Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SUNDAY, March 6, 1994 TAG: 9403060006
SECTION: NATIONAL/INTERNATIONAL PAGE: A-5 EDITION: METRO
SOURCE: Associated Press
DATELINE: WASHINGTON LENGTH: Long
The president says they'll help consumers get the best health plans. Television ads warn they mean "tens of thousands of new bureaucrats."
What exactly are those health care alliances everyone has been arguing about?
Few people seem to know, and if you listen to the latest batch of ever-changing congressional forecasts, perhaps few ever will.
But alliances - organizations set up in the states - are the Clinton health plan's primary network of ensuring that everyone is covered, has affordable insurance and information from which to choose the best options. Under the plan, about 70 percent of Americans would enroll in health plans through them.
Alliance-like structures are also featured prominently, albeit on a smaller scale, in the rival plans of Rep. Jim Cooper, D-Tenn., and Sen. John Chafee, R-R.I. Cooper calls them health plan purchasing alliances (or HPPCs, pronounced, hipic); Chafee calls them purchasing groups.
The alliances' main function would be to pool people who otherwise wouldn't have bargaining power into large groups so they would get better prices than they could get on their own.
"To put it simply, they level the playing field," said Richard E. Curtis, president of the independent Institute for Health Policy Solutions.
But would these alliances play too great a role in the administration of a health care plan? Would they be too bureaucratic?
Many people think so. The Congressional Budget Office report that evaluated the Clinton plan last month enumerated the various alliance duties - from regulating health plans to making sure all Americans are enrolled. "Any one of these functions could be a major undertaking for an existing agency with some experience, let alone for a new agency that would have to perform them all," the CBO said.
The Clinton administration has shown a great willingness to negotiate. Maybe it will give up the alliance concept altogether. Maybe it will take away many of the alliances' proposed functions. Whatever happens, even critics agree that something would have to take their place if universal coverage remained the goal.
"You don't just stand up and face east and blow a horn and say it's going to happen," Stark said recently. "You have to enforce it."
To understand the health alliance concept, take the case of an independent taxi driver. He's likely to pay thousands more to insure himself than someone who gets his insurance through a large company where he works.
A large company can bring in enough customers to make a difference in an insurer's business, so the insurer is likely to bargain. The cab driver can't.
With large numbers enrolled, the alliances would also spread insurance risk. In the Clinton plan, insurance reforms would require community rating, meaning all people in a given area would be charged the same fees for the same type of plan, regardless of their health, age or sex.
Opponents of the Clinton plan's alliances have repeatedly warned that they would limit choice, putting the government in charge of what doctors people go to. It's a charge that infuriates the administration.
In fact, all licensed health plans in an alliance area would be required to offer their plans through the alliance. Customers would get to choose from them - although costs might make some off-limits for some people. Each alliance would have to offer at least one "fee for service" plan, where people get to choose doctors.
Many people who worry about loss of choice actually had their choices limited long ago anyway, supporters say. Those people who get their insurance through their employers now often have little to no choice of plans.
Alliances, in all the versions, would provide consumers with information about the various plans offered, including report cards on how well the various plans have performed.
"They work for you. They educate you. They allow you to make decisions," Rockefeller said recently. "The point is, they put consumers in charge for the first time."
The Clinton administration says consumers win in the alliance structure. Insurers would not, they argue. No longer would insurers be able to pick and choose whom to insure; to vary their rates for different types of people; and to boast about successes that might not stand up to scrutiny.
"That's why they keep talking about the size of alliances - to keep the focus off all the other stuff," said Judith Feder, a key secretary at the Department of Health and Human Services.
But critics may have a point when they talk about bureaucracy and excessive government control. Alliances would require staffs and office space. They would also have many duties - which is really their most vulnerable point.
Because the Clinton plan would require all Americans to have health coverage, the alliances would also be responsible for making sure everyone in their boundaries enrolled.
They would also perform a host of other functions, from issuing health security cards to deciding who gets to enroll in plans when too many people sign up. They'd have to coordinate with other alliances around the country, research the merits of each plan and make sure each plan provided consumer information.
by CNB