Rations through a Tiered System

Vernellia R. Randall
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DOES CLINTON'S HEALTH CARE REFORM PROPOSAL ENSURE [E]QUAL[ITY]  OF HEALTH CARE FOR ETHNIC AMERICANS AND THE POOR?  Vernellia R. Randall, 60 Brooklyn Law Review 167-235 ( 1994).

It is only recently that the need for reform was characterized as a need for universal access. Health care reform was motivated not by the desire or need to provide better access, but by a concern for cost containment. More specifically, they were motivated by problems associated with uncompensated care and the cost of health care to employers and the government. To control costs, individuals, providers or health insurance plans will need to ration care. The Act places the rationing function in the hands of managed care plans owned by private enterprise⁽¹⁹⁹⁾ Private enterprise, however, will not be able to control cost if the majority of Americans do not elect managed care plans. Consequently, universal portable coverage has been offered as the quid pro quo for accepting managed care rationing. Snake oil salesmen are selling managed care with the following pitch:

Your doctor will still be responsible for making decisions about your health care. However, we all know that there is way too much waste in the health care system. This waste raises the cost of care for all of us. The managed care organization will merely look over your doctor's shoulders to assure that the waste stops. Look at what you are going to get in exchange for a little gatekeeping, a little utilization review-universal, portable coverage.

Sadly, the HSA envisions not across-the-board rationing, but the continuation of a tiered health care system with rationing only for some. The reformed health care system will continue to ration health care based on economics⁽²⁰⁰⁾ It will continue to ration health care based on race⁽²⁰¹⁾ It will continue to ration health care based on class⁽²⁰²⁾ Universal portable coverage, by itself, is not 'good' if, in fact, the care received is discriminatory, inadequate, incompetent and inappropriate. The Act contains a number of provisions for federal funding in an attempt to assure care to ethnic Americans, but financial incentives will be inadequate, and as a result, a multi-tier system will continue to exist⁽²⁰³⁾ A. Health Care Plan Tiering

In addition to the coverage difference between cost-sharing policies, the higher cost-sharing fee-for-service option and the combination option will charge higher premiums⁽²⁰⁴⁾ It is assumed that cost-conscious consumers will respond to differences in premiums by not spending their own money to purchase relatively expensive fee-for-service or PPO plans. Many consumers, particularly middle-class consumers, however, will not be satisfied with minimal health benefits. Individuals with significant health problems are likely both to want comprehensive benefits and to stay with their current physicians. Furthermore, many consumers will not be responsive to the premium difference⁽²⁰⁵⁾ But, those who are likely to be the most responsive to premiums are the ethnic Americans and the poor, resulting in a health care ghetto.

Will these plans use their higher premiums to provide different services to their clients? Supporters of the Act argue no. Proponents argue that because all plans are required to provide access to the same basic comprehensive services, these plans will provide more amenities, not more services, i.e., better carpet on the floor, quicker service⁽²⁰⁶⁾ However, proponents fail to realize that these 'amenities' can make a difference in quality of care. For instance, quicker service is vital. Quicker service can make a difference in health status, if quicker service means that a person can see the provider within a day or two and the alternative is a two-week wait for an appointment. Quicker service can make a difference in health care seeking behavior if a person has to wait in a waiting room for 2-3 hours to obtain service rather than 15-20 minutes.

Moreover, higher cost-sharing plans and combination plans will provide more than amenities; they will provide more services. For example, the basic health care benefits allow for a pap smear once every three years. Presumably, individuals with the higher cost-sharing plan could obtain a yearly pap smear. If yearly pap smears diagnose cervical cancer earlier than the basic health care benefits, then women in the higher cost-sharing and combination plans (primarily upper middle- income and European American women) will have better health care than women in the lower cost-sharing plan (largely ethnic American and poor). Furthermore, lower cost-sharing plans will be managed care plans while the higher cost-sharing plans will be fee-for-service plans. Managed care plans ration health care by using physicians as gatekeepers and by using strict utilization criteria⁽²⁰⁷⁾ Fee-for-service plans ration care based on ability to pay⁽²⁰⁸⁾ Notwithstanding the explicit rationing that occurs based on the 'medically necessary⁽²⁰⁹⁾ concept, the plan also provides for implicit rationing based on economics. First, the plan has significant deductibles and co-payments⁽²¹⁰⁾ While health coverage is guaranteed, everyone will pay some out-of-pocket money for co-payments even if they are unemployed, homeless, disabled or poverty stricken⁽²¹¹⁾ And while the HSA provides that failure to pay premiums will not result in loss of coverage⁽²¹²⁾ co- payments take place at the point-of-service. It is unclear whether inability to pay will restrict access at point-of- service⁽²¹³⁾ But even if it does not in theory, it may still serve as a barrier to service. Some individuals who are unable to pay will want to avoid being embarrassed at the point-of-service, while others may want to avoid the civil monetary penalties, which could amount to as much as $5000 for repeated failure to pay⁽²¹⁴⁾ Second, the Act requires each family to pay 80% of the premium⁽²¹⁵⁾ One obvious problem is the potential growth of the insurance premiums. The HSA reduces the rate of growth to the overall level of inflation by capping the growth of the premiums⁽²¹⁶⁾ A cap on expenditures will provide a disproportionate advantage to higher income families because a smaller percentage of their income will be directed toward health care. Furthermore, a premium cap will probably result in rationing by health care plans as a method of maintaining profits. Consequently, higher income individuals and families with more disposable income will be able to buy themselves out of the rationing bind⁽²¹⁷⁾ Families enrolled in Regional Health Alliances are entitled to a premium discount if the family is an AFDC or SSI family, has an adjusted family income below 150 percent of the applicable poverty level, or incurs a family obligation amount exceeding 3.9% of the adjusted family income⁽²¹⁸⁾ But what happens to a family whose income is 151% of poverty? Eligibility for subsidies is rigidly means-tested on an annual basis, and burdened with retroactive penalties and redetermination, including investigation of tax returns. Like Medicaid, the HSA excludes help for many who need a subsidy. Furthermore, federal subsidies are not available for families who choose to register in a corporate alliance. Corporate alliances are required to provide a premium discount to low-wage employees, defined as any full-time employee earning less than $15,000 annually⁽²¹⁹⁾ Consequently, a person earning less than $18,000 but more than $15,000 will be penalized for working; had they enrolled in a regional alliance they would have been eligible for premium discounts. The net result is that health care will be more illusory than real for many working poor⁽²²⁰⁾ The HSA allows the higher cost-sharing (fee-for-service) plans to perform utilization review⁽²²¹⁾ to require prior approval for specified service⁽²²²⁾ and to exclude providers because of poor quality of care⁽²²³⁾ While these provisions provide some aspects of managed care plans, the Act specifically provides that prior approval for specific services shall not be construed as permitting a plan to require prior approval for non-primary health care services through a gatekeeper or other process⁽²²⁴⁾ Thus, the HSA allows a person to 'buy' their way out of 'gatekeeping' rationing. And so, when people pay higher premiums for a higher cost-sharing (fee-for-service) plan, they are actually saying: 'Don't ration my care. Don't use any gatekeeping mechanism that can ration care to me. I want to be able to get whatever I can afford to buy.⁽²²⁵⁾ Consequently, even with utilization review, individuals in higher cost-sharing plans will have greater access. As one commentator has noted:

These plans would entice middle- and upper-income groups to pay more of their after-tax income for more choice of physicians, shorter waits for appointments with primary care physicians and specialists, more conveniently located physicians, hospitals, and pharmacies, and/or broader coverage. Market segmentation would adversely affect people who are unable to afford more than a basic plan. They would find that there are not enough plans with enough capacity willing to participate; they would find few providers willing to serve them; and they would have less access to specialty care and expensive medical technologies⁽²²⁶⁾ Thus, many of the inequities in the current system will continue to exist: individuals will be tiered among health care plans⁽²²⁷⁾ few plans will choose to market aggressively among ethnic Americans and the poor⁽²²⁸⁾ physicians will refuse to join plans that have 'too many' ethnic Americans and poor individuals⁽²²⁹⁾

B. Health Care Service Tiering

Even where physicians and plans accept ethnic American patients, they may discriminate in dispensing medical services. This problem exists in the current system and will be aggravated by the HSA, because the Act places premium limits on health care plans, but does not place limits on the types of managed care that plans can institute to make a profit and provide services⁽²³⁰⁾ Consequently, plans, through utilization review, may find it easier to deny services to ethnic American patients rather than to middle-class European American male patients⁽²³¹⁾ That is, even under the same health care plan, it will be easier to deny services to the less articulate, persons preceived as powerless, etc⁽²³²⁾ Consequently, health care plans may, in fact, provide different services based on race and class. This is particularly true since the adjustment of premiums based on regional trends compared to national trends does not specifically include adjustments based on race and ethnicity⁽²³³⁾ Thus, ethnic Americans who are sicker than European Americans will seek more services. Yet, health care plans may not be compensated adequately for the difference because of the failure to adjust the premium. Granted, the HSA allows for adjustment based on demographic characteristics⁽²³⁴⁾ For instance, it requires age, gender, socioeconomic status and health status to be considered⁽²³⁵⁾ However, socioeconomic status and health status are only partial and inadequate substitutes for race and ethnicity.

Arguably, this problem exists in the current health care delivery system. But the problem with the Act is not just that it retains the problem, it institutionalizes and condones it. Every poor person, every unemployed person, every person who does not have the money to get into the higher cost-sharing or combination plan will be in some form of managed care plan, if not by explicit choice, at least by economic reality⁽²³⁶⁾ Most middle-income Americans will obtain their health insurance through their employment. The Act is designed to economically tempt these individuals to choose a managed care or combination plan. Managed care plans will not only have a lower premium but also require a smaller out-of-pocket cost⁽²³⁷⁾ Given the choice of going to the health care provider of your choice while paying a $3000 deductible and 20% of the cost afterwards (higher cost- sharing/combination plan), or paying no deductible and only $10 per physician visit (managed care), many middle-income persons will have to choose managed care. Although every health care plan will theoretically offer the same comprehensive basic services, they will do so through different organizational structures with different gatekeeping mechanisms and different utilization review standards. Currently many employers offer a traditional fee-for- service plan and a managed care plan as an alternative. The same incentives exist in the HSA. However, the Act goes beyond the existing system. It legally delegates to private enterprise (insurance companies) the rationing of health care in America. Thus, health care plans will ration health care differently, since theoretically in the current system private physicians still make the ultimate decision on medically necessary care.

Insurance companies will ration health care to those services deemed 'medically necessary,' based on standards, guidelines or practice parameters⁽²³⁸⁾ In fact, the Act specially provides that no benefits are available unless the benefit is 'medically necessary or appropriate.⁽²³⁹⁾ While the HSA gives authority to the National Health Board to determine when a specific item or type of service is not medically necessary or appropriate⁽²⁴⁰⁾ it apparently leaves to the health care plan the authority to determine medical necessity on an individual basis⁽²⁴¹⁾ Several issues are presented by limiting health care based on 'medical necessity'. First, because medical necessity is based on utilization review decisions and financial risk-shifting at the insurance level, the patients are not likely to know that their treatment was reduced or a service was denied⁽²⁴²⁾ Second, decisions which find that a service is not 'medically necessary' at best will be based on a concept of utilization review, a 'series of working hypotheses and partial solutions that are continually revised, discarded, and even reinvented as changes occur in medical technology, social values, economic conditions and other circumstances.⁽²⁴³⁾ Third, given that most health care research has been based largely on European American males and that providers are largely European American males, medical care decision- making is culturally biased⁽²⁴⁴⁾ This is particularly troublesome since ethnic Americans suffer from more health problems than middle-class European Americans⁽²⁴⁵⁾ Finally, the most significant problem is the lack of any authoritative guidelines as to what constitutes 'medically necessary.⁽²⁴⁶⁾ Consequently, the decision is left to the whims of insurance companies. This arrangement invites discrimination⁽²⁴⁷⁾ Requiring the plans to rely on qualified physicians does little to protect the individual from the culturally biased vagrancies of utilization review. Plan physicians are not likely to contradict their employer's decision to deny service⁽²⁴⁸⁾ which means that we are institutionalizing a decision-making process that is largely determined by middle-class European American males⁽²⁴⁹⁾ In sum, cost sharing, co-payments, supplementary policies, reliance on volunteerism instead of mandates, temporary 'special programs' and set- asides continue institutionalized elitist health care. Because of barriers and tiering, ethnic Americans and poor communities with the worst health status and most complex health care problems will be penalized as they are forced to pay premiums, co-payments and deductibles that they cannot afford. To be effective, market choice requires the financial means to choose and requires plans to be willing to serve ethnic Americans. Absent these factors, managed competition would limit the choice of low income and ethnic Americans.

C. Health Care Physician Tiering

Even among physicians there will be tiering. Plans must limit the number of physicians who operate in the plan to control costs⁽²⁵⁰⁾ They may limit participation to 'board certified' physicians. Plans with lower premiums will have more restrictive utilization review and gatekeeping mechanisms. Managed care plans must have physicians willing to abide by their utilization review standards and gatekeeping guidelines. As a result, younger, less experienced physicians will begin their careers in the managed care plans, while the older, more experienced physicians will practice in fee-for-service plans, with obvious implications for ethnic Americans and the poor⁽²⁵¹⁾ If quality of care is related to the experience of the providers, then the more costly fee-for-service plans will offer higher quality service because they will be more attractive to the more experienced physicians. Furthermore, even though physicians may participate in more than one plan, physicians may limit the number of patients from the lower cost-sharing plans if those plans pay them less than the higher cost-sharing, fee- for-service plans. Since nothing in the HSA requires that a physician accept any patient from any plan to which the physician belongs, eventually individuals may find that significantly fewer physicians are available in lower cost-sharing plans⁽²⁵²⁾ The lack of adequate protections will inevitably result in limited access for ethnic Americans. As one author has noted, 'It is difficult to imagine how managed competition will not result in a class-based access through a multi-tiered system of benefits and eligibility. Moreover, both insurers and health service groups will find it easiest to 'compete' via favorable selection of healthier groups.⁽²⁵³⁾ In conclusion, although the lowest-cost plans will be the ones that are the least desirable, they are likely to be the only ones affordable to the poor. They may also be the only ones available to serve ethnic American communities. Although all plans would be required to provide a comprehensive benefit package, ethnic Americans enrolled in basic plans may find it difficult to obtain many of the services that are covered by the plan. Because low-cost plans would be unable to match the fees paid by higher-cost plans, many providers will not contract with them. Consequently, ethnic Americans and the poor enrolled in the basic plan will have 'limited-access and sometimes lower- quality⁽²⁵⁴⁾ health care.

 

199. FN199. Randall, supra note 99, at 38-40. 200. FN200. In a society such as ours, which bases the availability of services and goods on the ability to pay, a poor person will have limited access to even an essential service such as health care. Thus, despite having the world's most technologically advanced health care, the United States (like South Africa) does not assure its citizenry universal health care or universal health insurance coverage. See George Lundberg, National Health Care Reform: An Aura of Inevitability is Upon Us, 265 JAMA 2566 (1991). The inability to afford quality health care restricts access both directly-some people cannot afford the services-and indirectly-some people cannot afford the supplemental activities which facilitate accessing the services. Without sufficient insurance or money for services, access is limited. The magnitude of the problem is shocking. For the ethnic American or poor person who has neither health insurance nor sufficient wages to purchase health insurance or afford adequate health care, economic barriers are significant. A person may not be able to afford even a 'small' co-payment. 201. FN201. Economic proposals for improving access are based on the premise that the primary barrier to health care is socioeconomic. These proposals discount race and racism as a barrier to health care. The focus on racial barriers is not intended to imply that all ethnic Americans are affected the same. Ethnic Americans are not a homogeneous group. See Jose E. Becerra et al., Infant Mortality Among Hispanics: A Portrait of Heterogeneity, 265 JAMA 217 (1991); B. Josea Kramer, Health and Aging of Urban American Indians, 157 West. J. Med. 281 (1992). Consequently, when considering racial barriers, along with class and economic barriers, it is important to remember that the barriers will affect individuals within racial groups differently. However, race is a separate and independent barrier that affects not only a person's socioeconomic status, but institutional behavior and provider behavior as well. Randall, supra note 79, at 144-46. The racial barriers to health care are exhibited in barriers to health care facilities, to health care providers and to discriminatory medical treatment. Id. at 146-60. When institutional policies and practices have a discriminatory effect on the access of ethnic Americans to health care and a discriminatory effect on the quality of medical treatment, then racism is the problem. Id. at 160-62. Any attempt to reform the health care system must provide mechanisms to remove racial barriers to health care. Proposals which focus on socioeconomic barriers will certainly improve access, but as universal coverage does does not remove racial barriers, it is inadequate by itself. 202. FN202. See Lundberg, supra note 200, at 2566-67. We live in a class-based society. The structure, organization and kinds of health care services delivered traditionally have focused on the needs of the upper-middle class. Class barriers manifest themselves when the health care system organizes and conducts itself based on certain assumptions about the middle class. For instance, the system assumes that individuals can take off work to obtain care; individuals can obtain transportation necessary to seek care; individuals have access to a telephone to call for appointments for health care or for authorization to seek health care; individuals haveaccess to child care; individuals have 'money' to eat 'right,' sleep eight hours, and clothe themselves adequately; individuals have knowledge about where to seek health care services. Furthermore, clinics that serve the poor tend to have long lines and waiting periods indicating that lower-class individuals' time is less valuable than that of middle-income individuals. Lower-class individuals are likely to find all those assumptions to be barriers to health care services. In one study, 30% reported inadequate child care as a barrier, 25% reported the lack of a telephone as a barrier, and 31% reported not knowing where to go as a barrier. Aved et al., supra note 179, at 495. Transportation problems include the lack of a car, lack of transportation fare, and the long distance required to travel to obtain care. Id. Thus, the quality of health care depends on where the health care provider is located relative to the patient's residence. Ginzberg & Ostow, supra note 158, at 2559. When health care providers are not located in the community, patients normally do not use follow-up care. Davidson, supra note 182, at 154. As one author has noted: Health care is only one of many concerns of (families and individuals) . . . . Providing their families (and themselves) with food, shelter, transportation, day care, and other essential matters requires the investment of substantial financial resources and occupies a good deal of time. If inefficient and understaffed clinics require inordinate amounts of time to provide simple services, individuals understandably may choose to forego certain (health care) services . . . to meet other daily needs . . . . Gary L. Freed et al., 71 Milbank Q. 32, 79 (1993). However, the single most significant class barrier to lower-class individuals in seeking care is locating a provider willing to serve them. Aved et al., supra note 179, at 497; Bardack & Thompson, supra note 181, at 161. In one study, 64% of all women seeking prenatal care reported this as a problem, and 96% of women who tried to obtain care but were unable to reported this as a problem. Aved et al., supra note 179, at 497-99. The reasons for refusing to accept patients included administrative difficulties in obtaining payment from Medicaid and low Medicaid reimbursement rates. Ginzberg & Ostow, supra note 158. It also included prevailing negative attitudes of medical providers toward serving lower class communities. Freed et al., supra, at 79. These attitudes reflected feelings that lower-class patients are difficult to work with, that lower-class patients are unclean, and that lower-class individuals don't care about their health. Id. These attitudes were held by 'respected physicians in some communities and are promulgated through medical societies and informal networks.' Freed et al., supra, at 79. Furthermore, the attitude of physicians is contributed to by the failure of medical schools to train physicians to provide community-based ambulatory care and to educate physicians to the particular health needs of ethnic Americans. Bardack & Thompson, supra note 181. In particular, physicians are not taught to deal 'sensitively and understandingly' with the special problems of ethnic Americans. Id. In the end, class barriers such as these will not be removed by providing universal coverage. 203. FN203. By relying on price competition among providers, the Act segments the market into at least two tiers. One tier would be composed of lower-income individuals and families who, because of economics, must join the least costly plan. The other tier would include everyone else. Rice et al., supra note 61, at 1359. 204. FN204. Cf. HSA s 1423(d)(B) (The price of any cost-sharing policy shall take into account any expected increase in utilization resulting from the purchase of the policy by the individual). 205. FN205. Rice et al., supra note 61, at 1357. There is much uncertainty pertaining to the magnitude of the price elasticity of demand for health insurance, measured as the percentage of change in the amount of insurance purchased divided by the percentage of change in premiums. Id.; see, e.g., M.A. Morrisey, Price Sensitivity in Health Care: Implications for Health Care Policy (1992) (Estimates price elasticity as high as -2.8.); M. Holmer, Tax Policy and the Demand for Health Insurance, 3 J. Health Econ. 203 (1984) (estimates price elasticity of -0.16). 206. FN206. In a private discussion with Lawrence Gostin, he indicated that the economist on the health care taskforce held this view and that it was a view that appeared to be winning the day in the design of the health care system. 207. FN207. Randall, supra note 99, at 27-28. 208. FN208. Id. 209. FN209. Health insurance policies insure against the risks of loss occasioned by sickness or disease. A common provision limits the risk of loss to medical services, equipment or supplies which are 'medically necessary.' Annotation, What Services, Equipment or Supplies are 'Medically Necessary' For Purposes of Coverage under Medical Insurance, 75 A.L.R.4th 763 (1990). If the language employed is unambiguous and clear about who will make that medically necessary decision, then there is no occasion for construction. Sarchett v. Blue Shield of Cal., 729 P.2d 267, (Cal. 1987) (policy unambiguously provided for impartial review of disputes between insurer and physician as to medical necessity of hospitalization for which benefits were claimed, and thus insurer was not precluded from challenging medical necessity of hospitalization recommended by treating physician); Strassberg v. Connecticut Gen. Life Ins. Co., 182 A.D.2d 1055, 1056, 583 N.Y.S.2d 48, 48 (3d Dep't 1992) (health insurer, whose policy provided for coverage of professional nursing services when 'recommended by a Physician and are essential for the necessary care and treatment of * * * a Sickness,' did not reserve to itself the right to make independent determination on questions of medical necessity). When the terms are ambiguous, however, then terms are 'strictly construed against the insurer and in favor of the insured.' Annotation, supra, at 770. 210. FN210. See supra notes 24-32 and accompanying text. 211. FN211. While the plan requires reduction for cost sharing, such reductions are limited to families who are enrolled in Aid for Families with Dependent Children ('AFDC'), Supplemental Security Income ('SSI'), or have an adjusted income below 150 percent of the poverty level. HSA s 1371(a). However, no reduction in cost- sharing shall be available for families if there are sufficient low-cost or combination plans available. Id. Consequently, reduction of cost-sharing is limited to low- income individuals who are enrolled in higher cost plans because of the non-availability of low-cost or combination plans. 212. FN212. Id. s 1344 (in no case shall the failure to pay amounts owed result in an individual's or family's loss of coverage under the Act). 213. FN213. The Act allows for any family collection shortfall to be included in the family's plan premium. Id. s 1342(a)(1)(A). 214. FN214. Id. s 1345(d)(2). 215. FN215. Id. s 6101(a). 216. FN216. Id. s 6001 (outlines the factors to be considered limiting the growth of premiums for the comprehensive benefit package in regional alliance health plans). 217. FN217. Rice et al., supra note 61, at 1359 (citing M. Kolodinsky & T. Arnold, Developing a Sliding Fee Scale for Health Care Insurance in Vermont: The Calculation of Disposable Income (1989) (families below 200% of the poverty line have little or no disposable income available for sliding-scale contributions tohealth insurance premiums)); Holmer, supra note 205 (low-income individuals' price elasticity estimates for health insurance were twice as high for families with incomes between $15,000 and $25,000 and six times higher (-0.39) than for those with incomes of more than $40,000). 218. FN218. HSA s 6104(a)(1), (c)(3). The amount of the premium discount will be equal to 20% of the weighted average premium for the health plans offered by the regional alliance for that family type, reduced (but not below zero) by the sum of the family obligation amount, and the amount of any non-required employer payment towards the family share of premiums. Id. s 6104(b). The discount will be increased if a family is unable to enroll in an at-or-below- average-cost plan, but only to such an amount that will allow the family to enroll in a regional alliance health plan without the need to pay a family share of premium in excess of an at-or-below-average-cost plan. Id. As of 1994 this eligibility for discounts applies to dual parent families with incomes below $22,200; single parent families with incomes below $18,400; childless married couples with incomes below $14,600; and single individuals with incomes below $10,800. The President's Report, supra note 31, at 29. 219. FN219. HSA s 6104(a)(2). 220. FN220. The illusion of services is significant: patient educational provisions are elective under the health plan and accompanied by significant co-payments; mental health services, long-term health care and hospice care are inadequate; home health care services are severely time-limited; prosthetic dental devices, adult dental services, eyeglasses and hearing aids are excluded. Furthermore, virtually all the services have significant cost-sharing provisions. 221. FN221. HSA s 1322(b)(2)(B)(i). 222. FN222. Id. s 1322(b)(2)(B)(ii). 223. FN223. Id. s 1322(b)(2)(B)(iii). 224. FN224. Id. 225. FN225. See Rice et al., supra note 61, at 1359 (suggesting that 'persons with family incomes below 200% of the federal poverty level are unlikely to be able to afford premium surcharges' and that '80 million people-32% of the entire population-will be able to 'choose' only among basic plans'). 226. FN226. Rice et al., supra note 61, at 1359-60. 'Low-income persons are likely to have a difficult time finding plans in which they can enroll because few plans may choose to market themselves at the most affordable basic plan rates.' Id. See M. Merlis, Medicaid Source Book, Congressional Research Service (1993); M.D. Anderson & P.D. Fox, Lessons Learned from Medicaid Managed Care Approaches. 6 Health Aff. 71-86 (1987). 227. FN227. See Rice et al., supra note 61, at 1359-60. 228. FN228. See id. (citing a survey where only 22% of HMOs were participating in the Medicaid program because of low premiums paid by Medicaid, discontinuous Medicaid eligibility of enrollees and marketing problems). 229. FN229. See Peggy McNamara, Patchwork Access: Primary Care in Eds on the Rise, 67 Hosp. 44 (1993) (explaining that Medicaid patients are often left with nowhere to seek medical care but the emergency room because of physicians' refusal to see them); Thomas S. Nesbitt, Access to Obstetric Care in Rural Areas: Effect on Birth Outcomes, 80 Am. J. Pub. Health 814, 817 (1990); Rice et al., supra note 61, at 1360. Under the Act physicians are not required to belong to any particular plan. Consequently, physicians can avoid poor and ethnic American patients by merely refusing to join plans which have a large percentage of those patients. Even where physicians belong to a plan they may still refuse to accept ethnic American and poor patients. Lundberg, supra note 200, at 2. 230. FN230. HSA s 6001. For example, the HSA outlines the computation of factors that limit the growth of premiums for the comprehensive benefit package in regional alliance health plans. Id. 231. FN231. Plans would also vary in their access to specialty care and expensive technologies. This difference in access between basic-premium plans and those that impose a premium surcharge would perpetuate differences in access to health services based on socioeconomic status rather than on medical condition and appropriateness only, continuing fundamental inequities in access to care. Rice et al., supra note 61, at 1360. 232. FN232. As noted in one report: at their worst some HMOs make the elderly fight for benefits, especially those for costly skilled nursing or home care that plans must provide aspart of the customary Medicare package of coverage. Some HMOs have dragged out the process so long that Medicare beneficiaries have died before ever receiving the nursing care they are legally entitled to. Byrd & Clayton, supra note 69. 233. FN233. HSA s 6001(c)(1)(A). 234. FN234. Id. 235. FN235. Id. 236. FN236. In fact, the choice feature of the health care plan may be a sham for all but the wealthy. Over time, the reform would decimate all but the large corporate health care entities. Currently, ten insurers control 70% of the HMO market. Only the larger insurers will have the resources to develop nationwide networks necessary to serve national corporations. Such health care networks will force out all other competition. 'When the Big Three ran the auto industry, they controlled prices effectively, and no one imagines that compact health care plans from Japan will ever penetrate (or even be allowed to enter) this market.' Himmelstein & Woolhandler, supra note 92, at 4. 237. FN237. Id. 238. FN238. See generally Mark A. Hall & Gerald F. Anderson, Health Insurers' Assessment of Medical Necessity, 140 U. Pa. L. Rev. 1637 (1992). 239. FN239. HSA s 1141(a). 240. FN240. Id. ss 1141(a)(2), 1154 (allowing the National Health Board to develop regulations). 241. FN241. Id. ss 1141(a)(1), 5201(e)(3) (providing notice and disclosure requirements for health care plan that denies coverage based on a determination that the treatment is not medically necessary). 242. FN242. Rosenblatt, supra note 4, at 6; see generally Randall, supra note 99, at 28- 29. 243. FN243. Institute of Medicine, Committee on Utilization Management by Third Parties, Controlling Costs and Changing Patient Care: The Role of Utilization Management 1 (Bradford H. Gray & Marilyn J. Field eds., 1989) (hereinafter, IOM Study); see also, Rosenblatt, supra note 4, at 7. 244. FN244. For example, it has only been in the last several years that the medical profession has begun to recognize the significance of testing drugs and treatment modalities on women and on people of different races. Therefore, we actually have very little data as it relates to treatment modalities and the impact of those treatment modalities on anyone other than white males. 245. FN245. See supra note 79 and accompanying text. 246. FN246. Rosenblatt, supra note 4, at 7. 247. FN247. HSA s 5201(b)(4)(C). 248. FN248. Randall, supra note 99, at 18; Rosenblatt, supra note 4, at 13 (citing Sally Hart and Alfred J. Chiplin, Proposed Revisions to Health Care Reform Act (submitted to Office of Health Legislation, HHS)); see also Bradford H. Gray, The Profit Motive and Patient Care 309 (1991) (reporting that when utilization review companies determine that further hospital care is not medically necessary, in almost all cases, the attending physician will discharge the patient). 249. FN249. In authorizing the development of practice parameters, the Act outlines certain requirements, none of which require that guidelines be culturally relevant or appropriate. HSA s 5006(a)(2). 250. FN250. Managed care plans skimp on doctors. For instance, they employ one physician for every 800 patients, even though currently, the United States has one physician for every 400 patients. As more Americans enroll in managed care plans, non-managed care physicians will find it impossible to maintain a practice. Himmelstein & Woolhandler, supra note 92, at 4. 251. FN251. Rice et al., supra note 61, at 1361 (suggesting that the lower cost plans would be more likely to contract with physicians who are less experienced and less skilled). 252. FN252. Assuming that physicians are rational economic actors, this is common sense. If a physician is a prominent heart surgeon and the higher cost-sharing plans pays more per patient for rendering the service than the lower cost- sharing plans, economically it would be irrational for a physician not to limit the number of patients from the basic plan. 253. FN253. U.S. Health Reforms: Cliches, Cost and Mrs. C., 341 Lancet 791, 791 n.5 (1993). 254. FN254. Rice et al., supra note 61, at 1360. As one author has noted, '(Ethnic Americans and the poor) will have limited provider networks that may be geographically inconvenient, provide only the most basic services required, provide the least choice of physicians and hospitals, make it difficult to obtain specialist care and new technologies, and have the least thorough quality assurance programs. We thus anticipate segmentation of the market for health plans and health services, with more costly plans providing more accessible and often better-quality services for their enrollees-in short, a continuation of two-tier medicine . . . .' Rice et al., supra note 61, at 1361.