Managed health care has recently generated a great deal of distrust, even anger, in the public mind. To be sure, much of this public reaction is based on anecdotal evidence and one-dimensional thinking. But many unbiased experts observing managed care today are themselves unhappy with the health care industry's performance. While these observers find little justification for the current political backlash against managed care, they are also disappointed that today's health plans have not made a more positive difference. Indeed, informed observers commonly regret that the new arrangements for the financing and delivery of care have done so little to get physicians to adopt truly efficient practices, achieving not only cost reductions but also substantial improvements in health status and patient outcomes— that is, in the quality of care. Although managed care has not demonstrably harmed the overall quality of health care in the United States, it has done little to improve it.

In December 1998, Iceland's Parliament, the Althing, passed the Act on a Health Sector Database (the Database Act or Act), a highly controversial law authorizing the development of a Health Sector Database (the Database) to collect genetic and medical information already contained in various locations around Iceland as part of Iceland's national health system. As a result of the Database Act, Iceland is the only country in the world with laws authorizing collection and storage of the genetic heritage of an entire population by a private biotechnology corporation with rights to exploit the data as a commercial commodity. Many databases now exist in Iceland as individual and segregated entities that contain detailed medical information about every Icelandic person, both living and dead, dating back to 1915 when the recording commenced.

Suppose that a managed care enrollee visited his plan doctor for treatment of an injury. Next, suppose that either: (1) the doctor, through her own negligence, failed to render the appropriate standard of care, or (2) although the doctor desired to treat the injury consistent with what she believed to be professionally recognized standards of health care, the managed care organization (MCO) administrators denied coverage. Consequently, the doctor failed to render adequate treatment. In both cases, under traditional jurisprudence, the enrollee might have a medical malpractice action against his doctor. He also might try to hold the health plan liable under a variety of agency and direct liability theories. However, under the same facts, if a federal program such as Medicare paid for the enrollee's care, he might act as a whistleblower (or “relator“) against the doctor and the organization, conceivably recruiting the federal government to foot the litigation and investigation bills and increasing his recovery.

Public concern over the perceived failure of managed care has led many to call for the increased accountability of managed care organizations (MCOs). In response, during his January 1998, State of the Union address, President Clinton outlined a Patients’ Bill of Rights that would guarantee patients certain protections against abuses by their health plans. Since January 1998, the Patients’ Bill of Rights has been entrenched in partisan politics. Consequently, the 105th Congress failed to enact a Patients’ Bill of Rights and the 106th Congress has passed two opposing versions of the Bill. At the time of publication, the two bills sat in a joint House Senate conference committee awaiting reconciliation.

Although both sides support legislation increasing patient protections, Democrats and Republicans are divided over the issue of remedies for patients who have had their rights violated.