Way Ahead of Bill

By GEORGE J. CHURCH

Why wait for Bill Clinton, or Hillary either? They are taking what seems like forever to come up with a national health-care plan. And when they do, Congress may stall some more and change the plan beyond recognition. So states, companies and even the medical profession are pushing ahead with their own plans to cut costs, streamline care and extend coverage to more of the uninsured. "If anyone believes we are waiting for the Administration's final package or for congressional action on that package, he's wrong," says Roger Tracy, director of community-based programs at the University of Iowa College of Medicine. "Reform is alive and well and moving very swiftly."

To patients, the reforms may mean a more restricted choice of doctors, or else paying a greater portion of the bill. Many corporate plans seek to steer patients to physicians who join a health-maintenance organization (HMO) or so- called preferred-provider organization (PPO) by cutting reimbursements to employees who insist on consulting "outside" doctors. But this is supposed to be offset by other benefits: fewer and simpler (or maybe no) maddening reimbursement-claim forms to fill out, to cite one. To the uninsured, the reforms provide a chance to buy policies now unavailable. Many states, for example, are sharply restricting the ability of insurance companies to turn down applicants because of a "pre-existing condition" (insurance jargon meaning they already have an ailment that is expensive to treat, perhaps kidney disease or multiple sclerosis). And for everybody -- patients, taxpayers, state officials, business executives -- the reforms promise, eventually at least, a slowdown in the relentless rise of medical costs that keeps kiting up insurance premiums and patients' bills and biting into state budgets and company profits.

The grass-roots efforts, however, form a crazy quilt of programs varying widely in generosity and effectiveness. There are companies whose idea of "reform" consists of slashing, or even denying, health benefits to retired employees (companies must now show the estimated cost of those benefits on their balance sheets as a liability, sometimes of embarrassing ; size). Some states have enacted only timid reforms, and others are being forced by a budget squeeze to pare down reforms put on the books in more prosperous times. Massachusetts, to take one prominent example, has delayed until 1995 some important steps in a comprehensive reform plan, enacted in 1988, that were originally supposed to be phased in over four years. Some companies worry about having eventually to deal with 50 different sets of health benefits, regulations and taxes. And some legislators fear they could penalize their states by enacting comprehensive medical reforms if taxes rise enough to push some businesses to relocate.

Even so, states and companies are in no mood -- or position -- to wait for the feds to enforce uniformity. State budgets were squeezed all through the 1980s as aid from Washington became less generous. Medical inflation has tightened the tourniquet. Spending on Medicaid assistance to the poor jumped from 13% of the average state's budget in 1986 to 17% according to the National Governors' Association. Add in health-insurance premiums for state employees, and medical bills account for 1 of every 4 dollars that some states spend. State reform programs, which began back in 1974 in Hawaii, have grown ever since. Of the state legislatures that met last year, only two (Illinois and Michigan) did not consider some sort of health-care reform.

Businesses have been prodded by a rise in medical premiums that has eaten away at profits and competitive position. Doctors, hospital administrators and other professionals have responded to the pressure with reforms of their own. One result: almost any reform suggested as part of a national plan is already being tested by someone somewhere:

MANAGED CARE. As the Clintonites intend to do nationally, many companies are luring or pushing their employees away from traditional fee-for-service doctors and into HMOs or PPOs. Chevron, the oil giant, has gone further than most: on July 1 it will drop its traditional freedom-of-choice plan entirely and offer its 18,000 employees in California a choice between the Kaiser Permanente HMO and HealthNet, a PPO that has signed up 19,000 doctors in the state. Chevron's contributions have jumped from $223 per California worker per month in 1989 to $375 now, but Tanya Bednarski, the company's chief adviser on health insurance, hopes the efficiencies of managed care will hold them steady now.

Companies often figure they can nag the networks into cost-cutting moves. "We have enough clout that we can tell insurance companies what we want in terms of plan design," says Jim Bronson, an executive of Sears Roebuck and Co., which has persuaded nearly 87% of its 315,000 employees, retirees and dependents to enroll in networks put together by three insurance companies. One benefit to employees: only a $10 copayment for a routine office visit and no claim forms to fill out. Managed-care networks also make more use of mail- order firms that buy drugs -- mostly generic -- in bulk and dispense them at discount prices. Instead of taking a doctor's prescription form into a local drugstore, more and more patients are getting "maintenance medications" -- those, like blood-pressure drugs, that must be taken regularly for long periods of time to control chronic conditions -- delivered monthly to their door.

HEALTH-CARE ALLIANCES. The Clinton plan envisions huge groupings of buyers -- patients, companies, insurers -- organizing to bargain with networks of sellers -- doctors, hospitals, nursing homes -- over service and prices. In four years of existence, the Central Florida Health Care Coalition, a grouping of major employers including Walt Disney, Martin Marietta and General Mills, has nagged local hospitals into many cost-cutting procedures. A newly enacted Minnesota law extends the idea by encouraging formation of integrated service networks. ISNs will be nonprofit organizations set up by groups of doctors and hospitals, or insurance companies, or employers, or governmental subdivisions, or just about anybody able and willing to provide medical services to people who enroll and pay a fixed fee for a particular time period. The state will license ISNs, beginning July 1, 1994, and regulate their charges.

COVERING THE UNINSURED. Twenty-seven states have established comprehensive insurance associations, essentially high-risk pools financed with state money, that offer medical insurance to people in poor health who need extensive care but cannot now buy insurance to pay for it. Iowa has an especially modest program: it forbids insurance companies to turn down people who already have insurance but apply for new policies -- because they change jobs perhaps -- on the basis of pre-existing conditions. The law applies only to insurers of companies with 50 or fewer employees, but "it's a start," says Tim Gibson, spokesman for the Iowa Medical Society. Florida has the most ambitious plan: a law passed last year sets Dec. 31, 1994, as the date for assuring every % resident access to medical insurance by setting up 11 health-care alliances with the clout to negotiate with insurance companies on how to do it.

STANDARDIZED INSURANCE. New Jersey is trying to cut through the bewildering variety of plans offered to consumers. Beginning July 1, it will require insurance companies to offer individuals and groups of up to 50 either a standard managed-care plan or five other plans covering treatment by individual doctors -- and that's it. The options will range from a "bare- bones" plan expected to cost about $1,000 a year to more expensive plans providing fuller and more complex coverage, but all must be designed so that the buyers can easily see exactly what they are getting for just how much money. Says Brenda Bacon, planning adviser to Governor James Florio: "The individual will now be able to compare apples to apples."

BACK TO THE G.P. Clinton's planners contend, correctly, that the medical profession is training far too many high-priced specialists; they constitute 88% of all doctors nationally. Kentucky is one state mulling ways to turn more doctors back to general practice. Benny Ray Bailey, chairman of the state senate committee on health and welfare, advocates tuition waivers and stipends for students going into primary-care medicine, if they agree to practice for a while in doctor-short rural areas. Bailey likens the current system to "training all the horses in the world to run a mile and a quarter and wondering why we can't find one to plow."

HOSPITAL MERGERS. These are among the most important of the reforms the medical profession is undertaking. Hospitals have long been accused of building expensive overcapacity (one-third of all hospital beds are unoccupied on an average day) and duplicating costly equipment that they could share. In Iowa, however, so many hospitals are merging that Des Moines may soon be the only city with more than one -- and there two of the remaining three big ones, Iowa Methodist Medical Center and Iowa Lutheran Hospital, are completing a merger. Among other things, they will concentrate on types of care in which they specialize: Methodist's doctors will do the surgery and other specialized care while Lutheran's physicians focus on family practice.

Such reforms in some ways only highlight the need for a federal program. Only Washington can make certain that everybody is insured; after 19 years of trying, Hawaii still has 2% of its population uncovered. Many experts fear too that without federal standards covering everybody, the savings from managed- care programs will prove illusory; doctors and hospitals will shift costs from people who are enrolled in those programs to those who are not.

Democrats and Republicans generally agree that public demand will force Congress to pass something before the 1994 elections. The White House, however, is still making up its mind what to propose. The Administration has already missed three target dates for unveiling its plan and this week a fourth will slip by: no one still thinks Tuesday, June 22, will be "launch day." Skepticism seems to be growing along with the delays. Until last week, the American Medical Association had been careful to talk a publicly supportive line, but now it vows to sue against any attempt to impose medical price controls.

The Administration expects to finally disclose its plan after all budget action is finished, which means autumn. Clintonites have even organized a war room -- dubbed an intensive care unit -- to coordinate a kind of marketing campaign. How soon Congress may act, however, and how much of whatever plan Clinton produces will survive the push-and-pull of the lobbyists for particular interests, no one can predict.

When the hard legislating begins, the Clintons can point out that much of what they propose is already being tested and proved out by states and companies. Some of the grass-roots programs might continue and grow even after nationwide reforms are enacted too. Clinton's plan is supposed to set federal standards but give states wide freedom in deciding how to meet (or exceed) them. Meanwhile, the states, joined this time by companies and the medical profession, are reclaiming a role they played well in the pre-New Deal era: serving as a laboratory and model for social legislation that is then picked up and extended by the Federal Government throughout the country.

With reporting by Scott Norvell/Atlanta, Dick Thompson/Washington and Leslie Whitaker/Chicago, with other bureaus