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March 3, 1999

Going Hollywood With Patient Rights in Managed Care

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JAMA. 1999;281(9):861. doi:10.1001/jama.281.9.861-JMS0303-6-1

The backlash against managed care has entered Hollywood. In the movie As Good As It Gets, audiences applaud when actress Helen Hunt uses obscenities to describe the health maintenance organization that treated her son. Moviegoers also cheer actor Warren Beatty, the suddenly truthful Senator in Bullworth, who accuses the health insurance industry of profiteering, deliberately excluding the poor, and corrupting politicians. When Hollywood distributes celluloid attacks on an entire industry, it relies on widespread public sympathy with the sentiments expressed.

The backlash against managed care has also reached Congress and state legislatures. Hundreds of bills to regulate managed care practices have been considered.1 Many of these are called a "patient bill of rights"; however, the label may prove to be as fictional as a Hollywood movie plot. Most bills focus on consumer protection and not patient rights—the differences between which are important.2 Consumer rights focus on purchasing decisions before a provider relationship is formed. They are necessary to help people choose a health plan, but they are not sufficient to protect patients when they need medical care. Patient rights focus on the relationship between patients and physicians (and other providers) and the type and quality of care provided.3 If patient rights are conflated with consumer rights, consumer protection legislation may unwittingly undermine important patient rights that remain necessary in or out of managed care.

Managed care engages in activities that require attention to both consumer and patient rights.2 As a business that sells health insurance and finances care, managed care should be subject to reasonable consumer protection laws. As an entity that manages and delivers health care, managed care should also be subject to laws that protect patient rights.

Arguably, consumer rights end, and patient rights begin, when the insurance contract is signed. The reality is somewhat more complex. In an ongoing relationship, contractual provisions agreed to by consumers can affect the type and quality of care provided to patients. Moreover, consumer and patient rights can conflict. For example, suppose that a patient refuses a recommended amputation to stop a gangrenous infection, as all patients have the right to do, and therefore requires a lengthy hospitalization, not covered by the health plan contract. Contractual limits on benefits should not override a patient's existing common law right to refuse treatment. However, benefits are typically viewed as consumer contract issues, and consumers do not have contractual rights to treatment that the contract excludes. Thus, contractual limits may force individuals to forfeit their rights as patients in order to obtain consumer benefits.

Consumers become patients when they use health services, and they may be at risk of physical disability or death—not merely financial loss—if managed care plans fail to provide adequate services. Thus, it is reasonable to expect that minimum standards of quality be imposed on managed care plans or "products" in the same way that minimum product safety standards are imposed on other consumer products like automobiles. Most fundamentally, health plans must be directly accountable to patients for their actions.

State licensure laws prescribe standards for some of these matters: financial solvency, management capabilities, the format of contracts, methods of disclosing information, reporting requirements, marketing methods, and grievance procedures. However, many state requirements cannot be enforced against self-funded employee group benefit plans governed by the federal Employee Retirement Income Security Act (ERISA).4 Proposals for protecting consumers have largely avoided regulating the substance of health plans and have allowed health plans the autonomy to determine product offerings. They only require that information be disclosed to allow consumers to choose among the various options.5 But individual consumers cannot negotiate all of the provisions in a standard contract with insurers; in fact, individuals rarely see the contract before they have enrolled and paid the first premium. While standard form contracts are efficient, their use means that individual consumer choice—even where it does exist—cannot function as an effective mechanism to ensure that health plans offer what consumers need as patients.

It is precisely in these circumstances that regulation is appropriate to protect the rights of patients. Regulation limited to consumer protection is not sufficient to protect patient rights.2 Just as patients are not entitled to whatever they may want, regardless of need or effectiveness, so too health plans should not be permitted to create obstacles to the exercise of legitimate patient rights.

The patients' rights legislation introduced in 1998 is a step in the right direction for consumers, but it fails to include all the rights of patients. Patient rights must be protected in any new consumer protection law. Otherwise, like the happy endings of Hollywood movies, a consumer bill of rights may give people the false impression that their rights as patients are protected when they are not.

Kuttner  R Must good HMOs go bad? the search for checks and balances. N Engl J Med. 1998;3381635- 1639Article
Mariner  WK Standards of care and standard form contracts: distinguishing patient rights and consumer rights in managed care. J Contemp Law Policy. 1998;151- 55
Annas  GJ A national bill of patients' rights. N Engl J Med. 1998;338695- 699Article
Mariner  WK State regulation of managed care and ERISA. N Engl J Med. 1996;3351986- 1990Article
Rodwin  MA Consumer protection and managed care: issues, reform proposals, and trade-offs. Houston Law Rev. 1996;321319- 1391