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Zack Hutchins
Director of Communications

June 11, 1998 

As session nears end, Council keeps pressure against HMO liability bill

As the Legislative session nears an adjournment scheduled for June 18, The Council is sustaining its efforts to convince lawmakers to reject a bill that would expand HMO liability.

The bill would impose a new and higher liability standard for decisions that arise from a health-care contract, said Elliott A. Shaw Jr., director of government affairs for The Business Council and its specialist in health-care issues.

"This bill takes the broad leap to suggest that rational medical decisions not to render care to a participating member could now be the subject of tort liability, complete with the attendant rights in an already burdensome and unpredictable civil justice system," Shaw said in a memo of opposition circulated to legislators in May.

"The beneficiaries of this legislation would be the trial lawyers," he added.

In his memo, Shaw warned lawmakers not to embrace a common view of what health care was like before managed care -a view Shaw described as "over-romanticized."

Health care before managed care was over-utilized, had little or no quality measurement, and failed to emphasize primary and preventive care, he said-"and it was escalating in costs at double-digit rates every single year in the 80s."

This sent more people into the ranks of the uninsured, he added.

Expanding HMO liability in the way proposed by this bill "would again force up costs, and it would again encourage a system of over-utilization or 'defensive medicine,'" he wrote.

Shaw said The Council supports changes to the state's liability laws that discourage, rather than encourage, more litigation.

The current health-care system already offers "ample rights for consumers who feel aggrieved by their health insurers," he said. Expanding those rights will ultimately raise costs and increase the number of uninsured, he said.