PI Action alerts & updates ... 1996
Project Inform Endorsements on California Health Care Ballot Measures
(Propositions 214 and 216)
by Scott Whitsett, TAN Volunteer
Here you will find an analysis of the two initiatives on the California
ballot, Propositions 214 and 216, that deal with reform of health
care businesses. These propositions were researched and the analysis
written by Project Inform volunteer Scott Whitsett. Also included
is Project Inform’s recommendation on the ballot initiatives
(YES on 214, no recommendation on 216) and Scott’s personal
strategy (YES on both) based on his analysis and his experience
as a health care consumer in an HMO environment. We think that it’s
important for you to consider both perspectives when making your
decision on how to vote.
Because of our limited resources and staffing, and because we are
a national organization, we were unfortunately not able to research
and provide analyses and recommendations on other important state
initiatives. We chose Props. 214 and 216 as a priority as they are
complicated initiatives and needed substantive research. We do,
however, encourage you to study the other measures carefully and,
when relevant, to ask how the initiative would be beneficial or
harmful to people living with HIV and AIDS and other life-threatening
illnesses. In particular, we encourage you to study Proposition
215, the Medical Marijuana Initiative, which greatly affects many
people living with HIV/AIDS.
We are indebted to Scott for his thoughtful and detailed research
on these initiatives and hope that it helps you make an informed
decision when you go to the polls on November 5. If you have any
questions, please contact Ryan Clary or Anne Donnelly at 415-558-8669.
There are two propositions on the California State ballot which
would affect the way health insurers, including health maintenance
organizations (HMOs), insurers, hospitals, and nursing homes (we’ll
refer to all of these health care businesses as “HCBs”
for the sake of simplicity) do business in California. Propositions
214 and 216 would limit the ability of HCBs to consider profit before
quality of care in making health care determinations for insured
health care consumers.
Project Inform’s Recommendation:
After evaluating both propositions, Project Inform STRONGLY endorses
Proposition 214. We take no position on Proposition 216 for reasons
discussed below.
Both measures offer important protections for insured patients
and health care providers:
Full Disclosure of Medical Information to Patients:
Currently, HCBs can require their providers to sign contracts limiting
what providers can say to patients about, for example, referrals
and treatments that are not approved by the HCB. Propositions 214
and 216 would abolish these “gag” clauses. They would
prohibit HCBs from preventing doctors or nurses from disclosing
any information that the caregiver determines to be relevant to
the patient’s health care.
Patient Advocacy:
Both measures would prohibit HCBs from punishing (i.e., firing,
demoting, canceling a contract with or otherwise sanctioning) doctors,
nurses and other caregivers for acting as an advocate for patients
or reporting violation of law to authorities.
Ban on Financial Conflicts of Interest:
As it now stands, HCBs can reward health care providers for limiting
treatment, referrals or hospitalizations by paying bonuses or offering
other financial incentives. Both 214 and 216 would abolish these
practices.
Written Criteria for Denial of Care:
Propositions 214 and 216 would require that HCBs adopt written rules
governing when care can be denied. The rules would have to be written
by qualified physicians based on “sound clinical judgment”
and updated every year. Because the most promising treatments for
HIV and AIDS are often the most expensive, PI believes it is vital
that health care decisions be based on clinical, not financial criteria.
We also think it is important that medical professionals, not corporate
bureaucrats, set the rules for denial of care.
Pre-denial Physical Examination:
Both propositions would require a second opinion from a qualified
health professional, based on a physical examination, before services
recommended by a patient’s health care provider could be denied.
HCBs would also be require to explain the reasons for a denial of
care in writing to the patient and their provider.
Health Care Professionals Determine Medical Care:
Both propositions would require that health care professionals,
not clerks, set the rules for determining what care is given by
HCBs. They would hold those professionals to the same professional
standards and disciplinary procedures that apply to any other health
care decisions made by medical professionals.
Staffing Requirements:
Both propositions require that all health care facilities provide
minimum safe and adequate staffing of health care providers. They
would require the State Director of Health Services to update staffing
standards periodically for HCBs under their jurisdiction. Proposition
214 would go further, requiring the State Department of Corporations
to take similar steps for HCBs they license.
Disclosure Requirements:
Both propositions would require that HCBs keep information on file
and available for public inspection. For example, HCBs would be
required to disclose their standards for denial of care, all data
used to determine quality, staffing, reduction of services, information
on complaints, and financial data on profits and overhead and litigation.
Proposition 214 is more specific, requiring disclosure of how much
of HCB premiums are spent on patient care, salaries and overhead.
Patient Privacy Protections:
Both propositions provide protections, in addition to existing legal
protections, for patient medical records, prohibiting HCBs from
selling patient records without written authorization from the patient.
We favor Proposition 214 over Proposition 216 because 216 has additional
provisions that are of questionable benefit or add unnecessary costs
that may impact the level of care for people living with HIV and
AIDS.
For example:
Public Health and Prevention Service Fund:
Proposition 216 creates a fund to finance expanded community health
care services. The funding would come from fees that would be imposed
whenever HCBs eliminate patient care beds, convert health care facilities
from nonprofit to for-profit status, engage in mergers, acquisitions
or “monopolization”, or provide certain stock payments
to HCB executives. We agree with the supporters of 216 that expanded
access to public health services for uninsured people is an important
goal. We also agree that providing excessive compensation for HCB
executives while care is rationed is unconscionable. However, uninsured
people living with HIV and AIDS need a steady source of public health
funding to receive consistent health care. Funding that is dependent
on sporadic infusions of cash from select HCB business decisions
does not meet this need. This funding arrangement could also backfire
by giving legislators an excuse for further limiting direct state
funding of public health programs.
We also question whether maintaining the status quo by penalizing
HCB reorganizations is always in the best interest of people living
with HIV and AIDS. For example, money spent on empty hospital beds
or inefficient facilities might be better spent on other kinds of
care. The Yes on 216 campaign argues, however, that savings from
corporate reorganizations often go to HCB shareholders and executives,
not necessarily to better care for HCB subscribers. We also agree
with the Yes on 216 campaign that it is not in the interest of people
living with HIV and AIDS to have to travel greater distances to
receive care when local facilities are closed down. We simply do
not think the taxes imposed by 216 are the answer to these problems.
Health Care Consumers Association (HCCA):
Proposition 216 also creates a watchdog organization to monitor
HCB compliance with the proposition. Membership would be open to
any California health care consumer. According to the Yes on 216
campaign, the HCCA was modeled after consumer watchdog agencies
created to monitor the utility industry. PI does not question the
need for enforcement of the important provisions that 214 and 216
have in common. However, PI is concerned that HCCA membership could
be “packed” by interest groups (such as the health care
industry) with agendas other than providing the highest level of
patient care to people living with HIV and AIDS. There is also no
public disclosure requirement for the voluntary contributions that
would fund the HCCA. As a result, large donors could potentially
exert influence on policy decisions made by the HCCA board.
Amendment:
The other major difference between 214 and 216 is the process needed
to amend or alter them. Proposition 214 could be amended by a simple
majority of the State Assembly and Senate. Proposition 216, on the
other hand, requires a two-thirds majority of the legislature to
amend it. There is some risk of legislative manipulation of Proposition
214 at the bidding of the insurance lobby. However that risk is
minimized because 214 only permits amendment by a majority of the
legislature “in ways that further its purposes”, as
those purposes are stated in the proposition. Other changes would
have to be submitted to the voters for approval. We are more concerned
that the two-thirds majority requirement in 216 makes it virtually
unchangeable, regardless of whether change would be in the interest
of people living with HIV and AIDS.
PI’s decision to endorse 214 is based on our judgment that
it addresses some of the most serious abuses that HCBs inflict on
insured people living with HIV and AIDS. Its passage would protect
against denial of care and censorship of doctors based on profit
motives, not sound clinical data. Most of these important protections
also are included in 216. PI sees the additional provisions of Proposition
216 as either unnecessary or as imposing added costs on HCBs that
may not translate to better treatment or care of HIV or AIDS. We
are concerned that if both measures pass, the implementation of
either measure could be tied up in court while people lack the essential
protections shared by both measures. Accordingly, PI has decided
to take no position on 216.
Author’s Recommendation:
As the author of the analysis, and a health care consumer, my voting
strategy is to vote for BOTH measures. While I worry that a court
battle could delay implementation of the propositions, I think the
protections shared by both propositions are too important to be
lost. I am also concerned that if both propositions fail, it will
be difficult to find backing for future reform campaigns. I am frustrated
that the backers of the two measures did not work to develop a consensus
proposition they both could support. This has permitted the insurance
industry to fund an aggressive offensive against both propositions.
As a result, both measures are currently behind in the polls. As
a voter and health care consumer, I am willing to take the risk
that both initiatives will pass over the risk that both may fail.
