What effect will the patients' bill of rights, moving toward becoming law this fall, have on patients' pocketbooks, medical costs in general and the vast health-care industry?
It will raise costs of health insurance and employer health plans--and ultimately force individual employees to directly pay more of the cost of their health insurance and medical care.
That's the reality, say economists, physicians, investment analysts, hospital administrators and executives of health-care companies.
The patients' bill of rights, ensuring patients the right to sue health maintenance organizations and to choose treatment by specialists, arrives at a time medical costs are rising sharply again.
Expenditures on doctors, hospitals, prescription drugs and health insurance are going up 8.6% this year, according to federal government estimates. By many private estimates, costs are going up by as much as 15% a year, particularly for drugs.
The right to sue HMOs for bad decisions on care means medical insurance companies will face liabilities for malpractice similar to those doctors and hospitals always have faced.
It will "add 5% to 10% to health insurance premiums, or $350 to $700 a year to the average health plan," says Kenneth Abramowitz, health industry analyst at Carlyle Group, a private equity investment firm in New York.
Employers may well pass those costs along to employees in the form of higher co-payments for insurance, says Mark Hyde, chief executive of Lifeguard Co., a not-for-profit health maintenance organization based in San Jose. "That could be good news," Hyde adds. "Perhaps by legislative change, we are moving toward a model in which consumers take more direct interest in the costs of their health care."
Beyond the political rhetoric, the real story in the patients' rights legislation is that it marks another stage in the evolution of medicine in America, a tremendously complex arrangement of treatments and remedies on which $1.4 trillion will be spent this year, 13.4% of all the goods and services in the U.S. economy.
Medicine is a growing industry. Within five years, the government estimates, medical expenditures will total 15% of the gross domestic product, and by 2010, $1 in every $6 spent in America will be for health care.
It is a changing business. As public opinion, and government regulation, of health care has shifted in recent years, some HMO and hospital companies have gained the favor of Wall Street.
