September 24, 1997

Study Casts Doubt of Impact on Doctor-Patient Relationship

Managed care is the greatest change in American health care in a generation. Change of so fundamental a nature is bound to have far-reaching implications for health care providers as well as patients. On one hand, the greater penetration of managed care into the market has reduced the cost of, and increased access to, health care for millions of Americans. On the other hand, it has resulted in the implantation of a third party into what once was exclusively a patient-doctor relationship.

It is not surprising that this level of change has generated questions for Congress. Perhaps the most pressing has been whether or not the new business relationship has adversely infringed on the traditional medical one. Specifically: Does managed care limit doctors' communications with patients through so-called "gag rules"?

As important as this question is, and despite how often it has been debated over the last several years, the issue had not been studied until the General Accounting Office (GAO) was instructed to do a report earlier this year. That report is to be released today. GAO found:

• No use of explicit "gag clauses" in any of the contracts reviewed (that finding is consistent with recent research on Medicaid managed-care contracts).
• "Gag clauses," regardless of how they are defined, are "not likely to have a significant impact on physician practice."
• Only one reported court case involving such clauses, and it provided "thin evidence" of the claim, according to the court. [No. 96 Civ. 1107 (SHS) (S.D. N.Y. July 23, 1997)]
• A countervailing trend of "anti-gag clauses" which explicitly state that the physician "should not misconstrue the contract or a specific provision as restricting medical advice to patients" or that the physician "should foster open communication."

The Purpose of the Study

Earlier this year Senators Lott, Nickles and Craig asked the GAO to study the incidence and effect of so-called "gag clauses" in HMO contracts. The reason, as the report states, is that:

During the past 2 years, some physicians and consumer advocacy groups have claimed that health maintenance organizations (HMO) impose contractual limitations -- referred to as "gag" clauses -- that interfere with the physician-patient relationship by impeding discussions of treatment options. ["Managed Care: Explicit Gag Clauses Not Found in HMO Contracts, But Physician Concerns Remain," GAO Report HEHS-97-175, p. 1]

The report defined three objectives, to examine:

• (1) The types of contract clauses that could limit a physician's ability to advise patients of all medically appropriate treatment options;
• (2) The extent to which these different types of clauses exist in current HMO contracts with physicians; and
• (3) The likely implications of HMO contract language on physician practice.

These were examined through the uses of a survey of actual contracts (1,150 contracts from 529 of 622 HMOs contacted -- an 85 percent response rate); a survey of health care attorneys (400 contacted with usable responses from 42 percent); and, through discussions with health associations and medical societies. The first two are of particular importance because of their unique and empirical nature. In short, for the first time an empirical and objective study was undertaken. (The third method used in this study is more questionable: of the eight "discussion" groups surveyed, all are physician groups whose participants were interviewed in limited numbers in nonconfidential settings, and so yielding subjective and unquantifiable results.)

Results of the Study

GAO defined an explicit "gag" clause as: "a clause that prohibits discussion of procedures or providers not covered by the plan, and, to a lesser extent, one that requires physicians to consult with the plan before discussing treatment options with enrollees"[GAO Report, p. 2].

• "Of the 529 HMOs in our study, none used contract clauses that specifically restricted physicians from discussing all appropriate medical options with their patients" [p. 3].

GAO also recognized that other than explicit clauses could be interpreted to restrict communications: "Some physicians and health care lawyers believe that other clauses --such as those that bar physicians from disparaging the plan, soliciting patients to join another health plan, or revealing confidential plan information -- could restrict the information and advice that physicians provide about a patient's medical options" [p. 2]. Looking at these three types of clauses that GAO said could be open to interpretation, GAO found:

• Of the three, only nondisparagement clauses were considered by a majority of any group of health-care attorneys (in the case of attorneys representing physicians, it was 64 percent) to have "a moderate to great effect on a physician's discussion of treatment options." This position was supported by 46 percent of attorneys working with both groups (physicians and HMOs) and by 25 percent of those representing HMOs [p. 7].
• However, nondisparagement clauses were used by only 7 percent of the plans studied and occurred in only 5.5 percent of all contracts GAO examined.
• The overwhelming amount of attorneys said that both nonsolicitation clauses and confidentiality clauses would have little or no effect on physician discussions of treatment options. (With nonsolicitation clauses, the percent who agreed with that assessment were: 68 percent of those representing physicians, 89 percent of those representing HMOs, and 75 percent representing both; with confidentiality clauses, it was agreed to be 68 percent of those representing physicians, 83 percent representing HMOs, and 77 percent representing both) [pps. 7-9].
• Further, less than a third (32 percent) of plans used nonsolicitation clauses and only 62 percent used confidentiality clauses [p. 10].

Anti-Gag Clauses "Used to Minimize Inappropriate Interpretations"

GAO also found that "in an effort to mitigate any impact of clauses that physicians say hinder treatment discussions with patients, HMOs may include anti-gag statements in their contracts. . . . An anti-gag clause generally states that provisions in the contract are not to be construed as prohibiting discussions of care-related matters with patients" [p. 9].

• Anti-gag clauses were used by 60 percent of the plans, and by two-thirds of the contracts, that used any of the three clauses that could be interpreted to restrict communications -- and were used by 27 percent of the contracts that contained none of the aforementioned business clauses [p. 10].

Physician-Run Networks: The Control Group

Among the HMOs studied by GAO, a portion of them were run by physicians themselves. A comparison between conventional and physician-run HMOs is interesting for two reasons: first, it is important to see what contract clauses are used by physicians governing themselves; and second, because physician-run organizations were greatly facilitated by the recently passed Balanced Budget Act (BBA), such groups can be expected to gain greater market penetration. Among physician networks, GAO found:

• No use of explicit gag clauses, as with all HMOs.
• A majority (54 percent) did use at least one of the three clauses that GAO identified as being subject to misinterpretation [p. 12].
• Less than half (43 percent) used anti-gag clause language [p. 12].

GAO Concludes No Apparent Limitation on Doctor Advice to Patients

GAO concluded: "Restrictive gag clauses in contracts, by themselves, do not appear to be limiting physicians' ability to advise their patients about all medically appropriate treatment options. Even taking into account the prevalence of business clauses that could be interpreted by physicians as interfering with medical communications, it is unlikely that these contract clauses actually limit physicians' discussions of all treatment options with their patients" [p. 15].

The GAO report raises some important points for Congress, not only regarding "gag clauses," but regarding health-care mandates in general. In particular:

• The GAO report addresses a serious shortcoming that had existed: the lack of any serious investigation in a thorough and systematic manner of this issue.
• The GAO report may serve as a guide for the future: Legislating by anecdote is likely to leave the nation scrambling for an antidote in short order. Congress should thoroughly investigate before passing mandates, which could have unforeseen and costly consequences for patients of our health care system. This points to the importance of Congress' investigative and oversight role. Investigation and oversight are not merely products of legislation -- they should be precursors to it as well.
• Is this report a picture of a problem that is decreasing or increasing? Only a later study can determine this, but it is important for Congress to know -- perhaps before it acts.

Where Should We Go From Here?

The lack of incidence of "gag clauses" in contracts raises the question of the appropriate legislative response -- if any -- to this issue. For example, should Congress encourage anti-gag language that is already being used by a majority of plans?

• Any legislation has unforeseen, as well as intended, effects. In this case, caution must be taken in addressing an area with only marginal impacts and thereby with only marginal improvement possible -- yet, where the adverse risk of acting relatively increased.
• Nearly nine out of ten Americans have a stake in the future of our health care system, a system that works better than any other in the world. Congress should proceed with caution before legally binding a successful system. With every such requirement, Congress runs the risk of increasing the cost and thereby reducing the access to patients.