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Red Flags on Medical Cost

April 19, 2002

Any comedian can wring out empathetic laughs with an HMO horror story. Any politician can bring a tear with tales of managed-care mismanagement. It's hard to resist wanting to punish HMOs, to try to force them to give better care. That doesn't mean it's the right thing to do, since one of the aims of managed care has always been to dampen spiraling medical costs.

Consider the raft of health coverage bills--18 of them--now pending in the California Legislature. Some of the proposals are being peddled by lobbyists. One, mandating coverage of hearing aids, comes from a group funded in part by hearing aid manufacturers. Other bills come from legislators who may simply be trying to ensure that all Californians get medically necessary care.

None of the bills, however, have been subjected to any serious scrutiny of cost, in a state where employers are already reeling from record health insurance premium increases and whose government is facing a deficit of $8 billion to $12 billion.

The Legislature has already seen the problem with the welter of costly bills, which would among other things remove cost caps on infertility treatments, require coverage of acupuncture and deny doctors the right to withhold futile or ineffective treatments.

Assembly Health Committee Chairwoman Helen Thomson (D-Davis) has suggested that legislators put the bills on hold and form a state health-cost commission. It would be modeled after a successful commission in Pennsylvania, which conducts a cost-benefit analysis on proposed health coverage mandates. The Pennsylvania group includes consumer advocates, medical professionals and labor and business representatives.

The measures before the Legislature would not directly burden the state, but they would drive up the already soaring health insurance costs paid by CalPERS, the pension group that buys health insurance coverage for state workers. CalPERS announced this week that it would increase health-care premiums by a whopping 25% next year, with no relief in sight. And that's without the proposed mandates. In the private sector, higher premium costs may lead some employers to drop insurance and throw more people into government programs and government-subsidized emergency care.

Consider, for example, the costs of AB 1826, a bill by Assemblywoman Carole Migden (D-San Francisco) to require health plans to provide infertility coverage ''without lifetime caps or other restrictions.'' In vitro fertilization costs about $8,000 a cycle. There are better and milder proposals in the batch of 18, but they need sorting out before they come to another vote.

State and federal regulators, by deciding which treatments Medicaid and Medicare will cover, play a vital role in ensuring that patients get essential care. This editorial page has urged Washington to let state regulators, not managed-care plans, administer Congress' proposed drug benefit. That doesn't mean that government, especially state legislators, should regulate one treatment at a time.

Most of the bills now pending in Sacramento cross a line, going beyond legitimate oversight and into political micromanagement. That's a bad prescription for any state.

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