Clinton Health Care Plan: Major Improvement, But Issues Remain

President Clinton's proposal for health care reform will
clearly be a major improvement over the current system for
people with HIV, cancer, and other major illnesses. But there
are also potential problems, and areas not yet clarified. In
addition, we do not know what will finally emerge from
Congress when Clinton is forced to trade off elements of his
plan in political compromises. It is important for the AIDS
community to be alert to how persons with serious health
problems will be affected by the various elements of health
care reform which may be proposed and decided over the next
months.

Some of the major benefits (which could, however, be lost in
political negotiations):

* Those with no health insurance or Medicaid (about 30
percent of people with AIDS) would get health coverage.
However, states will have about two years from passage of the
Clinton proposal to implement their health plans and extend
coverage to almost everybody.

* Medicaid (MediCal in California) now covers about 40
percent of people with AIDS, and coverage varies tremendously
from state to state. The Clinton plan will set standards
intended to assure a basic level of coverage wherever one
lives. Persons on Medicaid who also qualify for SSI or AFDC
will have the same benefits and choice of plans as everyone
else. It is still unclear how others on Medicaid will be
covered.

* Those who have private health insurance will not risk
losing their coverage -- because they change jobs, because
their insurance company controls the rules and finds a way to
drop them after learning they are sick, or for other reasons.
Persons with "pre-existing conditions" who are now stuck in
unsuitable jobs will be able to change.

* Prescription drugs will be covered, with patients probably
paying $5 or $10 for each prescription.

* Health plans "are required to provide coverage for routine
patient care associated with approved clinical trials." This
should prevent volunteers in trials from being charged for
these costs, as often happens today.

* While individuals will have to pay some fees for health
care, anyone's out-of-pocket costs will be limited to $1500
per year.

* People will be able to choose either a managed-care plan,
or a fee-for-service plan. Fee for service will be more
expensive; but it may be better for persons with special
medical needs. In either case, it should be possible to
choose a physicians outside the plan and be covered, although
one must expect a larger copayment when going outside the
plan.

The AIDS Action Council, which lobbies the Federal government
on behalf of more than 1000 AIDS organizations, strongly
supports the Clinton plan. Jeff Levi, policy director at AIDS
Action, recently said, "People with HIV will do well under
this plan, if its scope is not reduced. We will be fighting
against cutbacks and for strengthening key provisions." AIDS
Action Council has identified some potential problem areas:

* It is not clear that "off label" use of FDA-approved drugs
will be covered, even though such use is often the standard
of care for persons with AIDS, cancer, and other major
illnesses.

* Some coverage, such as mental health and substance abuse
services, will be phased in slowly, over a number of years.

* Massive computerization of patient records will probably
occur, and it is not yet clear how confidentiality will be
protected.

* While the Clinton plan is expected to provide long-term
care, emphasizing home and community-based care, there could
be problems with eligibility criteria for these services.

* Managed-care plans have often been a problem for persons
with HIV or other diseases that require expensive and/or
specialized care. Patients must have access to HIV experts
(not only infectious-disease specialists), without
"gatekeeping" by non-experts. They may need to choose
physicians outside the plan when necessary. And the plans
must have financial incentive to enroll persons with
expensive illnesses.

The off-label issue is a difficult one with managed-care
systems. These are drugs which are approved by the FDA for
some medical conditions ("indications"), but are also used
for other conditions -- for example, a cancer drug officially
approved for certain tumors, but widely used for other tumors
as well. They may be standard, accepted, and necessary
treatments when used off label, and not officially approved
for those uses only because the pharmaceutical company which
sells the drug did not do the research and paperwork to gain
official approval. The FDA has long made it clear that off-
label use can be legitimate and necessary, and that its
labeling is not intended to control reimbursement decisions.

Managed care plans, however, almost by definition are
unwilling to pay for everything a physician might want to do.
In the absence of generally recognized standards, the plan
may make its own decisions on what treatment is legitimate.
But these decision are hardly disinterested ones, since
clearly there is a financial incentive to refuse to approve
requested treatments. And official standards lag well behind
the real standard of care, since it takes time to formalize
and certify the actual practices which are accepted by
competent physicians.

Various ways have been suggested to reduce this problem,
including:

- Using formularies, such as the U.S. Pharmacopoeia, or lists
prepared by medical centers well regarded for HIV (or other
specialty) expertise. If a drug usage appeared in any of the
accepted formularies, it would be reimbursed. However, there
is often a serious lag between actual practice and
publication in the formularies.

- Holding frequent "consensus conferences" of leading
experts, to produce up-to-date recommendations for
physicians. Any drug usage recommended by these conferences
would be automatically reimbursed.

- Treating life-threatening conditions differently than other
illnesses. Perhaps any treatment recommended by a physician
would be reimbursed, without need for prior approval, unless
the treatment had been specifically disallowed for
extraordinary reasons.

- Having an appeal mechanism, so that an organization with no
financial stake could resolve disputes rapidly, without the
time and expense required for going to court.

Another issue -- raised by the pharmaceutical industry, not
by AIDS Action Council -- concerns price controls on new
drugs, which may be included in health care reform. Industry
supporters argue that the cost of new drugs for life-
threatening conditions is only 0.2 percent of the total
health care expenditures in the U.S. -- and that without the
incentive of sky's-the-limit prices, industry will not bother
to develop drugs to save lives. Our own experience in
reporting on AIDS treatment development for the last several
years suggests that this self-assessment by industry is
unfortunately often true; for example, there was little
interest anywhere in developing AIDS treatments until AZT
broke new ground on prices and made big money. Instead of
waiting for an ethical renewal, we might be better off paying
the toll, through an exception from any price controls for
drugs which advance the treatment of the most significant
illnesses; a partial precedent already exists in the favored
handling of "orphan drugs" for serious but rare diseases.
High prices are less offensive when we all pay through a
small percentage, than when the whole burden hits individuals
already in a personal and financial crisis. And nothing in
medicine is more important than better treatment for life-
threatening and disabling conditions, not only for orphan
diseases but also for those which affect large numbers of
people.