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Taming the beast: Clinton's aggressive health care package is a hot topic in the Arkansas medical community.

DR. MARY CORBITT couldn't believe the voice buzzing in her telephone receiver.

The Little Rock neurologist was listening to an insurance claims supervisor with no medical training explain why it wasn't a good idea to prescribe the drug Elavil for migraine headaches.

Forget that Corbitt practices at the Little Rock Headache Clinic and has considerable experience in treating migraines. Forget that the claims supervisor had nothing but the Physicians' Desk Reference to back up her claim.

"This was a decision made by an uninformed person," says Corbitt.

It was, in short, the essence of bureaucracy.

And it's exactly what Corbitt fears will happen again and again when President-elect Clinton begins layering new government reforms on the $800 billion health care industry.

Her suspicion bears intense examination, but it is difficult to probe deeply into the Clinton plan at this point.

It is like the glistening mist that shrouds a great mountain in darkness. Until the dew burns off on inaugural morning, we will not truly understand the punishing climb ahead.

At first, Clinton's vision was known as "Play or Pay" -- an innocent moniker meaning employers could either play ball with Clinton by paying for their workers' health insurance, or pay taxes into a government insurance system.

But as the idea gyrated through the electoral spin cycle, it became "Play or Else."

One way or the other, employers will be buying coverage for their workers under the plan.

Small businesses that can't qualify for lower group rates now will have the option to choose one of Clinton's proposed health care purchasing groups, which will allow them to collectively seek competitive bids for their insurance plans.

The Method

And how will this care be delivered? By way of care networks combining doctors, hospitals and other providers that sound a lot like the larger health maintenance organizations born in the mid-'80s.

They will focus on preventative care, and offer standard benefit plans drafted by a new national health board.

The board will set national and state targets for health spending and cap prices for health care providers that operate outside the managed-care networks.

If all of this sounds remarkable, just remember that at least 35 million Americans have no health insurance at this point and Clinton tells us 100,000 more are falling into the cracks each month. Even if everything works according to plan, it could take five years to achieve near-universal coverage.

And there is no guarantee that everything will work according to plan.

For one thing, small business owners who don't currently provide health insurance are not expected to take this legislative blitz lying down.

And another: While Clinton plans to eventually pay for the new programs with savings from administrative waste and duplication, many analysts believe he will be forced to seek other revenues.

Clinton could close the gap by capping the amount of insurance coverage that is sheltered from taxes, giving employers the incentive to find cheaper plans. This could prompt another legislative battle.

Finally, momentum is decidedly in the wrong direction.

Health spending in America is outstripping economic growth by 3 percent, and government health care programs could add nearly $1 trillion to the national debt by the dawn of the 21st century.

Everyone agrees that more people should be insured and medical costs should be lower. The solution, however, is in dispute.

Russ Harrington, president of the Baptist Medical System, thinks Clinton is on target with his ideas to reform malpractice law and insurance rules and create managed-care networks, but he fears trouble in other elements of the plan.

"They basically believe that there is enough fat in the system that once you sort through all of it, you will have some additional dollars. I think that would be unlikely."

Hospital Concerns

Harrington worries that all the emphasis on cutting costs will result in disincentives for quality care.

He also wonders about Clinton's proposal to prevent technological duplication within health care markets. There will be financial incentives for doing so, but no one knows what they are.

Harrington said the incentives would have to be substantial in a market where each new gadget means additional patients for the pioneering hospital.

Another key element in Clinton's plan is the streamlining and standardization of the insurance claims business.

At the moment there are at least 200 forms used by insurance carriers in the state. Some claims are processed electronically, but many still are done on paper.

Scott Price is president of Advantage Medical Systems Inc. of Little Rock, a company that handles claims for a multitude of carriers and electronically processes claims for the U.S. military.

He believes in Clinton's idea to computerize the process and create a standard form, and has the statistics to back it up.

Price says electronic claims can be paid in two weeks or less, and standardization could save his company up to 25 percent. The savings could be passed on to the carriers, the providers and finally -- in theory -- to the consumers.

He quotes a study that showed a medium-sized hospital with daily net revenues of $250,000 could invest an additional $5 million per year if claims turnaround times were significantly improved, earning annual interest of up to $500,000.

"That's not chicken feed," Price says. In fact, it's the financial equivalent of squeezing two extra days into the year.

Another study by the U.S. Department of Health and Human Services shows that complete claims automation would save $4 billion to $10 billion in annual costs nationwide.

Price also has misgivings, particularly with Clinton's idea about insurance purchasing groups.

"I believe in concept that it is a good idea," he says, "I just think it's going to be a logistical nightmare."

Drug Wars

Let's not forget about Clinton's crusade against irresponsible elements in the pharmaceutical business.

There are only two pharmaceutical companies in the state, and at least one of them is predictably irritated about the crusade.

Dunhall Pharmaceuticals of Gravette manufacturers analgesics, cold medicines, dental products and other relatively inexpensive generic proprietary products.

Monte Staha, Dunhall's president, believes the attention drug manufactures have received is undeserved.

"I'm not sure that his proposal has any meaning at all," Staha says. "One of the major problems in all of this is that if you have $100 in medical costs, the cost of a prescription drugs is around 2 cents."

Clinton has proposed removing tax breaks for pharmaceutical companies that increase prices faster than the rate of inflation.

It is hospitals, Staha claims, that are jacking up the costs of drugs to ridiculous levels. A pair of aspirin that might cost 5 cents in reality often is billed at $1.50, he says, and the same astronomical markups are applied to expensive drugs used for serious illnesses.

His assessment is in stark contrast to that of Roger Busfield, president of the Arkansas Hospital Association.

Busfield says hospitals pay an average cost of $14,000 per bed for pharmaceuticals each year, implying that high drug costs force them to raise fees.

From the insurance perspective, there are mixed reviews.

"If he can get anything done within the next two years it will be amazing," says Don Weeks, senior vice president of Few and Associates.

Clinton has promised to reform the insurance industry, making all health coverage portable and removing all restrictions for pre-existing health problems. Within a certain community, all consumers would be charged the same premiums, regardless of age or health.

"I am a little bit frightened because I do not know what regulations will be out there," Weeks says.

Arkansas Blue Cross and Blue Shield agrees with virtually every aspect of Clinton's plan.

Especially appealing is the idea of the standard plan, says Bob Shoptaw, executive vice president and chief operating officer for Blue Cross.

If all carriers have an identical plan, he says, consumers can choose on the basis of price and service, the same way they buy a car. It will be good for the industry, he says, and shake out all but the "serious" carriers.

"I think we all need to be optimistic," says Dr. Corbitt, the Little Rock neurologist at the Little Rock Headache Clinic.

With that said, she expresses grave reservations about Clinton's agenda.

The HMO-oriented concept could become a sea of red tape, Dr. Corbitt says.

"Patients can't get to the doctor who really needs to see them because there is someone 'triage-ing' them."

If she's right, the system could make medicine generally less lucrative, and become a migraine no drug can assuage.

Clinton's Prescription

These are President-elect Clinton's broad outlines for national health care reform:

* Create a national health care board of consumers, providers, business, labor and government, which would set national and state budget targets for health care funds.

* Form managed care networks of insurers, hospitals, clinics and doctors that would provide a fixed-dollar amount for each patient. Services obtained outside the managed-care plans would be subject to fee schedules set by the health care board.

Medicare funds will be enhanced by the reduction of unnecessary health care spending, and Medicare payments will be subject to budgetary limits.

* Set new rules for insurance companies, alleviating "job lock" by banning coverage exclusions for "pre-existing conditions."

Insurers will have to meet "community rates," which prevent them from charging more for employer size, health condition or gender. The rates would vary across the country.

A standard comprehensive benefits package would be created, stressing preventative care.

Publicly sponsored purchasing groups would allow small businesses and individuals to buy private coverage, priced by competitive bidding.

* Eliminate tax breaks for pharmaceutical companies that raise their prices faster than the rate of inflation.

* Introduce a universal claims form, along with standardized billing codes, electronic processing and other steps to reduce paperwork.

* Reform medical malpractice law with courtroom alternatives to resolve disputes. This will reduce "defensive medicine," the practice of performing unnecessary tests in the fear of malpractice suits.

* Reduce duplicative technology. The national health board will recommend ways to share new technologies between health care providers.

* Guarantee that workers will be covered by their companies and the unemployed can be covered through the purchasing groups. Employers have the freedom to choose between private insurers or the purchasing groups. These changes will be phased in, with the smallest companies coming last. The health insurance tax deduction for the self-employed would be raised from 25 percent to 100 percent.

* Use any savings from cost controls to expand the number of people covered. When universal coverage is achieved, the savings will be used to reduce the budget deficit.

* Expand health education in school-based, rural and urban health clinics. Expand Medicare to cover more long-term care services.
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No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1992 Gale, Cengage Learning. All rights reserved.

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Title Annotation:includes related article
Author:Haman, John
Publication:Arkansas Business
Date:Nov 30, 1992
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