LEGISLATION ON MANAGED HEALTH CARE FULL OF POTENTIAL PITFALLS

A massive bill regulating managed health care has won overwhelming approval in the Missouri House and is in the Senate awaiting further action. The 117-page measure is the fruit of a special interim committee that spent much of last year taking testimony around the state. Proponents claim their purpose is to protect patients in managed care plans. We will be lucky if the proposed legislation, which appears likely to gain Senate passage as well, accomplishes this goal without thoroughly fouling up Missouri's health-care marketplace.

"We cannot allow managed care companies to balance their checkbooks on the backs of consumers," said chief House sponsor Rep. Tim Harlan, D-Columbia, in a turn of phrase of the sort favored by left-wingers. Harlan is one of the most liberal members in the entire 197-member General Assembly. The fact that Harlan has had a major hand in crafting this legislation should give pause to those health care providers who think they see this legislation as their salvation from the tender mercies of the managed care companies. For if Harlan had his way, not only would measures such as this be passed, but the gigantic and oppressive Clinton health care scheme, and a state version as well, would today have our health care delivery system by the throat.

This isn't to say that some regulation may not be in order. All of us have heard horror stories, some real and some exaggerated, about difficulties and inequities in managed care. No defense of every current form of managed care is offered here. A point to keep in mind is that managed care represents the marketplace's move to try to gain control over health care costs that were exploding at double digit rates year after year until recently. These costs threatened the survival and competitiveness of many a business, large and small.

One telling sign is that Harlan has admitted he doesn't know how much managed-care costs will increase if his bill becomes law. Estimates from Associated Industries of Missouri, which is opposed to the bill, are that health-care costs will rise by at least 15 to 20 percent if this bill is passed. AIM president Chris Long says the threat to small businesses may be especially acute. Long says small businesses may have to cease offering coverage altogether if costs rise too much. In fact we know this to be the real effect of similarly restrictive laws and regulations in markets large and small.

The problem in the health care marketplace is third-party payers. Period. The answer is to introduce true market forces and put the consumer back in the driver's seat in determining his own health care decisions. The way to accomplish this is at the federal level, through vastly expanded Medical Savings Accounts, which can be understood as Individual Retirement Accounts for health care. The money builds up in an individual's account tax-free, and whatever isn't used belongs to that person. The individual can also use the proceeds to buy himself a catastrophic health insurance policy to guard against the day we all hope never comes. Recent federal legislation experimenting with Medical Savings Accounts needs to be greatly expanded.

Until then, let's hope our lawmakers don't do too much damage with well-intentioned managed care legislation this year.