & Politics, by Jennifer Schecter, a researcher at the Washington, D.C.-based Center for Responsive Politics, begins appearing as a regular column inthe Multinational Monitor.


The Return of Harry and Louise

Remember "Harry and Louise"? Several years ago these TV characters tried to convince consumers that President Clinton's universal health care proposals would hurt patients and drive up the cost of care.

Now the makers of the Harry and Louise commercials are back with a vengeance. Health industry groups and large employers have banded together to form the Health Benefits Coalition and plan on spending at least $1 million on an ad campaign convincing consumers -- and lawmakers -- that imposing federal rules on health insurance companies and health maintenance organizations (HMOs) is a bad idea.

At stake are proposals by Clinton and members of Congress that would allow patients to sue their health plans for malpractice, increase patient access to emergency services, end restrictions on what doctors can tell their patients about treatment options, expedite patient visits to specialists, facilitate patient appeals of health plans' denial of treatment and protect the privacy of medical records.

In its new ads, the Health Benefits Coalition claims that such legislation would force premiums up by an average of a whopping 23 percent. And higher health care costs are not just a pocketbook issue, the Coalition reminds the public; its ads say that every 1 percent increase in costs causes 200,000 to 400,000 people to lose their health insurance.

The most contentious issue is whether patients should be allowed to sue their health plans when care is delayed or denied.

Susan Cox-Wagoner, executive director of the Colorado HMO Association told the Rocky Mountain News that such a provision would "remove money from the pool available to provide additional services for consumers and it could jeopardize the financial stability of a carrier by depleting its financial reserves."

But consumer groups argue that giving patients the right to sue would discourage health plans from pressuring doctors to contain costs by withholding treatments.

While the debate on managed care reform is just beginning on Capitol Hill, it already has played out in several state houses across the country.

In Spring 1996, Governor Lawton Chiles of Florida vetoed a narrow bill that would have allowed patients to sue their HMO in cases where care was denied after a doctor with the health plan had deemed the treatment necessary. The fight pitted trial lawyers and consumer groups against Florida's health industry and big business groups like the Associated Industries of Florida. The bill seemed destined for easy passage after sailing unanimously through both state houses, but the fight turned ugly after HMOs and business alliances started lobbying Chiles to nix the malpractice legislation, reportedly in violation of a deal brokered in the last days of Florida's legislative session.

In May 1997, Texas became the first (and only, so far) state to pass a bill allowing patients to sue their health plans. Soon after, Aetna and its state managed care subsidiaries filed a suit to block the new HMO law. Their grounds? They argued the new state law is pre-empted by a federal law governing employer-sponsored health plans, known as the Employment Retirement Income Security Act (ERISA). If other states try to enact similar legislation, they too may be forced to defend their consumer protection laws in court -- unless Congress amends ERISA to eliminate the preemption argument.

Health industry groups and employers are doing everything they can in order to make sure this does not happen.

Health insurance companies and health maintenance organizations have distributed more than $685,000 in political contributions to federal candidates and parties so far in the 1997-98 election cycle, 68 percent to Republicans.

The National Federation of Independent Business (NFIB) and the National Restaurant Association, two of the major players in the Health Benefits Coalition, have given nearly $345,000. These two groups ranked among the top 50 contributors to U.S. federal candidates in the 1995-1996 election cycle -- and they are used to getting their way on Capitol Hill.

Other heavy hitters in the debate include the insurance companies Prudential, Cigna and Aetna, which together have contributed more than $489,000 to federal candidates and parties so far in the 1997-98 election cycle.

Representatives from the health industry also carry a lot of weight in Washington.

The head of the Health Insurance Association of America (HIAA) and creator of "Harry and Louise," William Gradison, served as a congressperson from Ohio for nearly 20 years. Gradison's group and the American Association of Health Plans (AAHP) have beefed up their lobbying expenditures, spending $2.5 million and $760,000 respectively in the first six months of 1997. The HIAA and the AAHP have each hired two new lobbying firms this year.

Although Congress has a full legislative agenda this year, President Clinton made passing a "consumer bill of rights" a priority in his State of the Union Address. Whether the makers of Harry and Louise can derail his efforts again remains to be seen.

-- Jennifer Schecter

 

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