Recent Headlines About US Health Insurance Industry
Like everyone else in the United States, I have watched the effect of Managed Care on the delivery of healthcare services with grave concern. So far, it seems to me to be more of a "shell game" than anything else, where income has been effectively shifted from health care providers and institutions into the private insurance industry coffers. I see more and more cases where I believe necessary and appropriate care is being delayed, downgraded, or denied. Of course this reduces short-term costs by lowering the quality of life for the insured person. But, it is not at all certain that this will be effective in the long run. And, the know widely-recognized drop in students applying for all health care careers is but one of a number of unintended consequences that will come back to haunt us in the future.
I noticed four recent articles in national newspapers that suggest to me that some of these more fundamental issues are coming to a head now. The soft economy and the dwindling projected surpluses will likely force our society to confront these issues sooner rather than later. I'm not sure what the answer should be, but thought that it might be a good first step to raise awareness about conflicting demands being placed on the insurance industry.
The first headline, from USA Today blared "Need Health Insurance? Good luck". The gist of the article was about study by Gerogetown University for the Kaiser Family Foundation that submitted applications for private health insurance for seven hypothetical Americans to nineteen different insurers in multiple states. One of the most stunning findings what that every one of the applicants was turned down, at least some of the time, and could not get insurance coverage.
The HIV positive applicant was turned down every time, leaving no option but public funding such as Medicaid. But, a 36 year old, non-smoking lady who exercises regularly was also rejected as "high-risk" because she had filled a prescription for Claritin on a regular basis due to allergies. The impression created was that insurers are becoming increasingly conservative in who they will accept as policy-holders, presumably due to their experience with high-cost treatments for catastrophic illnesses.
This is a thorny issue because some states have recently started forcing insurers to cover a wider range of conditions and patients. The unintended result is that the cost of policies for everyone is substantially higher in those states than in neighboring states, as the risk is spread among the entire insured population, so many people cannot afford any insurance at all.
The second article, published about a week later in my local paper, had this headline: "Dentist's group sues Aetna on payments for service". This referred to a recent lawsuit filed by the American Dental Association against the nation's largest managed care plan alleging the use of faulty data to reduce payments to dentists. It argues that, if the patient's has prepaid for coverage in a policy that promises to cover "actual charges", the insurer cannot legally discount the dentist's fees and pocket the difference.
This article goes on to note that the American Medical Association has formed a litigation center to help doctors in their struggles with insurers. It is disconcerting to many of us in health care to be in an adversarial position with the folks who reimburse our treatments, but it is untenable to quietly allow reimbursements to be lower each year.
The third headline, "HMO ax drops on Medicare, US says" is by a writer for the Los Angeles Times. He notes that many HMOs are expected to drop out of higher cost urban markets such as LA and New York when their Medicare carrier contracts expire on September 17, due to recent changes in reimbursement methodology that reduced the increase in payments to metro areas so more could be diverted to rural areas. Many rural areas in the US have lost hospitals and physicians in recent years, in part due to changes in the Medicare program. So, the notion that "HMOs can run Medicare more cost effectively than the government" has not fared well in the real world.
The final headline, also from USA Today, at least provides an explanation for the previous ones: "Aetna's losses far outstrip Wall Street expectations". Aetna recently reported a second quarter loss that is triple what analysts expected, and their stock plummeted from $36 to under $26 immediately. Any responsible publicly-held company must do whatever it can to maintain stock value and to provide shareholders with a reasonable return on their investment. Unfortunately, if your business is healthcare insurance, one of the most effective short-term ways to do that is to really throttle down on approvals for care. We may not like this strategy, but at least we can understand it as independent businesses who must also retain enough income to survive in the marketplace.
I suspect that such thorny reimbursement issues will remain one of the most troublesome aspects of clinical practice in years to come. It would be great if we could find some brilliant solution, but thus far I haven't seen any that really seemed to make sense in the long run. As a patient advocate, I want P&O clients to receive the care they need that has been prescribed. And, I expect appropriate candidates to receive modern technology even though it is more costly in the short run than alternatives that were state of the art in the previous century. The real challenge is to figure out how we can do this in a finite and stagnant economy, without driving the costs for care so high that more and more people are left out and forced into taxpayer-funded programs such as Medicaid.
Food for thought....
