Women’s Health And Cancer Rights Act of 1997
Subcommittee on Health Care
Senate Finance Committee
Gail R. Wilensky, Ph.D.
John M. Olin Senior Fellow
November 5, 1997
Thank you Mr. Chairman for inviting me to appear before the Subcommittee on Health Care of the Senate Finance Committee to provide testimony regarding S. 249, the “Women’s Health and Cancer Rights Act of 1997.” My name is Gail Wilensky and I am the John M. Olin Senior Fellow at Project HOPE, an international health education foundation. I am also the chair of the Medicare Payment Advisory Commission and a former Administrator of the Health Care Financing Administration. However, I am here today only as someone with expertise in health care policy and financing. My views are my own and do not necessarily reflect those of my affiliated institutions.
Under S. 249, all private insurance would: 1) require coverage of an inpatient stay for women undergoing breast cancer surgery (mastectomy, lumpectomy or a lymph node dissection) for an unspecified length-of-time, to be determined based on the physician’s assessment of medical necessity; 2) require coverage for reconstructive surgery on the diseased and non-diseased breast, if deemed by the physician and patient; and 3) require coverage for a second opinion to be provided by a cancer specialist, at no increased cost to the patient.
Breast cancer and breast cancer surgery are deeply emotional issues. About 182,000 women will get breast cancer this year, and more than 110,000 mastectomies will be performed this year. It is easy to understand the sympathy this issue raises. However, it is not at all clear that there is a problem involving breast cancer coverage that requires new Federal legislation and proposing new Federal mandates on private health insurance coverage (including ERISA-exempted health and welfare plans) raises a series of concerns: concerns about the role of the Federal government in areas that traditionally have been under the domain of the states, the impact of mandates on the cost of health care and the impact of mandates on locking-in standards of care that exist at a given point in time.
MISMATCH BETWEEN PROBLEM AND SOLUTION
About one year ago, an article appeared in the Hartford Courant, with follow-up stories in the Washington Post and Wall Street Journal suggesting that two Connecticut HMO’s were requiring physicians to perform some mastectomies on an outpatient basis and not covering an overnight hospital stay unless it was stated as medically necessary by the physician. This led to charges that managed health care plans are limiting coverage for mastectomies to outpatient treatment and in other ways, negatively effecting the treatment of breast cancer surgery for financial reasons.
The empirical evidence that exists, however, suggests that the rate of outpatient mastectomies remains relatively small and that the rates between HMO’s, other managed care and fee-for service are comparable or at least not higher for managed care. For example, according to the New York Department of Health, Bureau of Quality Management and Outcome Research, of the 7016 mastectomies performed in 1995, only 124 were performed on an outpatient basis and of these only 19 were in HMO’s. Among the 74 performed on the Medicare population, 72 were financed by traditional Medicare and 2 were covered by Medicare HMO’s. Similar statistics were reported by HCIA, a Baltimore-based health information company, for Medicare beneficiaries in 1996. Only 7.6% of the Medicare beneficiaries having mastectomies were treated on an outpatient basis and the vast majority were covered under traditional Medicare.
The MEDSTAT Group, a health care data analysis firm, analyzed records from
their database of privately insured employees between 1993 and 1994, and found
that there were generally consistent rates of mastectomies performed on an outpatient
basis across insurance groups. The only significant differences were that fee
for service plans had the highest rate of outpatient procedures for simple mastectomies
(26% versus 17% for HMO’s and 11% for PPO/POS) and that PPO’s/POS
had the highest rate for modified radical and radical mastectomies (12% versus
5% for HMO’s and 9% for FFS plans).
MANDATES HAVE UNDESIRABLE CONSEQUENCES
Aside from the philosophical issue of expanding the role of the Federal government in areas traditionally under the jurisdiction of the states, mandated benefit laws have several other undesirable and unintended consequences.
The most frequently raised concern, whenever mandated benefits are discussed, is that mandated benefits raise the cost of health care and therefore raise the cost of health insurance. This effect is particularly problematic for the almost 40 million uninsured. The states have enacted many mandated benefits over the years, exacerbating the problems of the uninsured to the point where some states have allowed for reduced benefit packages to be offered on a demonstration basis to certain groups of uninsured individuals.
In a recent report by the General Accounting Office, it was estimated that
mandated benefit laws account for about 12 percent of the claim costs in Virginia
and 22% of the claims cost in Maryland. The Congressional Budget Office estimated
that the 1996 Federal law mandating private insurers to cover 48-hour maternity
stays will cost the government $223 million over four years and that the private
sector direct costs will increase by over $745 million over four years.
Government established benefit mandates also tend to lock-in standards of care that exist at a certain point in time. This means that mandated benefits, while well-intentioned, can mean making what is common practice in one period, a “requirement” in another period, particularly from the patient’s point of view, whether or not it represents the latest or best in medical practice. This sense of entitlement to a service, particularly one that the patient does not pay for directly, has been particularly problematic for Medicare’s home care benefit, even though it too is determined only by the patient’s physician.
Mandated benefit laws do not prohibit medical progress directly but they can impede the progress that is occurring in the medical community and in the marketplace to find ways to deliver care in new, better and cheaper ways. There are several studies, for example, that show that women who meet certain medical criteria and who have certain social support systems can do far better with outpatient mastectomies. While this legislation does not prohibit outpatient mastectomy, it’s requirement for inpatient coverage leads to the expectation that inpatient coverage is the norm.
Lillie Shockney, who is also testifying on this panel, can describe the successes of the Johns Hopkins outpatient mastectomy program far more accurately and eloquently than I but a few statistics are worth noting. The Hopkins Breast Center, which has gradually eliminated hospital stays for women meeting certain criteria, has reported lower infection rates and higher satisfaction among these women. A 1996 study of 525 women who underwent outpatient mastectomies at Henry Ford Hospital in Michigan reported accelerated physical recovery, earlier return to occupational activities and numerous psychological advantages. A 1995 study at the New Jersey College of Medicine of 133 women who underwent outpatient partial mastectomies with lymph node removal and 45 women who had surgery on an inpatient basis showed the outpatient group had a lower rate of post operative infection and a higher level of satisfaction. Similar findings have by the Comprehensive Breast Care Center in Florida on a 1993 study of 221 women.
The evolution and change in health care delivery that has occurred and is continuing to occur will not be helped by Federal legislation which presumes or implies particular sites for care or particular types of treatment of care.
It has only been in the last decade that the medical community has focused on the need for more information on clinical effectiveness and outcomes. Many medical practices have come into use without adequate evidence of their clinical effectiveness or the circumstances limiting their effectiveness. Wide variations in medical practices for similar conditions, even after adjusting for differences in patient characteristics and illness levels, continue to be reported, including in areas of breast cancer surgery.
The Federal government has a role in funding research in these areas and in helping to disseminate the information to clinicians and patients alike. This has been area of concern for some of the centers within the NIH and a primary concern for the Agency for Health Care Policy and Research and other parts of HHS but more can and should be done.
Patients also need to understand that physicians, hospitals and health care plans differ in terms of the quality of medical care provided and the satisfaction of the patients they serve. Seeking out this information and making use of it will put important pressure on the health care system to change in ways that will improve both quality and satisfaction.
Finally, many of the problems frustrating consumers most about their health
insurance coverage would disappear if they had a more active role in choosing
their health insurance. Most of us have health insurance through our employers
because of the tax subsidies associated with employer sponsored insurance. Some
of us have many choices, particularly those working for the Federal government,
the state of California and some large employers but many of us have little
choice. The Kassebaum-Kennedy legislation (The Health Insurance Portability
Act) passed in the 104th Congress allows the self-employed and single proprietors
to deduct the premiums they pay for insurance, thus opening up the tax subsidy
to a new group of the employed who will have substantial choice in the type
of insurance they purchase. The Dole-Packwood legislation proposed in the 104th
Congress would have allowed small employers to buy into the Federal Employees
Health Care Plan on a non-subsidized basis, thus potentially opening up a wide
range of choices to employees of small firms. Expanding the ways in which employees
can make use of the existing tax subsidy for employer sponsored insurance would
allow patients and families to exert far greater control on the type of insurance
they purchase and drive the health care system to be more responsive to their
desires. The Congress has taken some steps in this direction. It needs to do