Friday, May 23, 2003

Health Care: Physicians Obtain Big Settlement

Score one for the doctors:

Aetna Inc. Thursday broke ranks with other major health insurers, announcing a $470-million settlement of a suit filed by 700,000 doctors.

The physicians said the settlement would allow them greater flexibility in offering comprehensive care and make it easier to refer patients to specialists. They had charged Aetna with unfairly reducing payments and denying patients' coverage.

The eight other giant health insurers, however, said they would continue to fight the suit, filed in U.S. District Court in Miami by the doctors who joined together as a class last September.

Representatives for the doctors and Hartford, Conn.-based Aetna, the nation's third-largest health insurer, said physicians and patients covered by the insurer would soon have wider rights to appeal the company's decisions regarding payments and coverage. Doctors involved in the suit said the settlement must be signed by U.S. District Judge Federico Moreno in Miami before it becomes effective.

Now, some parts of this settlement rub me the wrong way, particularly the $20 million Aetna will pay to create a "foundation to focus on eliminating racial and ethnic disparities in health care." I mean, I can tell you how to do that for free—restore capitalism to the health care market. But overall, it's a good thing the physicians were able to get one major insurer to break ranks and settle. When you think about it, this settlement—which deals most with conduct rather than damages—amounts to a collective bargaining effort by the nation's physicians. This lawsuit probably would not even be necessary if the FTC and Justice Department would simply get out of the way and allow physicians to collectively negotiate with insurers in the first place. After all, it's a lot harder for an insurance company to screw physicians out of their contractual rights when they're able to respond with a group boycott. But under the almighty antitrust laws, the doctors' needs are secondary to the FTC's policy preference for maintaining the monospony power of insurance companies.

Still, the only long-term solution to the physicians' grievances is to put the government-sponsored HMO cartels out of business for good. This settlement is a good first step, but the doctors need to follow up, not just by maintaining their lawsuit against the remaining insurance companies, but by getting behind CAC's effort to exempt physicians from the antitrust laws.

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