Erosions and Opportunities Under Managed Care - Wiley Online Library

Quality of Life: Erosions and Opportunities Under Managed Care

EHaavi Morreim

prove life or to prevent qualitative deterioration rather than to prolong life. This article discusses the ways in which recent economic developments challenge medicine’s traditional interest in quality of life, suggests why this tension has developed, and proposes some ways to address the emerging issues.

n recent years a number of commentators have discussed the importance of measuring quality of life (QL) in health care.’ We want to know whether an intervention will help people to live better, not just longer, and whether some treatments cause more trouble than they are worth.2 New technologies promise wondrous benefits. But when millions of people have no insured access to health care, and when many others face increasingly stringent limits on care, technologies’ high costs require us to choose what we should do from the broader universe of what we can do. The challenges to measuring QL are f~rmidable.~ Researchers debate whether to measure general QL or disease-specific QL; whether to focus on functional status such as the patient’s ability to walk and dress himself, or on the value people ascribe to that functional status; whether to seek the values of the general public, or to concentrate on people actually affected by a given disease or disability. Moreover, the intensely subjective feelings associated with QL judgments are not easily quantifiable or interpersonally comparable, hence not too amenable to rigorous science on which life-quality is “better.” Even high-quality QL research prompts debate when used to reduce spending on marginal benefits. Studies declaring one quality of life to be “lower” than another, and thereby some health care to be less “worthwhile,” can invite discrimination against people with di~abilities.~ These important issues have been the mainstay of QL discussions. But another challenge, equally significant yet far less recognized, is the focus of this article. As we argue about how to measure QL, the actual quality of life being delivered through many health plans appears to be eroding, as health plans become increasingly reluctant to cover some of the interventions whose main objective is to imJournal of Law,Medkiine &Ethics, 28 (2000):144-158. 0 2000 by the American Society of Law, Medicine & Ethics.

I

Erosion

As health plans urgently seek to cut costs, contentious debates swirl around life-and-death issues: whether tissueplasminogen activator should be used over streptokinase, at vastly greater cost, to save perhaps only a few lives;s at what age mammography should be routine;6 whether increased use of advance directives will save money or imperil vulnerable persons.’ But beyond these dramatic discussions are cost-cuts that, though more mundane, are often more important to ordinary patients because so much of routine medicine concerns quality of life. These, rather than life-death issues, will concern us here. For this discussion, “quality of life” refers to comfort and function, both mental and physical. The QL effect of a medical intervention can range from transient to long-term, from minor discomforts to a major impact on someone’s ability to participate in human activities and achieve the goals he cherishes. Coverage for QL-oriented care seems to be eroding on a number of fronts, as discussed below. In some cases, formal studies have documented that patients in managed care organizations-here, defined to include both capitated plans and managed fee-for-service plans6-receive less of certain kinds of care. In other contexts, case reports and anecdotes predominate. Thus the evidence is sometimes more suggestivethan solid. Moreover, it should be acknowledged up front that less care is not invariably worse care. In the ~ medical pracdays of the “Artesian Well of M ~ n e y , ”lavish

144

Tbelournal of Law, Medicine 6Ethics tices undoubtedly led to excessive and sometimes harmful care.’O Wide variations in physicians’ practices, often not justified by clinical differences among patients,” quickly became a major target for cost containment. However, as the more obvious cutbacks have been achieved, health plans’ continuing need to contain the high cost of care has begun to focus on less obviously wasteful practices. And it is here that QL-oriented care may now be adversely affected. A number of scientific studies have shown that patients in managed care plans are less likely to receive certain sorts of services. In one study, for instance, patients with stroke were more likely to be discharged to nursing homes than to rehab facilities,12 with potentially less opportunity for improved fun~ti0n.I~Other kinds of physical rehabilitation once deemed standard are likewise more closely scrutinized than they once were.I4 In Bedrick v TravelersInsux Co., the insurer for a boy with cerebral palsy refused to continue most of the coverage for his physical therapy, occupational therapy, and speech therapy because these would not improve the boy’s condition. Testimony that the servicescould preserve current function and prevent deterioration was to no avail until a federal circuit court insisted ~therwise.’~ Other studies suggest further diminutions in QL coverage. Several studies conclude that diabetic patients do not always receive preventive care to reduce the long-term complications of diabetes, such as limb amputations, vision loss, and renal failure, that hamper QL long before they take the patient’s life.16 For perioperative management of colon cancer, Medicare patients in managed care organizations (MCOs) may be less likely to receive sedatives, anxiolytics, and patient-controlled analgesia after surgery, than patients in traditional indemnity plans.” In the same vein, some patients in managed plans have found it more difficult to consult with certain subspecialties such as dermatology, even though evidence suggests that primary care physicians are often less able to diagnose and treat skin maladies promptly and efficiently.ls Likewise, patients in some prepaid health plans are less likely to have cataract extraction than patients in indemnity plans.19 In another example, low-osmolar contrast agents for radiographicstudies save lives of high-risk patients and enhance comfort for everyone-but at considerably more cost than older agents. Accordingly,someMCOs limit costlierdyes to high-risk patients.” Other instances are essentially anecdotal, but they still raise concern. Some MCOs no longer routinely offer epidural anesthesia for normal vaginal childbirth.21 The problem was deemed sufficiently severe in California to precipitate a legislative mandate that such pain relief be covered for its Medi-Cal patients.22 In another example, health plans’ perceived unwillingness to cover breast reconstruction after mastectomy prompted several legislative mandates requiring coverage.u In general, plastic and reconstructive surgeries can be difficult to obtain in some health plans, including corrections for significant congenital de-

fects.” On both the national and state levels, shorter hospital stays, for instance after childbirth or mastectomy, have likewise prompted legislation.” It should be quickly acknowledged, of course, that the bare fact a legislature enacts a mandate does not entail that patients really were being denied care on a broad scale or, if they were, that the chosen legislative remedy is the most appropriate answer. Short hospital stays for childbirth may or may not worsen neonatal mortality or and reinstating longer hospitalization may or may not be the best response, even if a problem exists. Nevertheless, patients discharged quickly may feel abandoned at a moment of intense vulnerability, and the associated QL impact can be bitter, even when only temporary. Formulary decisions likewise may sometimes put costs ahead of QL.27 The federal Medicare program, for instance, determined that it would pay only the cost of Zoladex for men with prostate cancer. Although this drug is medically as effective as the newer, costlier drug, Lupron, it must be administered as a pellet inserted with a large-bore needle that can cause significant pain, bruising, and scarring. Lupron requires only an ordinary injection with a standardsize needle. The policy was challenged in court by the manufacturer of Lupron, but the Fourth Circuit determined that the plaintiff lacked standingz8 Similarly, health plans may not always cover costly new drugs whose main virtue is greater convenience or reduced side-effects. At the same time, some MCOs are becoming more aggressive in ensuring that patients take their prescribed medications. Although greater adherence will usually enhance both health and QL, an unduly narrow formulary can force patients into regimens that bring side-effects they find unacceptable. Mental health care likewise appears to receive short shrift in some MCOs. As one commentator observed, treatment of mental disorders is no longer intended to cure underlying pathology, but only to manage acute symptoms with short-term interventions addressing pre-determined, specific goals, such as to stabilize the patient for discharge or to resolve the immediately presenting problem or symptoms. Treatment becomes a series of episodes rather than continuous care.29 O n a broader level, shrinking attention to QL is also seen in the outcomes studies that spawn clinical protocols to guide and sometimes restrict care. Many of these studies seek broad statistics on morbidity and mortality, with considerably less interest in tracking comfort and con~enience.~~ When such studies are then used, for instance, to create step-care protocols for routine ailments, they can leave some patients symptomatic considerably longer than they might have been with more aggressive management, even if they do eventually resolve the patient’s problem. Health plans’ changing organizational structures also can affect QL, if they make the experience of obtaining health care more inconvenient or unpleasant. Frequent

14s

Volume 28:2, Summer 2000

vices and occupational therapy can help keep elderly patients active and reduce hospitalization^.^^ By the same token, a recent study of workers at several major US companies found that people with depression had 70% higher health care costs, while people with high levels of stress had 46% higher costs, and people with excessively high or low body weight generated 21% higher costs?’ Thus, although depressionis sometimesa life-threateningillness, greater attention to depressive symptoms in the population at large could improve mental, physical, and social functioning, and potentially reduce the costs of somatic health pr0blems.3~ These are win-win situations in which care that enhances QL also has broader benefits. But thorny issues remain. Where costly QL-oriented care yields only personal wellbeing without any further payoff, QL care may suffer. In purchasing health plans, for instance, many firms seek low prices before high quality.4O Where that is the case, then when MCOs vie for employers’ contracts, they may stress their rates of immunizations and mammograms, rather than the comfort and function they provide for people with arthritis. After all, the former but not the latter are included in the HEDIS “report cards’’ to which many corporations look as they select benefit plans?] Whatever the trend du jour, the issues are sobering. Some interventions that clearly enhance QL are very costly. They do not save nor prolong life, and their cost can displace other important QL expenditures. While a health plan’s failure to cover them may be unfortunate, it is not necessarily undesirable, because health care is not the only important source of our quality of life. Many people find greater peace of mind to know they saved funds for retirement or their children’s education, than to know that they will receive maximal comfort in every medical encounter they might hypothetically need. Forcing them to pay, up front, for a plan that covers every such contingency can directly reduce the funds available for those other important priorities.

changes in provider-panels, for example, can force patients and physicians to meet as strangers rather than on a basis of familiarityand trust;31 high “productivity” expectations can limit the time and depth of important conversations; limited panel size can mean long waits for appointments. More broadly,commentators note that the “service” aspect of care has seriously deteriorated in many locales.32 People other than patients can also be affected. As hospitals reduce nursing staff and as health plans reduce rehabilitation and home health care benefits, families must often step into the breach to provide care to their loved ones.33 The result for those friends and family members can be fears and uncertainties, substantial time away from work and recreation, even the postponement or loss of a career. In sum, there seems to be a trend toward reduced coverage for QL-oriented care. More importantly, even where such erosion is not yet substantial or substantiated, current economic forces threaten to lead to future diminutions. Costs of care, particularly via new drugs and technologies, are rising,34 and both public demand and litigation impel plans to cover them.3s Accordingly, health plan premiums, flat or decreasing for several years, have begun to rise again. Yet corporate purchasers, buoyed by recent years’ success in limiting this important part of their cost of doing business, are unlikely to accept the endless double-digit hikes of a decade ago. Plans will thus be under pressure to trim costs wherever they can. Trapped in such conflicting pressures, anything health plans can dub “discretionary” becomes a likely target for cost cutting. QL care is likely to be a major target.

Trends and complexities The situation is not entirely bleak. Pressures to economize are at least partly offset when large purchasers such as employers seek value for their health care dollars. To the extent that workers’ health and happiness increase productivity, and to the extent that corporations want to retain workers over the long term, then those firms have a real interest in promoting workers’ wellbeing beyond the immediate demands of the day’s production. Some companies have begun serious efforts to ensure that the health care they purchase serves employees’ needs effectively. In one initiative, for instance, a coalition of major corporations, government entities, and others have created the Foundation for Accountability (FAcct). Initially studying common conditions such as asthma, diabetes and low-back pain, FAcct is going beyond the usual morbidity and mortality statistics to trace outcomes like time lost from work, ability to function in daily life, satisfaction with care, and other features relevant to QL.36 Elsewhere, evidence suggests that enhancing QL can save on costly morbidity. Recent research finds that exercise programs, comprehensive assessment, home-based ser-

Deeper issues The foregoing discussion provokes a serious challenge. Coverage for QL-oriented care is apparently shrinking, even as spending for costly, heroic, sometimes unproven life-savAs this ing technologies is under pressure to section argues, much of the problem stems from the fact that health plans standardly define their benefits coverage in terms of ‘‘medical necessity” Other commentators have questioned medical necessity as the fulcrum for benefits dec i s i o n ~ .However, ~~ for the most part those observers propose that the concept is too vague and that we need a clearer, more uniform way to identify which interventions are truly “necessary” and which aren’t.44 However, the real problems run far deeper than these previous discussions suggest. As argued below, the very idea of trying to classify 146

The Journal of Law, Medicine & Ethics

each intervention as somehow intrinsically “necessary” or not, and thereby of trying to assemble a single set of standards identifying “the” appropriate care in each situation is inherently misguided. Although perhaps unsettling, discarding the medical necessity criterion entirely and seeking a superior approach opens an important opportunity to make health care more coherent and more responsive to the legitimate diversity of values and goals in health care. That is the mission of this section.

History45 Understanding why medical necessity is the wrong benchmark for health plans’ benefits decisions must begin with a brief historical overview.46 As health insurance emerged in the 1930s and became a standard workplace benefit in the ’40s and ’SOs, insurers nearly always deferred to physicians’ judgments about what care a patient should have. Insurers existed to ensure that patients could pay hospitals and physicians, and there was little basis or reason to challenge professional opinions about complex scientificmatters. As costs spiraled upward, however, payers realized that care was sometimes excessive, experimental, or merely convenient. And so in the 1960s they tried to limit their coverage to just the “medically necessary” services. Even then, however, health plans defined what is medically necessary mainly by deferring to physicians’ accepted practices, because in the days prior to clinical guidelines it was impossible to specify, in any detail, which interventions should be provided under what conditions. When plans did deny coverage, courts often tended not to uphold those denials because the term was so vague.47 More recently, as research showed medical practices vary widely and often ine~plicably,~~ and as costs continued to soar, health plans have asserted far greater control over their expenditures. Contracts still ostensibly base coverage decisions on the concept of medical necessity (albeit supplemented by more, and more explicit, excl~sions).4~ But in practice most health plans now operationalize necessity via guidelines that tell physicians, rather than ask them, what is necessary and what is not. Throughout, the notion of medical necessity has remained the fulcrum of health care contracts.s0 To be precise, most health plans do not actually contain an express promise to cover all medically necessary health care. Rather, contracts typically identify the categories of services they cover, such as inpatient care and outpatient care (including hospital and health professional services, for both emergency and non-emergency situations), care for mental illness and substance abuse, prescription drugs, diagnostic services, home health care, durable medical equipment, rehabilitation, and the like. For care within the accepted categories, plans then typically carve out exclusions for services that are “experimental,” “innovative,” or otherwise 147

“not medically necessary.” However, by implication, so long as a service is within an accepted category and is acknowledged to be medically necessary, it is covered?l One would be hard-pressed to find a health plan contract that explicitly denies “necessary” services that fall within a category the plan pledges to cover. Note further that this implicit promise to cover all necessary services within the accepted categories is not limited to indemnity-style plans that govern resourcesvia reimbursement decisions and explicit utilization management. The promise also applies to capitated arrangements and other plans using financial risk-sharing. An MCO might contract with primary care physicians (PCPs) under a capitation arrangement, for instance, requiring them to provide primary care services and a spectrum of laboratory, radiology, and specialist services. Although such arrangements leave physicians considerable freedom to deliver the care they deem appropriate, in fact the contract the patient signs with the health plan will still contain the familiar categories of services, the same exclusions for medically unnecessary services, and the same implicit promise that, if a service within those categories is necessary, it will be covered. By that token, the health plan’s capitation contract with the physicians will ordinarily list the kinds of services physicians must cover in exchange for the set monthly per-patient fee.j2 However specific or general the list may be, and however free these physicians may be to deliver more than what they are obligated to provide, they must at least provide medically necessary services of the covered types.

Hazards There are five major problems with the requirement that each proposed medical intervention be classed, black-orwhite, as either “necessary” or “not necessary” in order to determine whether it warrants coverage. [11 Because the notion is vague, and simply does not conceptually fit a large portion of health care, its use as a cornerstone for benefits decisions has both facilitated and masked the deterioration of QL coverage outlined above. [2] The concept’s imperative character has removed important domains of choice from patients and even from health plans. [3] The economic savings from cutting QL-oriented benefits almost always accrue to people other than the patient, so that those savings cannot be used by patients to enhance their nonmedical QL. [4]As contractual coverage decisions are typically based on medical judgments about necessity, and as health plans now assert control over their assets, the result is steady second-guessing of, and potential interference with, physician judgments. [S]Health plans themselves are hampered by the necessity standard, whose vagueness makes even reasonable coverage denials difficult to enforce in legal contract disputes. Each problem will be explored in turn. [l]The ill fit between “necessity” and much of ordi-

Volume 28:2, Summer 2000 Wisconsin than in California?’ Just as the definition and its interpretation can vary widely from one plan or geographic region to another, implementation can change quickly and quietly even within a plan. Where necessity is defined according to physician acceptance, for instance, the iteration of what “works” can change as fleetingly as the fashions of consensus.58 And where health plans rely on (usually undisclosed) guidelines that can change without notice, patients’ specific benefits can shift underneath the vaguely-worded contract. The result can be a steady erosion, an undertow right underfoot, in that plan’s coverage. Epidural anesthesia and stroke rehabilitation were covered yesterday, but not today. A subscriber cannot know, up front, precisely what he has purchased in a health plan, nor be sure later that he owns what he originally (thought he) bought. And because the vague concept of “necessary” does not fit QL-oriented interventions very well, it is easy for health plans to dub these interventions discretionary, hence unnecessary, and therefore eminently eliminable. [2] The second problem concerns choice. “Necessary” is an imperative. In medicine it usually means that people other than the patient make most of the important decisions. Up to a point this reasoning is valid. If the fundamental objectives of health care are to save lives and preserve capacities for function, medical science has much to say about which sorts of care are essential, which are marginal, and which are actually harmful toward those goals. However, when the subject is quality of life, this analysis loses considerable force. Necessity and effectiveness, after all, can only be defined relative to a goal:9 Antibiotics are not “effective” per se. They are effective toward the goal of killing bacteria and, barring placebo effect, ineffective against viruses. But even for viral infections, if the physician’s goal is to placate a demanding patient, a prescription for antibiotics can be very effective. Where quality of life is at stake, the patient, not the health plan or even the physician, should ordinarily choose the goals. Removal of cataracts may be “necessary” for someone annoyed by an inability to do his favorite things, but unimportant for someone who enjoys his life as is, and pointless for patients with advanced dementia. The real question is whether a particular medical risk or monetary cost is worth paying in order to achieve a desired level of symptomatic relief or functional improvement. In this light, calling an intervention “necessary” usually means the health plan must cover it and thus that subscribers must pay for it in the purchase price. When “necessity” is defined as “everything that works,” people can be forced to pay for care that many might deem excessive.60 More fundamentally, it means that a one-size-fits-all approach will dictate the answers to the deeply personal riskbenefit and cost-value tradeoffs that permeate health care. [3] When a health plan shrinks its iteration of neces-

nary medical care is immediately obvious in the question now facetiously bandied about as health plans consider the recently approved drug for male impotence: how often per month (per week? per day?) is drug-assisted sexual intercourse “medically necessary”? So much of health care concerns quality of life. From dermatology to rheumatology to psychiatry, from orthopedics to ophthalmology to otolaryngology, gastroenterology, and primary care, many physicians’ routine work focuses predominantly on patients’ comfort and function. Choices among interventions here are not life-and-death, but a weighing of values. For a patient needing hip replacement, one vendor’s joint may be longer lasting but far costlier than an alternative. It is artificial precision to say that one is “necessary”-with the usual connotation of “essential” or “indispensable”-while the other is c‘unnecessary,’’with its usual connotation of “superfluous” or “pointless.” Both options have merits, and neither is clearly ‘‘the correct” choice. A given option is better described as “a good idea in this case,” “probably better than the alternative” or “good enough.” Similarly, one antibiotic regimen may be far less costly than another, but with somewhat higher risks of damage to the patient’s hearing. One antihypertensive regimen may be considerably more costly than an equally effective alternative, but with fewer side-effects and the enhanced convenience of once-a-day dosage rather than thrice-a-day, it may be much more palatable. A huge array of treatments fits this description: more or less worthwhile, but not “(un)necessary” in any ordinary sense. The patient will not die without them and in the odd case might even die because of them, while a host of alternatives can be reasonable even if each has drawbacks. The daily stuff of medicine is a continuum requiring a constant weighing of uncertainties and values.53 Aside from its ill-fit with most of health care, necessity is also a vague concept, as reflected in the diversity of health plans’ official definitions. At one extreme, an intervention must be “absolutely essential and indispensable for assuring the health and safety of the patient,”54or c‘cessentiulto reach a goal of improving or curing a disease.”’55 These minimalist definitions can deem many QL-oriented interventions to be unnecessary In contrast, Medicare’s definition of “reasonable and necessary” inquires whether the intervention is ‘“safe and effective, not experimental, and appropriate”’ as defined by the Food, Drug,and Cosmetic Act of 1938.56 In calling something necessary solely because it is useful, such broader definitions essentially mandate coverage for every medical intervention that “works.” Even within a given definition, payers can vary widely in their interpretation of “necessary.” In a study conducted by the General Accounting Office, Medicare payment for a chest x-ray is 45 1 times more likely to be denied in Illinois than in South Carolina, while payment for a physician office visit was almost ten times more likely to be denied in

148

The Journal of Law, Medicine 6 Ethics sary services, patients don’t often enjoy financial savings. Everyone but patients seems to benefit as health plans, employers, and governments reap the savings while patients endure greater discomfort and reduced function. And yet in most cases the patient ultimately pays for the plan, whether by direct purchase, by forgone wages or other employee benefits,61 or by taxes. Indeed, between 1970 and 1989, employers’ expenditures for wages and salaries increased by only 1%, while their spending for employees’ health benefits increased 163Y0.~’ Thus, increases in employee compensation went for health care before the workers ever saw the money or had the opportunity to think about alternative expenditures they might have preferred elsewhere in their lives. Unfortunately, so long as the deleted interventions are dubbed “unnecessary,” ostensibly patients are not being deprived of anything important, and the underlying, value-laden trade-offs remain unrecognized. Perhaps worse, if patients do not share in at least a portion of the savings when their care is cut, they have no opportunity to translate diminished medical-QL into enhanced nonmedical-QL elsewhere in their lives. Alternatively,where the benefit cuts serve mainly to avert cost increases, patients rarely have the opportunity to participate in decisions about which of the benefits financed by their own money should be cut, and which retained. [4]Because the “medical necessity” standard requires a medical judgment as a prerequisite to a coverage determination, health plans are often accused of meddling in physicians’ business, even of literally practicing medicine. To be sure, the issue is hotly disputed. Attorneys who represent health plans commonly insist that the plans do not make medical decisions, they make only economic coverage decisions. And sometimes this is correct, as for instance when a contract explicitly excludes acupuncture or covers only thirty days’ inpatient mental health treatment. However, when a health plan must assess the medical value of an intervention in order to determine a member’s benefits, it can only make that contract determination by first making a medical decision.63 Admittedly, the health plan is not “practicing medicine” in the full sense of examining patients and performing procedures. But it is engaging in the most central function of medicine as a profession: making judgments about what is wise in the face of uncertainty” Hence, so long as the health plan must determine whether an intervention is medically necessary as a prelude to its coverage decisions, it will inevitably be second-guessing, and potentially interfering with, physicians’ care. [5] The vagueness of “medical necessity” as the fulcrum for coverage decisions also disserves health plans. When widely differing plans all implicitly promise the same thing-all necessary care within the covered categories (minus explicit exceptions)-patients tend to expect the same level of benefits, even if a given plan’s premium price is substantially lower. They expect the same because they

were promised the same, and they may be annoyed enough to sue when disappointed. When they do, they often win. As noted above, although courts must generally enforce contracts as written, they construe ambiguities against the party that drafted the contract. And so when health plans defend coverage denials with only a fuzzy “we deemed this treatment unnecessary,’’ they often loseY In addition, judges are even more likely to side with patients where contracts are “adhesory ” (offered on a take-it-or-leave-it basis to a vulnerable purchaser)-usually the case in health insurance.66 Reciprocally,however, courts have shown considerable willingness to enforce health plans’ denials of benefits, but only when those denials are based on clear contractual provision~.~’Accordingly, if health plans want to draw enforceable limits on their coverage obligations, they must be far more specific than “medically unnecessary.”68 In sum: the medical necessity approach to defining health care coverage means that people other than the patient make crucial QL decisions, spend patients’ money, change their coverage and diminish patients’ QL, keep the savings, and in the process preempt or infringe a wide array of patients’ medical and nonmedical QL choices. The problem is not the cutbacks per se. Not everything in medicine is worth doing, and not everything worth doing for some people is worth mandatory purchase for everyone. Elsewhere in life people forgo many products and servicesthey deem not to be worth the cost, even though the items may be clearly useful in their own right. People buy cheap old cars that are less crash-worthy than new ones, and many buy a good restaurant meal before boosting their retirement fund. On the whole, such choices are legitimate. They are the currency of human autonomy that permits each individual to be the kind of person he wants to be and to live as he sees fit. Rather, the problem is that the cutbacks are viewed as matters of science, of “medicine” to be determined by “experts,” rather than as the very personal value choices they really are. There is little justification for forcing everyone to spend large amounts on medically-based QL if the opportunity cost is to force them to forgo other kinds of QL, from new clothes to college courses to vacation trips, that may be personally more important. Not all quality of life comes through doctors, drugs, and devices. Reciprocally, neither is it appropriate for health plans unilaterally and covertly to discard QL coverage, simply because they find it more economical or convenient to do so.

Proposals Though the economic upheaval in health care is troubling in many ways, it brings important opportunities. Limits on resources, plus the need to replace vague concepts like necessity with more specific commitments, mean that we must

149

Volume 28:2, Summer 2000 make more explicit, careful choices about what to buy and what to forgo. It is a chance to take control of health care, rather than having our resources and ow values preempted by relentlessly rising costs. Severalchanges need to be made.

Specified benefits rather than medical necessity If health plans are to drop the illusory promise to provide all “necessary” health care while in fact providing widely differing and sometimes eroding benefits, there are logically only two alternatives. One is to mandate actual, absolute uniformity. Though attractive for its apparent social equality, such a coercive approach would either force everyone to accept a relatively low standard of care, or it would mandate a higher uniform standard via tax increases that could seriously impinge on other important p r i ~ r i t i e s . ~ ~ A remarkably large proportion of medicine aims to improve QL. It is not at all clear that people should be required (as they would under a high-level standard) to give medicallyproduced QL an automatic priority over the many other kinds of QL to be found outside health care. Reciprocally, it is not clear why we should forbid someone to purchase a particular treatment that will enhance his comfort or function, simply because we cannot afford to give it to everyone. The alternative is to jettison the pretense of uniformity. Instead of vague promises to provide “all the care you need” while keeping operational definitions of “need” covert and shifty, health plans should lay open the clinical guidelines by which they already make benefits determinations and guide patient care.7o Rather than providing only vague promises to render care that’s “necessary,” plans should explicitly base their contracts on those guidelines: “If you buy this plan, here is what you will receive.”71 This idea of “guidelines-based contracting” need not be elaborated in detail here, because it is outlined elsewhere.” Still, a brief summary would be useful. Guidelines-based contracting would not require offering an endless menu of options, or mailing a complete, detailed set of guidelines to every member.” Indeed, a fairly limited range of diversity is arguably refera able.^^ It would mainly mean acknowledging that care is limited, and providing information about how those limits are chosen, together with illustrative examples and some reasonable opportunity (e.g., via a web site) to view the details. Only then can consumers know what they are purchasing-and when their benefits have eroded. And only then can health plans make coverage decisions by citing explicit policies rather than by ad hoc, sometimes idiosyncratic, medical judgments.7s Specifyingbenefits is important, but not the whole answer. Some kinds of care are so important to the mission and integrity of medicine that they are essential in any adequate health plan. In this article it will be assumed, not

150

argued, that it is morally appropriate if not imperative for an affluent society to ensure some level of basic care for all its citizens. Accordingly, some notion of “basic” must be articulated to shape the minimum level of care that should be available to every person. QL-oriented care raises especially interesting twists to this otherwise familiar challenge, because QL does not involve life and death, only comfort and function. A two-part analysis emerges. In asking whether a particular QL-oriented intervention should be covered, one must first inquire whether this form of care is so basic that all citizens should have it. Conversely, where care is not deemed basic, the question is how to empower individual patients to act on their own views about which QL interventions are worth purchasing.

Defining ‘basic’ The former question, regarding which QL interventions are basic, invokes important societal values about what level of care should be available to everyone, regardless of ability to pay At one extreme, it would be intrusive and cost-prohibitive to mandate every medical QL enhancement as “basic.” At the other extreme, it would be abhorrent to refuse some QL measures, such as rehabilitation that could fully return a stroke patient to ordinary functions of daily living. It seems simply not right, in an affluent society, to watch fellow citizens suffer serious pain or dysfunction when a modest collective effort could solve or greatly alleviate the problem. The difficult, in-between decisions evoke societal views about fundamental decency in the treatment of fellow human beings. In this brief article, the objective is not to provide a decisive analysis, but only to suggest some possible directions. QL, it may be recalled, primarily concerns function and comfort. Basic support for function might be patterned on the Americans with Disabilities Act, to include interventions that support the ability to engage in major life activities, “such as ‘caring for one’s self, performing manual tasks, walking, seeing, hearing, speaking, breathing, learning, and working.”’76 Professor Norman Daniels offers a somewhat comparable concept, proposing that health care coverage should focus on the things that provide people with opportunities for species-normal function.” Decisions about comfort-oriented interventions are much more amorphous. They might be enlightened via concepts about humaneness, or more narrowly via some shared vision about when, under the “rule of rescue,”78 it would be inhumane to leave this or that form of mental or physical suffering unrelieved. In the clearest cases, basic QL care must try to relieve ongoing pains and discomforts that interfere with ordinary activities, and also those that, even if only transient, can leave substantial emotional scars. In contrast, discomforts that are less intense, or that have

TbeJournal of Law, Medicine 6 Ethics

lesser sequelae, are proportionately less significant. In these cases it may be entirely reasonable for a patient, e.g., to choose the less comfortable high-osmolar contrast media if the savings can be put to better use elsewhere in his life. These brief suggestions may help, but obviously will not resolve the question of how to identify which QL-related care is basic and what lies beyond. Such decisions require collective, highly political choices that draw upon our social conscience, our level of affluence, our competing priorities from education to road-construction, and our views about the limits of reasonableness in taxing citizens’ generosity to help their less fortunate fellow citizens. Especially where we collectively pay the bills, it is important to identify the forms of care we deem most important.79

purchasing pools that lower costs while expanding workers’ options.83 Choices within health plans present opportunities to fine-tune one’s coverage.84 Lower-cost health plans could permit subscribersto upgrade their coverage, at various junctures, for an extra fee; reciprocally, a more lavish, everything-included plan might offer rebates to those who opt to forgo discretionary QL interventions. In fact, opportunities for in-plan “upgrades” are already quite common. Perhaps the leading form is the “point of service” plan that permits patients, for an additional payment, to select a provider not on that plan’s panel. In some cases the patient will gain access to providers with superior knowledge and skill and thereby, perhaps, a superior outcome. In others, the freedom to choose a provider who inspires greater confidence or better rapport can enhance QL simply via a better physician-patient relationship. Many people have been willing to pay Likewise, copays on discretionary interventions can permit patients who want the extra care to obtain it.85 Many MCOs now offer costlier drugs in a two- or three-tiered system of copays, rather than simply excluding them from the formulary or limiting them to patients with specific indications. Enrollees thus can have access to drugs offering fewer side-effectsor greater convenience, if it is important to thema6 Overall, choice itself is an important dimension in quality of life. People who choose their own health plan tend to be more satisfied than people in the same plan who did not have a choice,87 while choices among treatments can enhance satisfaction with and adherence to the treatment that is chosen.88

Expanding choice Any threshold for defining basic QL care will leave a number of interventions unfunded. In this area, choice should be available. Quality of life, after all, concerns not just health and health care, but all dimensions of human life. Individuals should not be forced to spend a disproportionate share on medical QL when so many other things are valued-from home and education, to music and sports. Reciprocally, they are not entitled to demand whatever they want from their health plan, regardless what they paid for. Accordingly, explicit choices about plan limits should be available on two levels: among health plans, and within plans. These proposals are described elsewhere, hence will be only briefly summarized here.80 Choices among plans serve several purposes in the context of this discussion. First, when choice is combined with explicit specification of benefits and open guidelines, patients can know what they are buying and can choose or change plans accordingly Plans have less opportunity and less incentive to commit silent erosion, because they must now please the enrollee, not just the employer, and must do so by displaying more specifically what they provide. Second, opportunities to choose among leaner vs. richer plans permit subscribers to decide whether they value QLoriented health care enough to spend higher sums on it, or whether they would rather focus their QL-spending outside health care. So long as each plan covers basic care, such options are legitimate. Finally, when individual subscribers have the power to exit, the plan has an incentive to please them. At present, so long as employers choose plans, plans are more eager to please the employer whose values and objectives may be very different from those of the employees. Although most employees currently have little choice among health plans,81 this need not be the case. The Federal Employees Health Benefits Plan provides federal employees with a wide range of health plans from which to choose.*2 Similarly, many corporations have now formed

Conclusion Many observers of our rapidly evolving health care scene have noticed problems in basing health care benefits on “medical necessity” The concept is so vague, and its application so often arbitrary, that it constantly invites managers to peer over physicians’ shoulders. And yet we cling to the concept. If only we can define what’s really necessary, then all will be well. If there is any single lesson from this excursion into quality of life, it is that the notion of medical necessity is deeply, inherently deficient as the central criterion by which health plans should determine what kinds of care they cover. Perhaps it can have a role regarding life/death interventions (although even that is dubious, given the uncertainties, goalchoices, and risk/value/cost trade-offs that permeate even that area of medicine 89). But it should be clear from the foregoing that medical necessity should no longer serve as the overall cornerstone of health care benefits. A huge portion of medicine is geared toward human function and comfort, as beyond the bare preservation of biological existence. And in that realm of deeply personal values about

15 1

Volume 28:2, Summer 2000 tients with End-Stage Renal Disease,” N. Engl.]. Med., 312 (1985): 553-559; LF. Tannock, “Treating the Patient, Not Just the Cancer,” N.Engl. /. Med., 317 (1987): 1534-35; Morreim, Impossibility, supra note 1. 3. See detailed discussions of the numerous methodological and theoretical problems inherent in measuring QL, s u p a note 1. 4. D.C. Hadorn, ”The Problem of Discrimination in Health Care Priority Setting,”]AMA, 268 (1992): 1454-1459; A. Smith, “Qualms about QALYs,” Lamet, May 16 (1987): 1134-1136. 5. GUSTO Investigators,“An International Randomized Trial Comparing Four Thrombolytic Strategies for Acute Myocardial Infarction,” N. Eng1.J. M e d , 329 (1993): 673-682;The GUSTO Investigators,“The Effects of Tissue-Plasminogen Activator, Streptokinase, or Both on Coronary-Artery Patency, Ventricular Function, and Survival after Acute Myocardial Infarction,” N. Engl. J. Med., 329 (1993): 1615-1622; M.E. Farkouh, J.D. Land and D.L. Sackett, “Thrombolytic Agents: The Science of the Art of Choosing the Better Treatment,” Annals of Internal Medicine, 120 (1994): 886-888; K.L. Lee, et al., “Holding GUSTO up to the Light,” Annals of Internal Medicine, 120 (1994): 87-881. 6. S.H. Woolf and R.S. Lawrence, “Preserving Scientific Debate and Patient Choice: Lessons from the Consensus Panel on Mammography Screening,”JAMA, 278 (1997):2105-2108; D.L. Davis and S.M. Love, “Mammographic Screening,” JAMA, 271 (1994): 152-153; K. Kerlikowske, et al., “Efficacy of Screening Mammography,”JAMA, 273 (1995): 149-154; K.K. Lindfors and J. Rosenquist, “The Cost-Effectivenessof Mammographic Screening Strategies,” JAMA , 274 (1995): 881-884; D.R. Ransohoff and R.E Harris, “Lessons from the Mammography Screening Controversy: Can We Improve the Debate?,” Annals of lnternal Medicine ,127 (1997):1029-34; E Salzmann, K. Kerlikowske and K. Phillips, “Cost-Effectiveness of Extending Screening Mammography Guidelines to Include Women 40 to 49 Years of Age,” Annals of lnternul Medicine, 127 (1997): 955-65; D.M. Eddy, “Breast Cancer Screening in Women Younger than 50 Years of Age: What’s Next?,” Annals of Internal Medicine, 127 (1997): 1035-36. 7. E.J. Emanuel and L.L. Emanuel, “The Economics of Dying,” N. Eng1.J. Med, 330 (1994):540-544; L. J. Schneiderman, et al., “Effects of Offering Advance Directives on Medical Treatments and Costs,”Annals oflnternalMedicine, 117 (1992):599606. 8. “Managed care” can refer to widely varying arrangements in the financing and delivery of health care. However, a common description, articulated by Marc Rodwin, will be used here. Managed care refers to health insurance combined with ... controls over the delivery of health services. Managed care organizations (MCOs) exercise control over the kind, volume, and manner in which services are provided by choosing providers, or by controlling their behavior through financial incentives, rules, and organizational controls. Under traditional indemnity insurance and fee-for-service medical practices, the insurers enter into a contract with the insured party and reimburse the individual for certain medical expenses that are incurred. The individual receives medical services from any provider he or she chooses and usually pays a fee for each service rendered, with the insurer having no control over the choice of provider or provision of services. Managed care changes this relationship either (1)by directly providing the contracted-for services; or (2) by exercising control over the services provided. Many indemnity insurers now provide managed care in that they exercise control over their beneficiaries’ use of medical services. They require preauthorization for. . .expensive referrals or procedures. They

how to live well, distributing benefits according to “necessity” makes little sense. People vary profoundly in the ways they evaluate quality of life, and pursue quality in their lives. We cherish different things, are bothered by different things, are helped by very different kinds of things. Health care is only one part of the picture, and it plays a different role for each person. If anything follows, it is that a one-size-fits-all approach is inappropriate-both for quality of life outside health care and for the comfort and function offered by medical interventions. To suppose that each QL intervention can intelligibly be labeled, black or white, as either “necessary” or “not necessary” belies the complexity both of medicine, and of human goals and aspirations. In this way, quality of life provides a distinctive platform from which to view the challenges of health care as we seek good care, acceptable cost, and a reasonable balance between the goods available through health care and those that can only be found outside it. While the erosion of QL coverage in health plans raises serious concerns, finding productive ways to address the challenge should, in the end, enhance health care for everyone.

Acknowledgments The author acknowledges with gratitude the very helpful comments provided on earlier drafts by Len Fleck, Ph.D., Loretta Kopelman, Ph.D., JamesS a b i i M.D., Lance Stell, Ph.D., Kenneth Kipnis, Ph.D., and several anonymous reviewers.

References 1. E.H. Morreim, “The Impossibility and the Necessity of Quality of Life Research,” Bioethics , 6 (1992):218-232 (hereinafter, “Impossibility”); A. Leplege and S. Hunt, “The Problem of Quality of Life in Medicine,” JAMA, 278 (1997):47-50; E.H. Morreim, ”Quality of Life in Health Care Allocation,” in W T. Reich, ed. Encyclopedia of Bioethics (New York: Simon and Schuster, 1995): at 1358-1361;E.H. Morreim, “Computing the Quality of Life,” in G. Agch and C. Begley, eds., The Price of Health: Cost Benefit Analysis in Medicine (Dordrecht: D. Reidel Pub. Coy 1986): at 45-69; M.A. Testa and D.C. Simonson, “Assessment of Quality-of-Life Outcomes,” N. Engl. /. Med., 334 (1996):835-40;A. Coates, et al., “Improving the Quality of Life During Chemotherapy for Advanced Breast Cancer,” N. Engl. J. Med ., 317 (1987): 1490-95; T.M. Gill and A.R. Feinstein, % Critical Appraisal of the Quality of Quality-of-LifeMeasurements,” ]AMA ,272 (1994):619-26; A.F. Lehman, “Measuring Quality of Life in a Reformed Health System,” Health Affairs, 14, no. 3 (1995): 90-101; A. Smith, “Qualms About QALYs,” Lancet, May 16 (1987): 1134-36; G.H. Guyatt, D.H. Feeny and D.L. Patrick, “Measuring Health-Related Quality of Life,” Annals of lntemaf Medicine ,118 (1993): 622-29; J. LaPuma and E.F. Lawlor, “Quality-Adjusted Life-Xears: Ethical Implications for Physicians and Policymakers,” JAMA, 263 (1990): 2917-21. 2. B.J. McNeil and et al, “Tradeoffs Between Quality and Quantity of Life in Laryngeal Cancer,” N. Engl. J. Med., 305 (1981): 982-987; R.W Evans, et al, “The Quality of Life of Pa-

152

Theloumal of Law, Medicine t 9 Ethics do not reimburse claims from medical providers for services rendered if the organization decides they were not necessary. M.A. Rodwin, “Managed Care and Consumer Protection: What are the Issues?,” Seton Hall Law Review, 26 (1996): 1007-54, at 1009. 9. E.H. Morreim, “Redefining Quality by Reassigning Responsibility,” American Journal of Law and Medicine, 20, (1994): 79-104, at 80. 10. J.K! Mold and H.F. Stein, “The Cascade Effect in the Clinical Care of Patients,” N. Engl. J. Med., 314 (1986): 512514; E.S. Fisher and H.G. Welch, “Avoiding the Unintended Consequencesof Growth in Medical Care. How Might More be Worse?,”JAMA, 281 (1999): 446-453; I? Franks, C.M. Clancy and PA. Nutting, “Gatekeeping Revisited-Protecting Patients from Overtreatment,” N. Engl. J- Med., 327 (1992): 424-429; J.F. Burnum, “Medical Practice A La Mode,” N. Engl. J. Med., 317 (1987): 1220-1222; J.E. Hardison, ”To Be Complete,” N. Engl. J. Med., 300 (1979): 193-194. 11. J.E. Wennberg, “Which Rate is Right?,” N. Engl. J. Med., 314 (1986):310-311; M.R. Chassin, R.H. Brook, R.E. Parkand et al., “Variations in the Use of Medical and Surgical Services by the Medicare Population” N. Engl. J. Med., 3 14 (1986):285-290; J.E. Wennberg, J.L. Freeman and WJ. Culp, “Are Hospital Services Rationed in New Haven or Overutilized in Boston?,” Lancet,l (1987):1185-1188; H.G. WelchHG,M.E.MillerandWI? Welch, “An Analysis of Inpatient Practice Patterns in Florida and Oregon,” N. Engl. J. Med., 330 (1994):607-612; J.E. Wennberg, “The Paradox of Appropriate Care,” JAMA,258 (1987): 25682569; M.R. Chassin, et al.,”Does Inappropriate Use Explain Geographic Variations in the Use of Health Care Services?,”]AMA, 258 (1987):2533-37; J.E. Wennberg, “Outcomes Research, Cost Containment, and the Fear of Rationing,” N. Engl. J.Med., 323 (1990): 1202-1204; L.L. Leape, et al., “Does Inappropriate Use Explain Small-Area Variations in the Use of Health Care Services?,” JAMA,263 (1990): 669-672; L.L. Leape, et al., “Relation Between Surgeons’ Practice Volumes and Geographic Variation in the Rate of Carotid Endarterectomy,’”. Engl.1. Med., 321 (1989): 653-657; J.E. Wennberg, “Unwanted Variations in the Rule of Praaice,”JAMA, 265 (1991):1306-1307;ED. Cleary, et d.,“Variations in Length of Stay and Outcomes for Six Medical and Surgical Conditions in Massachusetts and California,” JAMA , 26 (1991):73-79; E.S. Fisher, H.G. Welch and J.E. Wennberg, “Prioritizing Oregon’s Hospital Resources: An Example Based on Variations in Discretionary Medical Utilization,” JAMA, 267 (1992): 1925-1931; S. Greenfield, et al., “Variations in Resource Utilization Among Medical Specialties and Systems of Care: Results from the Medical Outcomes Study,”JAMA, 267 (1992):16241630; WI? Welch, et al., “Geographic Variation in Expenditures for Physicians’ Services in the United States,” N. Engl. J. Med., 328 (1993): 621-627; M.G. Miller, et al., “Variation in Practice for Discretionary Admissions,” JAMA,271 (1994): 1493-1498; AS. Detsky, “Regional Variation in Medical Care,” N. Engl. J. Med., 333 (1995): 589-590; E. Guadagnoli, et al., “Variation in the Use of Cardiac Procedures After Acute Myocardial Infarction,” N. Eng1.J. Med., 333 (1995):573-578; L. Pdote, et al., for the GUSTO- 1 Investigators, “RegionalVariation Across the United States in the Management of Acute Myocardial Infarction,” N. Eng1.J. Med., 333 (1995): 565-572; C.M. Ashton, et d., “Geographic Variations in Utilization Rates in Veterans Affairs Hospitals and Clinics,” N. Engl. J. Med., 340 (1999): 32-39; G.T. O’Connor, et al., “GeographicVariation in the Treatment of Acute Myocardial Infraction: The Cooperative Cardiovascular Project,” JAMA,281 (1999):627-633; J.E. Wennberg, Understanding Geographic Variations in Health Care Delivery,” N. Engl. J. Med.,

340 (1999): 52-53. 12. S.M. Retchin, et al., “Outcomes of Stroke Patients in Medicare Fee For Service and Managed Care,”JAMA, 278 (1997): 119-124. 13. J.R. Webster and J. Feinglass, “Stroke Patients, ‘Managed Care,’ and Distributive Justice,”JAMA, 278 (1997): 161-62. 14. Ahlson v. G7E Corp., 790 F. Supp. 1265 (D.Md. 1992). 15. Bedrick v. TravelenInsur. Co., 93 E3d 149 (4th Cir, 1996). By the same token, people needing motorized wheelchairsor other specialized durable medical equipment may find their health plans exceedingly reluctant to authorize them. See, for example, L. Iezzoni, “Boundaries,” Health Nairs, 18, no. 6 (1999):156-64; A.I. Batavia, “ Of Wheelchairs and Managed Care,” Health Affairs, 18, no. 6 (1999): 177-82. 16. J.P Weiner, et al., “Variation in Office-Based Qualiy A Claims-Based Profile of Care Provided to Medicare Patients with Diabetes,” JAMA,273 (1995): 1503-1508; The Diabetes Control and Complications Trial Research Group, Lifetime Benefits and Costs of Intensive Therapy as Practiced in the Diabetes Control and Complications Trial,” JAMA,276 (1996): 1409-1415; L.L. Leape, “Translating Medical Science into Medical Practice: Do We Need A National Medical Standards Board?” JAMA,273 (1995): 1534-37; H.M. Harris, “Disease Management: New Wine in New Bottles?” Annuls of Internal Medicine, 124 (1996): 83 8-42; L.N. Newcomer, “Physician, Measure Thyself,” Health Affairs, 17, no. 4 (1998):32-35; D. Grandinetti, “Can You Trust an HMO with Your Elderly Patients?” Medical Economics, 74 no. 8 (1997): 94-109, at 101; R.S. Epstein and L.M. Shenvood, “From Outcomes Research to Disease Management: A Guide for the Perplexed,” Annals o f Internal Medicine, 124 (1996): 83237; M.T. Donohoe, “Comparing Generalist and Specialty Care: Discrepancies, Deficiencies, and Excesses,” Archives of Internal Medicine, 158 (1998): 1596-1608, at 1600; L. Page, “Can Plans Manage the Preventive Care Diabetics Need?” American Medical News, March 20, 1995, at 4-5; S.K. Kraft, et al., “Primary Care Physicians’ Practice Patterns and Diabetic Retinopathy,” Archives of Family Medicine, 6 (1997): 29-37; R.C. Wender, “Preventive Health Care for Diabetics: A Realistic Vision,” Archives o f Family Medicine, 6 (1997): 38-41. Unfortunately, good care for these people can penalue health plans. First, if its good care attracts more diabetic patients, the plan suffers economicallybecause typical premium structures have little or no risk adjustment to bring in extra revenue for these patients’ higher-cost care. Second, a given plan may not enjoy the economicsavingsthat long-term prevention can generate, because the patients they help today will likely be in some other health plan a few years hence. A.C. Enthoven and C.B. Vorhaus, “A Vision of Quality in Health Care Delivery,” Health Affairs, 16, no. 3 (1997): 44-57, at 53. 17. S.M. Retchin, et al., ”Perioperative Management of Colon Cancer Under Medicare Risk Programs,” Archives o f Family Medicine, 157 (1997): 1878-84. 18. R.S. Stern, “Managed Care and the Treatment of Skin Diseases,”ArchivesofDermatology, 132 (1996):1039-1042; WD. James, “DermatologicFormularies in the Managed Care Setting,” Archives of Dermatology ,132 (1996): 1120-1121; C.W Lober, “Dermatology: Positioned for Health Care Reform,” Archives of D m t o l o g y , 132 (1996):1065-1067; ES. Russell and L.J. Kaplan, “The American Academy of Dermatology’s Response to Managed Care and Capitation,” Archives o f D m t o l o g y , 132 (1996): 1125-1127; B.J. Hammes and S. Webster, “Professional Ethics and Managed Care in Dermatology,” Archives of Dermatology, 132 (1996): 1070-1073; R.S. Kirsner and D.G. Federman, “Lack of Correlation Between Internists’ Ability in Dermatology and

153

Volume 28:2, Summer 2000 not mandated such coverage; Hawaii and Mississippi lawmakers, however, introduced bills in 1997.” Korobkin, at 17, n. 84. Fourteen states have enacted legislationmandating minimumstay requirements for mastectomy patients: Arkansas, Connecticut, Florida, Illinois, Maine, Montana, New Jersey, New Mexico, New York, North Carolina, Oklahoma, Pennsylvania, Rhode Island, and Texas. . . . New York was the first to enact such legislation, requiring every health insurance policy that provides inpatient hospital care to include inpatient care hospital coverage for those who undergo a mastectomy or lymph node dissection for a length to be determined appropriate by the attending physician. See N.Y. Ins. Law § 4303 (McKinney, WESTLAW through L. 1999, ch. 6-13). (Korobkin, at 17, n. 85.) For a discussion of litigation and legislation regarding patients’ rights to file grievances and appeals, see T.E. Miller, “Center Stage on the Patient Protection Agenda: Grievance and Appeal Rights,” ]ournu1 of Law, Medicine &Ethics, 26 (1998): 89-99. 26. S.A. Beebe, et al., “Neonatal Mortality and Length of Newborn Hospital Stay,” Pediatrics, 98 (1996):231-235 ; M.H. Chin, “Health Outcomes and Managed Care: Discussing the Hidden Issues,” American ]ournal of Managed Care, 3, (1997): 756-762; M.B. Edmonson, J.J. Stoddard and L.M. Owens, “Hospital Readmission with Feeding-Related ProblemsAfter Early Postpartum Discharge of Normal Newborns,” ]AMA, 278 (1997): 299-303; L.L. Liu, et al., “ The Safety of Newborn Early Discharge: The Washington State Experience,” JAMA, 278 (1997): 293-298; J.A. Gazrnarian, et al., “Maternity Experiences in a Managed Care Organization,” Health Affairs, 16, no. 3 (1997): 198-208; D.A. Lane, et al., “Early Postpartum Discharges: Impact On Distress and Outpatient Problems,” Archives of Family Medicine, 8 (1999): 237-242. 27. B.R. Luce, C.A. Lyles and A.M. Rentz, “The View From Managed Care Pharmacy,” Health Affairs, 15, no.4 (1996): 16876; C.E. Quinn, “HOWAn HMO Doctor Determines ‘Medical Necessity’,” Medical Economics, 74, no. 4 (1997): 198-202. 28. TAP Pharmaceuticals v U.S. Dept. of Health, 163 F.3d 199 (4th Cir. 1998). 29. R.K. Schreter, “Ten Trends in Managed Care and Their Impact on the Biopsychosocial Model,” Hospital and Community psychiatry, 44 (1993):325-27, at 326. 30. D.J. Cook, et al., “The Relation Between Systematic Reviews and Practice Guidelines,” Annals of Internal Medicine, 127 (1997): 210-16, at 213. 31. A.C. Roulidis and K.A. Schulman, “Physician Communication in Managed Care Organizations: Opinions of Primary Care Physicians,” ]oumal of Family Practice,39 (1994):446-51; R.M. Epstein, “Communication Between Primary Care Physicians and Consultants,” Archives of Family Medicine, 4 (1995): 403-09; S.S.H. Kaplan, et al., “Characteristics of Physicians with Participatory Decision-Making Styles,” Annuls of Internal Medicine, 124 (1996): 497-504. 32. J.W Kenagy, D.M. Berwick and M.F. Shore, “Service Quality in Health Care,”]AMA, 281 (1999): 661-665. 33. C. Kovner and EJ. Gergen, ‘‘Nurse Staffing Levels and Adverse Events Following Surgery in U.S. Hospital,” Imag] Nurs Sch, 30, no. 4 (1998):315-21. 34. E. Tanouye, “ U S Has Developed An Expensive Habit: Now, How to Pay for It? Scores of Pricey New Pills Improve Quality of Life, but Bust Health Budgets,” Wall Street Journal, November 16, 1998, at A-1, A-10 35. J.H. Ferguson, M. Dubinsky and EJ. Kirsch, “Court-Ordered Reimbursement for Unproven Medical Technology: Circumventing Technology Assessment,” ]AMA, 269 (1993): 21 16-

their Patterns of Treating Patients with Skin Disease,” Archives of Dermutology, 132 (1996): 1043-1046; N.S. Penneys, “Quality Assessment of Skin Biopsy Specimens Referred to Anonymous Consultants,” Archives of Dermatology, 132 (1996): 1053-1056; S.D. Resnick, R. Hornung and T.R. Konrad, ‘1Comparison of Dermatologists and Generalists,” Archives of Dermatology, 132 (1996):1047-1052; D.G. Federman, J. Concato and R.S. Kirsner, “Comparison of Dermatologic Diagnoses by Primary Care Practitioners and Dermatologists: A Review of the Literature,” Archives of Family Medicine, 8 (1999): 170-172. 19. C.L. Goldzweig, et al., “Variations in Cataract Extraction Rates in Medicare Prepaid and Fee-For-Service Settings,” ]AMA, 277 (1997):1765-68; S.A. Obstbaum, “Should Rates of Cataract Surgery Vary by Insurance Status?”]AMA, 277 (1997): 1807-08. As noted above, less care is not invariably worse care. It is entirely possible that patients in FFS plans have received this service too frequently, or too early in the course of the disease. Nevertheless, cataracts do affect QL. An unduly narrow standard for authorizing the procedure could leave lives considerably disrupted by an inability to see well enough for such routine activities as reading, driving, or watching television. 20. ED. Jacobson and C.J. Rosenquist, “The Introduction of Low-Osmolar Contrast Agents in Radiology,”]AMA, 260 (1988): 1586-1592; D.M. Eddy, ‘Applying Cost-Effectiveness Analysis: The Inside Story,”]AMA, 268 (1992): 2575-2582; J.H. Ellis, et a]., “Selective Use of Radiographic Low-Osmolality Contrast Media in the 1990s. Radiology 1996; 200: 297-311; S.M. Palmisano, “Low-Osrnolality Contrast Media in the 1990s: Prices Change,” Radiology, 203 (1996): 309-315; EW Radensky and N.E. Cahill, “Universal Use of Low-Osmolality Contrast Media for the 1990s,” Radiology, 203 (1996):310-11. 21. E. Hirshfeld, “The Case for Physician Direction in Health Plans,” Annals of Health Law, 3 (1994): 81-102, at 93; D. Crittenden, “Don’t Give Birth up Here,” Wall Street]ournal,March 31, 1994, A-14. 22. “Medi-Cal Patients in Labor Can’t Be Denied Pain Meds,” American Medical News, September 21, 1998, p. 21. 23. ”In 1998,congress Enacted the ‘Women’s Health and Cancer Rights Act of 1998,’ amending ERISA. The Act requires all group health plans and health insurance issuers offering coverage for mastectomies to provide reimbursement for reconstructive surgery that is associated with a mastectomy” (citing: 29 U.S.C. S 1185(b)(Supp. 1999)). S. Hoffman. “A Proposal for Federal Legislation to Address Health Insurance Coverage for Experimental and Investigational Treatments,” Oregon Law Review 78 (1999): 203-274,at 252. See also TN Code Ann. 56-7-2507. California’s law more broadly covers reconstructive surgery. See L. Page, “Will New California Law Hike Surgery Demand?” American Medical News, October 19,1998, pp. 1,58,59. 24. N. Jeffrey, “Corrective or Cosmetic? Plastic Surgery Stirs A Debate,” Wall StreetJournal, June 25, 1998, at B-1, B-15. 25. Newborns’ and Mothers’ Health Protection Act of 1996, Pub. L. No. 104-204, 110 Stat. 2935 (codified as amended scattered sections of 29 U.S.C. and 42 U.S.C. “The law provides that group health insurance plans may not restrict postpartum hospital stays for a mother or a newborn to less than 48 hours in the case of a vaginal delivery and 96 hours in the case of a Ceasarean section delivery. See S 71 l(a)(l),110 Stat. at 2936.” R. Korobkin, “The Efficiency of Managed Care ‘Patient Protection’ Laws: Incomplete Contracts, Bounded Rationality, and Market Failure,” Cornell Law Review, 85 (1999): 1-88, at 3. “Since 1995,41 states have mandated coverage for extended postpartum hospital stays . . . Colorado, Hawaii, Michigan, Mississippi, Nebraska, Utah, Vermont, Wisconsin, and Wyoming have

154

The Journal of Law, Medicine 6 Ethics 2121; WE Peters and M.C. Rogers, “Variation in Approval by Insurance Companies of Coverage for Autologous Bone Marrow Transplantation for Breast Cancer,” N.Engl. 1. Med. 330 (1994): 473-477; E.H. Morreim, “Moral Justice and Legal Justice in Managed Care: The Ascent of Contributive Justice,”]ournul of Law, Medicine, &Ethics, 23 (1995): 247-265. 36. Its initial sponsors include major corporations such as AT&T, GTE, Electronic Data Systems, Ameritech, and American Express, although it also includes federal government entities such as HCFA and the Dept of Defense, state governments including Wisconsin and Oregon, and organizations such as the AARP and the AFL-CIO labor union. See EM. Ellwood, “HOWDoctors Can Regain Control of Health Care,” Medical Economics, 73, no. 9 (1996): 178-92; K. Terry, “Can Functional-Status Surveys Improve Your Care?” Medical Economics, 73, no. 14 (1996): 12644; A.M. Epstein, “Rolling Down the Runway: The Challenges Ahead for Quality Report Cards,” ]AMA, 279 (1998): 1691-96; T. Bodenheimer, “The American Health Care System: The Movement for Improved Quality in Health Care,” N.Engl. ]. Med., 340 (1999):488-492; L.W Keister, “With Health Costs Finally Moderating, Employers’ Focus Turns to Quality,” Managed Care, October 1995; 4(10):20-24. 37. A.E. Stuck, et al., ‘A Trial of Annual In-Home Comprehensive Geriatric Assessments for Elderly People Living in the Community,” N. Engl. 1. Med., 333 (1995): 1184-89; M.W Rich, et al., “A Multidisciplinary intervention to Prevent the Readmission of Elderly Patients with Congestive Heart Failure,” N. Eng1.J.Med., 33 (1995): 1190-95; E.W Campion, “New Hope for Home Care?” N. Engl. 1. Med., 333 (1995): 1213-14; F. Clark, et al., “OccupationalTherapy for Independent-LivingOlder Adults: A Randomized Controlled Trial,” ]AMA, 278 (1997): 1321-26 38. R. Winslow, “Big Study Shows Workers Under Stress Likely to Have Higher Health-Care Costs,” Wall Street ]oumal, October 16, 1998, at B-5. 39. J. Coulehan, et al., “Treating Depressed Primary Care Patients Improves Their Physical, Mental, and Social Functioning,” Archives of Internal Medicine, 157 (1997): 11 13-1120; F. Clark, et al., “OccupationalTherapy for Independent-LivingOlder Adults: A Randomized Controlled Trial,” J M278 ,(1997): 1321-26. 40. D.J. Lipson and J.M. De Sa, “Impact of Purchasing Strategies on Local Health Care Systems,” Health Affairs, 15, no. 2 (1996): 62-76, at 75; R.H. Miller, “Competition in the Health System: Good News and Bad News,” Health Affairs, 15, no. 2 (1996): 107-120. 41. Many HMOs now participate in national quality evaluations called “HEDIS” (Healthplan Employer Data Information Set) that require the HMO to conduct annual reviews to ensure quality of care along a number of parameters such as immunizations, mammography, and the like. C.J. McDonald, “Quality Measures and Electronic Medical Systems,” ]AMA, 282 (1999): 1181-82; A.M. Epstein, “Rolling Down the Runway: The Challenges Ahead for Quality Report Cards,”]AMA, 279 (1998):169196; T. Bodenheimer, “The American Health Care System: The Movement for Improved Quality in Health Care,” N. Engl. 1. Med., 340 (1999):488-492; R.K. Spoeri and Ullman R, “Measuring and Reporting Managed Care Performance: Lessons Learned and New Initiatives,” Annals o f Internal Medicine, 127 (1997): 726-32. 42. Bone marrow transplant for breast cancer provides an important example. Over the course of a decade in which health plans were increasingly forced to cover bone marrow transplant for breast cancer, the treatment has been provided to over 30,000

women at a cost of $3 Billion. Associated Press. “Breast Cancer Procedure Bogus,” Memphis CommercialAppeal, March 11,2000, A-5. However, recent studies conclude it is no better than conventional chemotherapy. Of five studies released in 1999, four indicated that high-dose chemotherapy with bone marrow transplant was no better for breast cancer than conventional chemotherapy A fifth study, done in South Africa, suggested some benefit. However, several months later, as scientists looked at this study more closely in an effort to replicate its results, the principal investigator admitted to having falsified some of the data “out of a foolish desire to make the presentation more acceptable” to the scientific meeting sponsored by the American Society of Clinical Oncology. R.B. Weiss, er al., “High-Dose Chemotherapy for High-Risk Primary Breast Cancer: An On-Site Review of the Bezwoda Study,” Lancet, 355 (2000): 999-1003, at 1003. See also K.H. Antman, D.F. Heijan and G.N. Hortobagyi, “High-Dose Chemotherapy for Breast Cancer,” ]AMA, 282 (1999): 1701-1703; WJ. Gradishar, “High-Dose Chemotherapy and Breast Cancer,” JAMA, 282 (1999): 1378-80; E A. Rowlings, et al., “Factors Correlated with Progression-Free Survival After High-Dose Chemotherapy and Hematopoietic Stem Cell Transplantation for Metastatic Breast Cancer,” ]AMA, 282 (1999): 1335-43; R. Horton, “After Bezwoda,” Lancet, 355 (2000): 942-43; J. Bergh, “Where Next with Stern-Cell-Supported High-Dose Therapy for Breast Cancer?” Lancet, 355 (2000): 944-45. Another study completed even more recently came to the same conclusion, namely, that bone marrow transplant offers no advantage over conventional chemotherapy See E.A. Stadtmauer, et al., “Conventional-Dose Chemotherapy Compared with HighDose Chemotherapy Plus Autologous Hematopoietic Stem-Cell Transplantation for Metastatic Breast Cancer,” N. Engl. 1. Med., 342 (2000): 1069-1076; M.E. Lippman, “High-Dose Chemotherapy Plus Autologous Bone Marrow Transplantation for Metastatic Breast Cancer,” N. Engl. 1. Med., 342 (2000): l 119-1120. See also E.E Steinberg, S. Tunis and D. Shapiro, “Insurance Coverage for Experimental Technologies,” Health Affairs, 14, no. 4 (1995): 143-58; ECRI, “High-Dose Chemotherapy with Autologous Bone Marrow Transplantation and/or Blood Cell Transplantation for the Treatment of Metastatic Breast Cancer,” Healthy Technology Assessment Information Service: Executive Briefings, February (1995); Peters and Rogers, supra note 35; United States General Accounting Office, “Health Insurance: Coverage of Autologous Bone Marrow Transplantation for Breast Cancer,” Report to the Honorable Ron Wden,U.S. Senate (1996):April: 125. 43. D.M. Eddy, “Benefit Language: Criteria That Will Improve Quality While Reducing Costs,” ]AMA, 275 (1996): 650657; L.A. Bergthold, “Medical Necessity: Do We Need It?,” Health Affairs, 14, no. 4 (1995): 180-90; ED. Jacobson, et al., “Defining and Implementing Medical Necessity in Washington State and Oregon,” Inquiry, 34 (1997): 143-54; WK. Mariner, “Patients’ Rights After Health Care Reform: Who Decides What Is Medically Necessary?,” AmericanJournal of Public Health, 84 (1994): 1515-20; PA. Glassman, et al., “The Role of Medical Necessity and Cost-Effectivenessin Making Medical Decisions,” Annuls of I n t m l Medicine, 126 (1997): 152-156. 44. G. Aston, “No Consensus On Medical Necessity,”Amm’can Medical News, May 10,1999, p. 28. 45. Some of the historical discussion in the following four paragraphs is adapted from E.H. Morreim, “Playing Doctor: Corporate Medical Practice and Medical Malpractice,” Michigan JOUYW~ O f Law Refom, 32 (1999): 939-1040. 46. This historical overview is based largely on G.F. Ander-

155

Volume 28:2, Summer 2000 cal Decisions,” Wall Street]oumal, February 18, 1999, at A-24. 55. WM. Glazer, “Psychiatry and Medical Necessity,” Psychiatric Annuls, 22 (1992): 362-366, at 362. 56. E.E Steinberg, S. Tunis and D. Shapiro, “Insurance Coverage for Experimental Technologies,” Health Affairs, 14, no. 4 (1995): 143-58, at 144-45; IRK. Mariner, “Patients’ Rights Atter Health Care Reform: Who Decides What is Medically Necessary?,”Arnm’canJournal of Public Health, 84 (1994): 1515-20, at 1516-17. 57. M. Pretzer, “Hate Those Medicare Denials? Try Moving,“ Medical Economics, 72, no. 7 (1995): 92-101, at 92-93. Data showed that for every 1000 services allowed: *for office visit: Blue Shield of Northern California denied 12.1, whde Wisconsin Physicians’ Service denied 109.7 *for real-time echocardiography BCBS of Illinois denied zero, while BS of Calif denied 2.2, while Transamerica Occidental denied 198.5 *for myocardial perfusion imaging: BCBS of I11 and Wisc Physicians’ Service denied zero, while Transamerica Occidental denied 252.3 *for ambulance with basic life support: BS of Calif denied 1.5, BCBS of So. Carolina denied 1.5, while Connecticut General denied 413.2. (Pretzer at 93.) See also S.C. Gleason, “Health System Deregulation: Some Aspects of Health Care System Reform Need Not Be Held Hostage,”JAMA, 274 (1995):1483-86, at 1483; WK. Mariner, “Business vs. Medical Ethics: Conflicting Standardsfor Managed Care,” loumal of Law, Medicine and Ethics, 23 (1995):236-246. 58. Burnum, supra note 10; Wong and Lincoln, supra note 10; Hardison, supra note 10; Mold and Stein, supra note 10. 59. Eddy, supru note 43, at 654-55; R.D. Truog, AS. Brett and J. Frader, “ The Problem with Futility,” N. Engl. J. Med., 326 (1992): 1560-1564. 60. Havighurst, supra note 46. 61. Studies have found that, depending on the type and size of corporation, somewhere between 56% and 85% of the costs of health care are directly shifted back to workers through reduced wages. Another study found that, with respect to states’ assorted mandates for health plans cover various specified services, from 59%to 90% of the costs of these mandates are translated into wage reductions. L.J. Blumberg, “Who Pays for Employer-Sponsored Health Insurance?,” Health Affairs, 18, no. 6 (1999): 58-61, at 58. 62. Report to the Board of Trustees, AMA, “Direct Contracting with Employers: A Strategy to Increase Physician Involvement in the Current Health Care Market,” Board of Tustees Report, 27-A-95, at p. 1. 63. Corcoran v. United Healthcare, Inc., 965 F2d 1321 (5th Cir 1992), cert denied 113 SCt 812 (1992); Morreim, supra note 45. 64. For further discussion, see Morreim, supra note 45. 65. E.H. Morreim, “Medicine Meets Resource Limits: Restructuring the Legal Standard of Care,” University of Pittsburgh Law foumal, 59 (1997): 1-95 (hereinafter, “Medicine Meets”); Morreim, supra note 45; Van Vactor u. Blue Cross Assh, 365 N.E. 2d 638 (Ill. 1977); McLaughlin u. Connecticut General Life Ins. Co., 565 F. Supp. 434 (Caiif.1983); Ex Parte Blue Cross-Blue ShieldofAla., 401 So.2d 783 (Ala. 1981); Haggard u. Blue CrossBlue Shield of Nu., 401 So.2d 781 (Ala. App. 1980); Group Hospitalization, Inc. u. Leuin, 305 A.2d 248 (D.C.App. 1973); Hughes u. Blue Cross of Northern Calif;, 245 Cal. Rptr, 273 (Cal. App. 1 Dist. 1988); McGraw u. Pru&ntial Ins. Co. of America, 137 F.3d 1253 (10th Cir. 1998). 66. Morreim, “Medicine Meets,” supra note 65.

son, M.A. Hall and E.E Steinberg, ”Medical Technology Assessment and Practice Guidelines: Their Day In Court,” American ]oumal of Public Health, 83 (1993): 1635-1639; M.A. Hall and G.F. Anderson, “Health Insurers’ Assessment of Medical Necessity,” Uniuersity of Pennsylvania Law Reuiew, 140 (1992): 16371712; C.C. Havighurst, “Health Care Choices: Private Contracts as Instruments of Health Reform. (Washington, D.C.: The AEI Press, 1995). 47. See, for example, Van Vactor u. Blue Cross Ass’n, 365 N.E. 2d 638 (Ill. 1977); McLaughlin u. Connecticut General Life Ins. Co., 565 F. Supp. 434 (Calif.1983); Ex Parte Blue Cross-Blue Shield ofAla., 401 So.2d 783 (Ma. 1981); Haggard v. Blue CrossBlue Shield ofAla., 401 So.2d 781 (Ala. App. 1980); Group Hospitalization, Inc. u. Leuin, 305 A.2d 248 (D.C.App. 1973); Hughes u. Blue Cross of Northern Calif;,245 Cal. Rptr. 273 (Cal. App. 1 Dist. 1988); McGraw u. Prudentiul Ins. Co. o f h m k a , 137 F.3d 1253 (10th Cir. 1998). 48. See supra note 11. 49. Anderson, Hall and Steinberg, supra note 46; Hall and Anderson, supra note 46; Havighurst, supra note 46. 50. E.B. Hirshfeld and G.H. Harris, “Medical Necessity Determinations: The Need for a New Legal Structure,” Health Matrix, 6, no. 3 (1996):3-52; S. Rosenbaum, et al., “Who Should Determine When Health Care Is Medically Necessary?,”N. Engl. 1.Med., 340 (1999):229-232; Bergthold, supra note 43, at 182; KK. Mariner, “Patients’ Rights After Health Care Reform: Who Decides What Is Medically Necessary?,”M c a n f o u m a l of Public Health, 84 (1994):1515-20; Eddy, supra note 43, at 652; Anderson, Hall and Steinberg, supra note 46, at 1636-37; Hall and Anderson, supra note 46, at 1644-57; 51. As noted by Hirshfeld: “When a health plan agrees to cover health care services, the contract with the beneficiary generally specifies that the services must be paid for when they are reasonable and necessary for the diagnosis or treatment of an illness or injury suffered by the beneficiary.” Hirshfeld and Harris, supra note 50, at 4. 52. In some cases such listed services include procedures traditionally done by specialists, including dermatologic procedures such as s hbiopsies, casting of undisplaced fractures,colposcopies, sigmoidoscopy, joint aspiration and injections, stress tests, and the like. K. Terry, “Surprise! Capitation Can Be A Boon,” Medical Economics, 73, no. 7 (1996): 126-138; K. Cheney, “What You Can Learn From An M.D. Mutiny in a Managed-Care Plan,” Money, December 1995, p. 21; J. Novak, “How We Wrote Our Own Managed-Care Success Story,” Medical Economics, 75, no. 15 (1998): 116-27; “How Do Non-Physician Providers Function in HMOs?,” HMO Practice, 8, no. 4 (1994): 151-56. 53. “Ultimately, medical necessity can be thought of as a continuum, whereby services at one end of the continuum are clearly necessary for the diagnosis and treatment of an illness or injury, and services at the other end of the continuum are clearly unnecessary, and in between are services that have some degree of likelihood of benefiting a patient. As one moves along the continuum from clearly necessary to clearly unnecessary, the percentage of likelihood of a benefit from the provision of the health care involved decreases. The value judgment that must be made is how large the percentage of likelihood of a benefit should be for care to be provided. The closer that percentage is to 100%,the more likely it is that some individuals will be harmed by the withholding of care that could have benefited them.” E.B. Hirshfeld and G.H. Harris, “Medical Necessity Determinations: The Need for a New Legal Structure,” Health Matrix, 6, no. 3 (1996):3-52, at 24-25. See also Rosenbaum, et al., supra note 50. 54. L. McGinley, “HMO Fracas Moves to Who Makes Medi-

156

Tbe]ournal of Law, Medicine

67. Morreim, supra note 35; Luyola Universityo f Chicago u. Humana lns. Co., 996 F.2d 895 (7th Cir 1993); Fuia v. Benefit %t Life Ins. Co., 18 E3d 1405 (7th Cir. 1994); Free u. Travelers Ins. Co., 551 ESupp. 554,560 (D.Md. 1982); M c L q u. Blue CrosslBlue Shield of Oregon, Inc., 825 ESupp. 1064, 1071 (N.D. Ga. 1993); McGee v. Equicor-Equitable HCA Corp., 953 F.2d 1192 (10th Cir. 1992); Nazizy v. Miller, 949 E2d 1323, 1336 (3rd Cir. 1991); Harris v. Mutual of Omaha Companies, 992 F.2d 706,713 (7th Cir. 1993); Gee v. Utah State Retirement Bd, 842 E2d 919, 920-21 (Utah App. 1992); Arrington u. Group Hospitalization & Med. Sew., 806 ESupp. 287, 290 (D.D.C. 1992); Barnett v. Kaiser Foundation Health Plan, lnc., 32 E3d 413 (9th Cir., 1994); Nesseim v. Mail Handlers Ben. Plan, 995 F.2d 804 (8th Cir., 1993); Farley v. Benefit T w t Life Ins. Co., 979 E2d 653 (8th Cir. 1992); Ham‘sv. Blue Cross Blue Shield of Missouri, 995 F.2d 877 (8th Cir. 1993); McLeroy u. Blue Cross/ Blue Shield of Oregon, Inc., 825 ESupp. 1064 (N.D. Ga. 1993); Thomas u. Gulf Health Plan, Inc., 688 F. Supp. 590 (S.D. Ala. 1988); Doe v. Group Hospitalization &Medical Services, 3 E3d 80 (4th Cir. 1993). 68. Morreim, supra note 45. 69. “Leveling up would require such a staggering commitment of resources that other public priorities would unduly suffer; leveling down would promote gross inefficiency, lower quality, achieve a dubious sort of equity in which waiting time would be the main resource allocator, and threaten fundamental precepts of freedom by barring individual expenditures for health above some arbitrary limit set by government.” Blumstein and Sloan, “Redefining Government’s Role in Health Care: Is a Dose of Competition What the Doctor Should Order?,” Vunde~6iltLaw Review, 34 (1981): 849,865. 70. Admittedly, one barrier to exposure of such guidelines is the fact that some of them are proprietary, and require the plans that purchase them not to disclose their contents. If open, guidelines-based contracting is to become the norm, some resolutionperhaps a broad-based buy-out-must be found for this problem. See, for example, Rosenbaum, Frankford, Moore and Borzi, supra note 50, at 231. 71. Morreim, supra note 45; Morreim, “Medicine Meets,” supra note 65; E. H. Morreim, “Diverse and Perverse Incentives in Managed Care: Bringing the Patient into Alignment,” Wdener Law Symposium, 1 (1995):89-139 (hereinafter, “Diverse”); E.H. Morreim, “Saving Lives, Spending Money: Shepherdingthe Role of Technology,” J. Bono and S. Wear, eds., Ethics and Values in Health Care and Medicine on the Frontiers of the Twenty-First Century, Philosophy and Medicine Series; (Dordrecht: Kluwer Academic Publishers, 2000):63-110 (hereinafter, “Saving Lives”); Havighurst, supra note 46; N. Daniels and J.E. Sabin, “Limits to Health Care: Fair Procedures, Democratic Deliberation, and the Legitimacy Problem for Insurers,” Philosophy and Public Affairs, 26 (1997):303-50; Eddy, supa note 43; Bergthold, supra note 43. 72. Morreim, “Medicine Meets,” supra note 65; Morreim, “Diverse,” supra note 71; Morreim, supra note 35; Morreim, supra note 45; Morreim, “Saving Lives,” supra note 71. 73. Havighurst, supra note 46, at 183 ff.; Morreim, “Medicine Meets,” supra note 65; Morreim, “Saving Lives,” supa note 71. 74. Morreim, “Saving Lives,” supra note 71. 75. “Most health insurers and managed care plans rely on ad hoc opinion by experts; only in a few instances are there HTA [health technology assessment] programs or structured processes for coverage decision malung.” S. Perry and M. Thamer, “Medical Innovation and the Critical Role of Health Technology Assess-

6 Ethics

ment,”]AMA, 282 (1999): 1869-1872, at 1870. As several commentators recently observed, “materialssuch as the practice guidelines prepared by Milliman and Robertson, a well-known actuarial firm, often rely on insurers’ own decisions rather than on well-designedscientificresearch.” Rosenbaum, Frankford, Moore and Boni, supa note 50, at 23 1 (citing: M&R: Healthcare management guidelines. New York: Milliman and Robertson, 19961998). Even when subscribers do not take the opportunity to study the plan’s details-r don’t understand them when they do try to study them-the “sunshine” of openness introduces a measure of accountability that health plans would be hard-pressed to evade. 76. D.C. Hadorn, “The Problem of Discrimination in Health Care Priority Setting,”]AMA, 268 (1992): 1454-1459, at 1454. 77. N. Daniels, ]ust Health Care (Cambridge: Cambridge University Press, 1985). 78. A. Jonsen, “Bentham in a Box: Technology Assessment and Health Care Allocation,” Law, Medicine and Health Care, 14 (1986): 172-174; D.C. Hadorn, “Setting Health Care Priorities in Oregon: Cost-EffectivenessMeets the Rule of Rescue,”]AMA, 265 (1991):2218-25; E.H. Morreim, “Of Rescue and Responsibility: Learning to Live with Limits,” ]ournu1 of Medicine and Philosophy, 19 (1994): 455-470. 79. Though controversial, and perhaps not duplicable on a national level, the state of Oregon has attempted just such a prioritization with considerable success. T.Bodenheimer, “The Oregon Health Plan-Lessons for the Nation,” First of two parts. N. Engl. /. Med., 337 (1997): 651-55; T.Bodenheimer, “The Oregon Health Plan-Lessons for the Nation,” Second of two parts. N. Engl.]. Med., 337 (1997): 720-723. 80. Morreim, “Medicine Meets,” supra note 65; Morreim, “Diverse,” supra note 71; Morreim, supra note 35; Morreim, supra note 45; Morreim, “Saving Lives,” supra note 71. 81. R.J. Blendon, M. Brodie and J. Benson, ”What Should be Done Now that National Health System Reform is Dead?,” JAMA, 273 (1995): 243-44; American College of Physicians, “Voluntary Purchasing Pools: A Market Model for Improving Access, Quality, and Cost in Health Care,” Annals of Internal Medicine, 124 (1996): 845-53; RA. Berenson, “Beyond Competition,” HeulthA1y;zirs,16, no. 2 (1997): 171-80; L. Etheredge, S.B. Jones and L. Lewin, “What is Driving Health System Change?,” Health Affairs, 15, no. 4 (1996): 93-104. 82. S.M. Butler and R.E. Moffit, “The FEHBP as a Model for a New Medicare Program,” Health Affairs, 14, no. 4 (1995): 47-61. 83. American College of Physicians, “Voluntary Purchasing Pools: A Market Model for Improving Access, Quality, and Cost in Health Care,” Annals of l n t m l Medicine, 124 (1996): 845853 ; H.H. Schauffler and T. Rodriquez, “Exercising Purchasing Power for Preventive Care,” Health Affairs, 15, no. 1 (1996):7385; J.C. Robinson, “Health Care and Purchasing and Market Changes in California,” Health Affairs, Winter, (1995): 117130; J.K. Iglehart, “The Struggle to Reform Medicare,” N. Engl. 1.Med., 334 (1996): 1071-75; H.S. Luft, “Moddying Managed Competition to Address Cost and Quality,” Health Affairs, 15, no. 1 (1995): 23-38; L. Etheredge, S.B. Jones and L. Lewin, “What is Driving Health System Change?,” Health Affairs, 15, no. 4 (1996): 93-104 Choice among plans does not require a vast smorgasbord of variety, with endless combinations and permutations of benefits. A handful of basic plan options might enhance choice far better, especially where individuals have some measure of freedom to make choices within plans. J.H. Hibbard, et al., “Choosing a Health Plan: Do Large Employers Use the Data?” Health Affairs,

157

Volume 28:2, Summer 2000 Third, administrativecomplexities won’t permit all the choices people might want. Reply: as suggested just above, human autonomy is often better enhanced by a limited range of real choices than by an endless array of minutae. A few basic plan-types would be far easier for patients to learn about and choose among, than an endless variety of guidelines and lists. In any case, a reasonable range of options is better than the few-to-none seen in most health plans. And there is no requirement that plans spring forth instantly with a wide array of choices. They can begin modestly and add new options, one by one, as they become feasible. 86. R. Winslow, “Co-Payments Rise for Prescriptions,” Wall Street]oumal, January 12, 1999, at B-1, B-4. 87. K. Davis, K.S. Collins, C. Schoen and C. Morris, “ Choice Matters: Enrollees’ Views of Their Health Plans,” Health Affairs, 14, no. 2 (1995): 99-112; R. Ullman, et al., “Satisfaction and Choice: AView from the Plans,” HealthAffairs, 16, no. 3 (1997):

16, no. 6 (1997): 172-80, at 176; M.G. Farrell, “ERISA Preemption and Regulation of Managed Health Care: The Case for Managed Federalism,” American Journal of Law and Medicine, 23 (1997): 251-89, at 287; Morreim, “Saving Lives,”supra note 71. 84. Morreim, Diverse, supra note 71. 85. Without entering into debates that are already addressed elsewhere, three potential drawbacks can be quickly addressed. First, people can make choices they later regret. Reply: so long as every plan must meet basic needs, no one’s choice can go too badly wrong. And making one’s own mistakes is not necessarily worse than what happens now: health plans making all sorts of bad choices for people, without their knowledge or consent, then pocketing the savings. Second, it is possible, even likely, that some employers will buy the leanest plan and then expect employees to pay for better. Reply: this is precisely what already happens, as many firms downshift health benefits. Although some employers might be criticized for reducing coverage, others have done so out of economic necessity. In either case, arguably the greater problem is that the reduction is hidden as plans continue to promise all “necessary” care while delivering much less than before. In the alternative outlined here, a reasonable minimum of basic care, combined with explicit coverage policies, enhanced choice, and a sharing of money saved, would at least let patients make informed decisions, while giving plans a much greater incentive to provide reasonable benefit levels and upgrade opportunities.

209-17. 88. E. Szabo, H. Moody, T. Hamilton and et al., “Choice of Treatment Improves Quality of Life: A Study on Patients Undergoing Dialysis,” Archives of InternulMedicine, 157 (1997): 1352-

1356. 89. See Section IV-B-1, above. As noted there, even choices among antibiotics to treat a life-threatening infection challenge the black/white notion of “necessary,” e.g., as one drug may have a slightly greater chance of success, but at the price of riskier sideeffects and high financial cost.

158