Bill of Rights vs. Concentrated Power

Date: 2 Mar 1999 | posted in: From the Desk of David Morris, The Public Good | 0 Facebooktwitterredditmail

Bill of Rights vs. Concentrated Power

by David Morris
Institute for Local Self-Reliance

March 2, 1999 – published in St. Paul Pioneer Press

One of the White House’s priorities is to enact a Patients Bill of Rights that, among other elements, requires Health Maintenance Organizations (HMOs) to develop grievance and appeals procedures. Meanwhile, Senators Ron Wyden (D-OR) and John McCain (R-AZ) have introduced an Air Travelers Bill of Rights that requires airline companies to provide truthful information about flight delays, cancellations and overbooked flights.

How sad. Both political parties got us into this mess by opening the doors to health care and airline monopolies. Now, instead of confessing their sins and tackling the problem of concentrated power head on, they’re trying to make nice-nice with the voters by demanding that the new lords of the manor treat their serfs a little more decently.

Health care conglomerates now dominate medicine. There has been a massive conversion of non-profit hospitals to profit making entities. The Plutocratic Oath has replaced the Hippocratic Oath. Stock analysts on Wall Street now refer to patients as “revenue bodies”. Company owned health insurance subsidiaries are known as “patient feeder systems”.

The federal government let it happen. An analysis of 397 pre-merger notifications involving acute care hospitals from l99l to 1993 by the General Accounting Office found that only 15 had been challenged by the Department of Justice (DOJ) or the Federal Trade Commission (FTC). Neither the FTC nor the DOJ have challenged mergers or acquisitions between managed care insurers.

The U.S. Department of Transportation had a “perfect record” of approving every airline merger that came before it in the 1980s. Today, the architect of the federal government’s airlines deregulation strategy, former Civil Aeronautical Board Chief Alfred E. Kahn finds a “disturbing decline” in the average number of carriers per route. He is shocked that,”More and more airports are complaining they are at the mercy of a single airline”. A recent study by Salmon Smith Barney found that 33 of our 50 largest airports have excessive concentrations of airlines; the remaining 17 have moderate levels of concentration.

Concentrated power is the problem, yet neither party is willing to tackle that issue. So we are left with a series of bills of rights.

Not that there aren’t some good in these bills. The White House wants patients to have the right to sue HMOs for malpractice. Astonishingly, 125 million Americans covered under an employer HMO cannot sue their provider for anything more than the costs of care their HMO refused to reimburse, no matter how egregious the malpractice.

Insurers argue that allowing patients to sue would cause medical rates to skyrocket. Hogwash. According to the Congressional Budget Office, costs would rise by 1.2 percent, about $7 per covered employee per year. In 1997 Texas passed legislation allowing its residents to sue HMOs has not seen a flood of lawsuits. Only one malpractice suit has so far been filed. But the threat of a lawsuit has made HMOs in that state more responsive. Notes Time magazine, “doctors in the state say HMOs seem to have become more inclined to accept suggested treatments and speed the paperwork”.

The passengers bill of rights also contains some interesting componens. Wyden and McCain would allow the federal government to fine airlines that cancel flights simply because too few passsengers buy tickets. Representative Bud Schuster(R PA) would require an airline holding passengers in an airplane on the runway for two hours or more to repay those passengers twice the value of their tickets, with higher multiples for each additional hour trapped in the plane.

These bills of rights are modest. Yet that doesn’t mean passage is assured. More than 25 states have debated bills that would allow their residents to sue HMOs for malpractice. Only in Texas has such a bill become law. Last year Congress refused to make HMOs liable and the Republican majority has vowed to fight that provision again this year.

For free market die hards, concentrated economic power is not a problem. The Investors Business Daily views a passengers bill of rights as downright socialist. “Washington is the only place where people believe courtesy can be legislated”, it thunders. “No one is forced to fly….If the flying experience were so bad, travelers would choose trains and buses, leaving the airlines with empty seats.”

Oh my.

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David Morris

David Morris is co-founder of the Institute for Local Self-Reliance and currently ILSR's distinguished fellow. His five non-fiction books range from an analysis of Chilean development to the future of electric power to the transformation of cities and neighborhoods.  For 14 years he was a regular columnist for the Saint Paul Pioneer Press. His essays on public policy have appeared in the New York TimesWall Street Journal, Washington PostSalonAlternetCommon Dreams, and the Huffington Post.