NCPA - National Center for Policy Analysis

Health Insurance Plans Might Be Dropped If Patients Could Sue

January 27, 2000

More than a third of U.S. employers would consider dropping health insurance coverage for their workers if patients were allowed to sue the employer-sponsored plan for medical malpractice, survey results show.

The fear is that employers could be the next targets of litigation, according to management consulting firm Hewitt Associates. The concern grows from current efforts in Congress to pass a patients' bill of rights that would enable people to sue their HMOs.

  • Of the nearly 600 U.S. companies surveyed by Hewitt in August and September, 36 percent said they might drop health coverage if employer-sponsored plans became subject to medical malpractice lawsuits.
  • Managed care has had a negative impact on consumer satisfaction, said 62 percent, and 25 percent of companies expect employee satisfaction to decline over the next three years.
  • It has constricted access to care, said 60 percent, and negatively affected quality of care, according to 37 percent.

"The combination of declining consumer satisfaction and rising costs, along with the possibility of getting sued, is leading many companies to say there must be a better way to deliver health care," says Jack Bruner, leader of Hewitt's national health care practice.

"Many are starting to look at new approaches to health care that would give consumers more choice and control." For example, 40 percent of companies surveyed said that they would support legislation that would enable companies to provide employees with a voucher or set amount of money to buy their own health care coverage.

Source: Karen Pallarito, "Many Employers Would Drop Health Insurance Benefits if Patients Could Sue the Plan," Reuters Health, January 24, 2000.


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