Wednesday, February 27, 2008

Res Ipsa Loquitur

Having nothing but time on his hands like any law student, esteemed reader Patrick sent me a link to a pdf containing the arbitration brief of a recent and widely publicized case. Far be it from me to beat a dead horse, but it seems a tidy argument for finding a way to provide health care without the need for dozens and scores of insurance companies. (And as an aside, a look at why, to some degree anyway, I've always been sort-of attracted to law as a profession: the orderliness, the linearity, the need for factual and logical thinking. Sometimes.)

The case is that of a woman who, despite having perfectly good health insurance, was approached by a (predatory?) guy wanting to sell her a less-expensive policy. Forms were filled out. She evidently thought it was going to be some sort of automatic transfer, rather than an application. At some point, the number for her weight had been changed on the form; the change was initialed by the agent, not by the woman. The form went forward, the insurance company reviewers noted the change but did not raise questions at the time, at least not to the woman. The old insurance dropped, the new policy established. Then she got breast cancer. Ostensibly because of the weight-change shenanigans, the insurance was canceled. Claims and counter-claims were made, and the case went to arbitration by a retired judge. (My dad was a judge, and when he retired, he was a much sought-after arbitrator.) (There's no real point to that interjection other than the fact that I always enjoyed hearing him discuss the process and the issues.) The result was a decision in favor of the woman, to the tune of several million dollars.

One might see the case as less about bad old insurers than about fine points of insurance law. In the brief, there was much about "due consideration" and "good faith" and various quite particular minutiae, from which one might or might not generalize. But one fact struck me as very important beyond the case at hand: employees of the insurer are paid, in part, based on how many claims they DENY; how much money they save for the company. They get bonuses for that. (Outrage mine.)

Just good business, some would say; and at some level they'd have a point. But that's exactly the problem. Having insurers sitting between providers and patients, taking money from both -- inserting the business of business and creating a whole profit-making/money-sucking ("non-profit" or not) enterprise that has nothing to do with providing actual care -- seems an obvious and unnecessary waste of health care dollars. Particularly when the business thus inserted clearly -- because its business is business, not healthcare -- has the aim of authorizing the least amount of care that is possible.

Most doctors hate the idea of a single-payer health care system, and for many good reasons, most of which have to do with concerns about loss of control. Of care decisions, of pay. I share them. But there can be no doubt that the system as now constructed in the US diverts huge amounts of dollars to companies that have nothing to do with actual care, and even -- as we see here -- to funding their efforts not to pay for it; and the amount is way more than would occur with a single payer and a single set of rules, aimed at paying for care rather than trying not to.

I've made it clear how disastrous I think is the trend, especially in Medicare and Medicaid, to pay providers less and less; how it will lead to huge access problems and changes in the sort of people who choose to become doctors. About that I have no illusions. But I don't think "single payer" and "cutting pay" and "onerous rules" need to be synonymous. For one, there'd be more money to work with. And it simply can't be totally impossible to find an operating model that would include providers in a meaningful way to set up and govern the execution. Improbable, maybe, but not impossible; unless politics as usual remains politics as usual.


Patrick Bageant said...

Hey, thanks for the kind words. But couldn't you have found a younger, less creepy looking dude under whose face to put my name? Maybe with a wider tie? I realize it's not supposed to be a picture of me, but you know how people assosciate . . .


(Only kidding)

I'm with your conclusion 100%. It blows my mind that health, something with which everyone can identify, is an area in which we accept so many compromises. We can topple governments on the other side of the world, shoot satellites out of space, peek inside the human genome . . . but we can't design a system that doesn't incentivize people to screw each other out of access to breast cancer treatment?

Come on.

I would be laughing about our ineptitude, except that (to me) access to care, like any issue where one group of people holds the power of life and death over another group people, is an issue with a significant moral component.

I don't think it comes down to disagreement over the end goal. I think everyone agrees what the end product should look like -- everyone gets access to care. The stumbling block seems political. I sometimes wonder who would be the biggest lobby against the kind of system you propose: the AMA, the insurance industry, the legions of trial lawyers who make their money by leeching off the very places the system is broken? What odd bed-fellows THOSE groups would make!

Whew. If I'm not careful, I'll get all worked up before I sit through class all morning -- never good!

Sid Schwab said...

patrick: surely you're not so young that you fail to recognize the greatest lawyer of all time, the one that never lost a case, nor even needed a jury to wait for a verdict; who produced a confession from the defendant on the witness stand, always?????

gay CME guy said...

Being more of a consumer of healthcare than I'd wish, I concur completely with your comments. I received monthly IgG infusions for CVID. Every year, I (my doctor's insurance/billing person) has to reapply to determine whether I'm going to receive the treatment for the next year. This is unnecessary added stress, which certainly impacts my overall health. Right now, I know I'm one of the 'lucky ones'. But that could change at any time.

Patrick Bageant said...

I'm too young for Perry Mason, dude . . .

gay CME guy said...

I do have to admit, it is kind of a creepy looking pic of Raymond Burr (aka Perry Mason).

rlbates said...

Patrick, that was a compliment--associating you with Perry Mason!!!

Nice post, Dr Sid. I caught that story of that woman too. Sad that their job is to "save the company money" rather to "provide coverage for their clients".

Anonymous said...

I think figures like her settlement are too high, and yet they seem to be necessary to try to teach the insurers, under the present system (which I so hope gets tossed) that it is not cost-effective to deny needed care. I know my previous insurer denied a lot fewer claims after a nationally-publicized suit that they lost, and lost bigtime, financially as well as prestige-wise.

Anonymous said...

Nice post - I wish the person who got paid to come up with all the "Loop Holes" in our Insurance policies would have been paid to put all his energy into something more useful - Like "World Peace"

Anonymous said...

A few years back I had to have oral surgery. The insurance company wanted to know if the teeth were "sound teeth" before the injury (sports). My dentist sent x-rays of my teeth before the injury and all the documentation that had been requested. The insurance stated the surgery was not necessary. The oral surgeon then sent a letter. Still denied. I later found out that a OB/GYN was looking at my dental x-rays/information. Wrong end. After the involvement of the state insurance commisioner the insurance approved the surgery. Later I needed knee surgery and went thru the same thing. Except a dental hygenist was denying the claim. Now I need gallbladder surgery and the insurance sucks!! They went with a new policy the first of the year and took more out of my husband's (surgeon works for the hospital) check. Could we pay out of pocket for it? Yes, but it is a matter of principle to me. We pay for something that they(employer/insurance) now don't want to provide the service we paid for!!So I decided to put it off for a couple of months. (moving for new job with better insurance). I'm now considering genetic testing (breast cancer). Yet, I need to make sure all my ducks are in a row before I can do so. Who is going to be making life decisions for me? Hopefully me and my husband not some person in a cubicle receiving a bonus to deny a claim for me.

Anonymous said...

Re: the last comment by anonymous.

I wonder if anyone has ever attempted to sue for malpractice the insruance co. employed physician or nurse provider who denies approvals for stays and services when it clearly is not within the scope of practice or even is within the professional practice experience - recent or remote - of the service denier. I can't see where approving or denying surgical approvals is anything BUT the practice of medicine (it sure isn't nursing - speaking as a nurse).

My biggest claim to fame was securing a pre-authed inpatient adult psych bed on a Friday night - took me 21 calls to twenty one facilities before I got the bed - and add to that over twelve calls to get the full pre-auth (the util. review nurse wanted to give me a pended auth only and that wouldn't secure a one day LOS aproval). Talk about painful! I started at 7:30 PM and left at 1:30 AM - after the ambulance left with the patient and a last call to the receiving facility that they had confirmed the approved bed. And indeed, it wasn't my job, the case managers were long gone, the physicians had left for the day, and the nursing staff was running "hot with lights and sirens" - very much understaffed with high acuity patients. A suicidal patient, manicy with uncopperative family, one of whom was an attorney threatening to sue us (me, since I was the face of administration) for the involuntary confinement just added to the atmosphere. Sheesh-

Patrick Bageant said...

Anon @ 5:21:

Your timidity about DNA testing and insurance is not unique -- three days ago the NY Times ran a story on that very issue:

"Insurance Fears Lead Many to Shun DNA Tests"

Re. the malpractice ting: I'm sure that if it can be done, some plaintiffs' attorney has figured out how! With that said, a I just conducted a very, very cursory research session, and found nothing very suggestive on the matter. (I did find a gem of a 1993 Indiana case in which an insurance agent met a car accident patient in the ER as she exited the lobby, and tricked her into signing a release of liability by telling her it was a receipt for a check!)

It looks like almost invariably, people sue their insurance provider in breach of contract (like the plaintiff did in the case Sid posted) and not malpractice on the part of the individual claims adjustor. That's probably first and foremost because the insurance company has a nice deep pocket, and (especially in clear-cut cases) an incentive to "cash out" and settle rather than pay to go to trial and risk setting adverse precedent.

Secondly, it may not be the case that when a doctor or a nurse reviews a claim for an insurance company, they are actually practicing medicine. Weird as that sounds, when they screw up, one way to think about what happens is that their error is administrative. Its effect is that insurance company breaches a contract, not screws up in a medical way. That's not quite the same thing as the doctor or nurse delivering negligent care themselves.

Don't take any of that as legal advice, by the way. I'm just a schmuck. If you get pushed over a barrel by your insurance company, hire a lawyer and ask him/her if you can sue anyone in malpractice . . . . then get back to me! This inquiring mind wants to know!

Cathy said...

It is not just private ins. companies who give bonues to employees who deny or reject claims.

When I had first applied for my social security disability under SSD, I did not know our govt. was so unfair and that truth meant nothing. My initial claim was denied and that denial was full of outright lies. In fact, it was like I was reading someone elses claim, because almost nothing in it pertained to me or what I had filed on.

It was then that my attorney informed me they (SS employees)were paid on each claim they deny. These are the very people who you trust with all your medical records, and believe will make a fair decison based on the actual facts and evidence, within your records.

Facts and evidence mean nothing to these people. I did prevail, but I will not forget this lesson learned.

I sometimes think the older we get, and the more experiences we have, it all becomes very unfair to us. Its a big shock when you take off those rose colored glasses.

Cathy said...

And how old am I? Old enough that I think that picture of Raymond Burr looks really good!

Anonymous said...

I was very fortunate that my husband fought the fight with the insurance companies over my mouth and knee. If he didn't deal with it daily would we have pushed the issue? What about the people that just accept their fate? What laws/requirements are there to obtain these jobs? Would a single pay system keep the same thing from happening? According to a previous post it looks like not. Sorry to be so down and out but I don't know who has the answers to fix such a huge mess.

As for the genetic testing I'm very concerned with the way insurance companies label "pre-existing condidtion". I've even got to update my life insurance before the test. If I had not spoken with those who have already had it done then I would not have this information. Yet, no matter what I'm having it done for me and the future generations of my family. Right now many insurance pay for gastric bypass because it is cheaper then dealing with the complications of obesity. So what is the difference if my DNA test can me give preventive measures? It just might be cost effective.

Anonymous said...

Patrick: Thank you the NY Times story. It moved me to tears. Way to many people have died in my family for me not to take the risk to possibly save the lives of my kids, my brother, nephews, and nieces. I'm the only one who can financially afford it and the financial risk involved.

Patrick Bageant said...

Cathy --

It gets worse when you get older?

Uh-oh . . .

You know, I just wrote a long blustery comment about how angry the health insurance industry makes me. Luckily my cooler head prevailed, and I deleted it.

The bottom line is that nobody is looking out for consumers or getting bonuses for cutting their cots, and any negotiations that do arise take place AFTER those consumers have a big old bill hanging over their head. Call me crazy, but it's not really even a "negotiation" if they have you by the balls from minute one. It is more like a steady series of painful compromises.

Add to that an information and education gap (you don't spend all day, every day, for weeks on end, examining insurance claims -- but your claims adjuster does!) . . .

And add to THAT no real oversight (not everyone has the money/time/energy/confidence to hire representation) . . .

And add to THAT the fact that people who get into these situations are often also dealing with serious personal problems, like, being in the hospital . . .

What you get starts to look (to me) like a moral outrage! This is an entire industry!

I am thrilled that 5:21 went to the state insurance commissioner. That can be a only reliable, cost free way to get help, yet many people don't even know it's an option! If you ever get into a bind and can't hire an attorney or just want to learn what your options are, their office is a good place to start. It's part of what you pay taxes for. Another option to try, if you start to feel trapped, is free legal aid clinics, which you can find pretty much everywhere, if you know where to look. They often consist of law students with attorney oversight, so getting in touch with the nearest law school can get you started. There is (supposedly) an index here, but I'm not sure how complete it is. . .

Anonymous said...

Did you see The Incredibles? The scene in which Bob (working at his insurance job)tries to help a client and his boss starts screaming at him: "What about our shareholders, Bob!? Who's taking care of our shareholders!!?"

The comments about Social Security scare me. Scenario: government funded health care: goes over budget--someone gets a bright idea to "save taxpayers' money" i. e. claim auditors (paid by the denial, of course!) Frighteningly plausible.

Anonymous said...

People will call me naive for this, but hear me out... As a member of society, we have given away our right to decide what we should with our own health care to the insurance company. These companies, unfortunately, are not working for our advantage. Their true clients are their sharholders, not us. It is their job to show their sharholder that they are making money. So who should take care of ourselves? Us!
I think it would be better if we do not have insurance at all, save the money and put them in the market/stock/CD, etc etc.
Now, I understand that most people will not be able to pay for their medical expenses. Now if you think about it, the reason these mdeical services are expensive is also because insurance companies has dipped their hands in it by providing for liability insurance for the hospital/ clinics/ doctors.
Solution: Medical care Co-op.
Have a hospital with patients who pay a premium. Only those patients can go there and get treatments. No ER obviously. I can discuss the utility of ER in a society,but maybe not in this comment forum. The services in this hospital will likely be cheaper than our regular hospital because we will be eliminating the middle man, which is the insurance company. There should not be a federal regulation on this, as this coop will most likely not suit everybody. But I think people who wants to avoid dealing with insurance company should be able to do so.

Patrick Bageant said...

. . . what if the co-op operated on a national scale, the premium came from taxes, and all hospitals participated?

Strikes me as enlightened, not naive. People in every other democratic country on the face of this green earth would agree.

Anonymous said...

And then the government could extract cost savings by constantly cutting health care worker salaries (since where the hell else are they going to go?). And if that troublesome professionalism aspect gets in the way of government mandates, you can stick it to them in the media!

After seeing what the UK government has done to their physicians I would seriously find a new profession before working in such a system. The government negotiated a poor contract with the GPs so it began a smear campaign against them in the media and announced it would unilaterally change their contract (and best of all, much of the excess expense was because the physicians were hitting their clinically useless but government mandated "quality targets" too much!). Single payer is quite literally the death of the idea of an independent profession; best to escape early before they start turning up the heat and the rest of the frogs start trying to jump out of the pot.

Anonymous said...

in response to patrick's comment:
no, nothing in national level... Because then, we are still relinquishing the power to a third party. We should take care ourselves, hence the co-op. In this system, we will not try to cheat ourselves by providing a so-so health care. In a co-op, the profit is divided amongst the members and/or be given back to the co-op (hospital)as more money to expand (buy more equipment, etc). So it's silly if the hospital is trying to cheat/ cut corners on the patients (via treating doctors/nurses like dirt) because the bad result will go towards the patients anyways (in a more straighforward manner than what we do to our own health care right now, or the UK)
I hope i'm making sense....
But this system can only work in a small scale. Never go on public trading (you can't anyways if it's co-op). Nobody should be "forced" to be a member. This is important, because only when it is free-will based, would the members feel that they belong. This feeling on belonging is important to avoid abuse of the co-op.

Anonymous said...

I treated a kid recently who's father was a local ER physician. In addition, he was part of the administration of a local insurance group. I'm not sure if he was the medical director, but regardless, he was on the board.

As the cost of the care of his son continued to escalate, the insurance company started to find more and more creative ways to start denying coverage.

I wasn't that surprised, we see it all the time, but I think he was a little shocked.

As I read somewhere, (here maybe?) we in America live a cancer diagnosis away from bankruptcy.

Savage Henry said...

I would like to see insurance companies take a cue from Google. Google's corporate motto is "Do no evil."

Doing "no evil" has transformed the internet for the better, and still made the folks at Google tons of money. Everybody wins.

It seems like many insurance companies view patients as merely resources, instead of providing value to the people who buy their policies. I believe if an insurance company truly changed it's corporate DNA to providing value and doing no evil, they would be hugely succesful and provide a great service to healthcare.

Great blog, Dr. Schwab!

SeaSpray said...

Perry Mason!

I remember him from when I was a little girl playing with my toys on the floor and my family faithfully watched him every week. Thursday nights?

I know of someone who developed a debilitating complex-mal epilepsy. Cracked his car up, had to surrender his license, eventually lost his ability to work and was denied disability even though doctors backed him. He had been a productive member of society and was a family man. he had gotten hit in the head by the ladder when at a fire he responded to with the volunteer fire department. one made the connection until years later. i don't know why.

After he moved up here into an was a nun who was the neighbor above him that noticed how frugally he lived. She said this isn't right and acted on his behalf and was able to get him on permanent disability. Anyone could have looked at his records to know he deserved the disability. And like someone else mentioned here ...what about the people that don't know enough to fight for a claim. people are taken advantage of is what.

About the co-op. Have participating members that contribute in some way (volunteer services) over the long haul at a cheaper fee but allow people to use facility that don't want to be members at a higher fee.

Really though...just want my insurance company to be fair and be there when I need them.

It's that middle man stuff the CEO pockets thing that is the conflict of interest.

What if all doctors united and pulled out of every insurance company? Some doctors have already. It scares me as a pt to say that because then it will cost me more. Something has to jolt the system as it is. It is wrong when people get bonuses for denying claims that are valid.

***I think that once it is established that a patient or provider was wrongfully denied then I think the bonus should go to the provider or patient or both. In other words there needs to be a system where there are checks and balances. Maybe the government should step in here and say, "Okay, if you are getting bonuses for denying claims then you better have good and just cause with documentation because if you don't and the pt and providers can establish other wise...then YOU insurance company shareholders will receive a penalty that goes on record. And YOU insurance shareholders will then pay the bonus to the providers and the patient. And if YOU insurance shareholders have too many penalties against you you will also pay a heavy fine that will go into the general pot to help pay for the uninsured." Or whatever would be a good medical cause donate those fines to.

Just seems that conflict of interest has to go or the playing field should be made equal.

Anonymous said...

Sorry Patrick, and Dr. Sid, that was not a brief, if was the arbitrator's written statement of opinion.

Bravo to Ret. Judge Sam Cianchetti (whom I have appeared before on mediations) who had the courage, chutzpah, whatever description you chose to use, to penalize the Insurer in the only method that might, and I say, might, get them to change their despicable post-claims underwriting practices.

As a post script; this was Cianchetti's swan song, he retired from the mediation service, so he went out with a decision that hopefully, will cause a few senior underwriters, case managers, and claims persons to pause the next time they pull the plug on a desperately ill insured mid-way through treatment. Bravo to Bill Shernoff's office for this victory.

As for universal health care, talk to a few Canadians, it is not all it is cracked up to be; there are delays of years for elective surgeries, and the system does not necessarily foster the type of creative and intelligent competition that produces gifted physicians. But, there needs to a pervasive overhaul of the current system, that places the medical treatment, prognosis, and future of insureds in the hands of those who lack any meaningful medical training, and whose goal is to maximize corporate and personal profits, all to the detriment of the unwary consumer.

Sid Schwab said...

Sorry, anonymous, but "single-payer" and "Canadian system" are not synonymous. There's no reason why the problems of one have to be included in the other.

And it was only I, not Patrick, who referred to the document as a brief.

Anonymous said...

Re: Your comments; they may not be "synonymous"...and if you have an idealized system, let's hear about it. I was merely giving an example, that one could wrap their head around, that the salvation of medical care in the United States is not necessarily a "single payer" system.

Only when the insurance companies are penalized for putting corporate greed and the bottom (profit) line before an ethic of care for their insureds will there be a shift in the balance of power. Although there has long been historical enmity between physicians and attorneys, their interests are more closely aligned now then ever before with regard to this issue. It is time for these two professions to unite in their efforts to bring about sustainable health care reform.

Certain current political presidential candidates have made health care reform a mandate; we'll see post-election whether this is campaign rhetoric or not.

There is an ongoing emergent crisis in medical care coverage, and all aspects of that including cost containment, which impacts treatment. Having experienced health care in one of the "impacted crisis states" and then, conversely, in the midwest, I was struck by the difference in what was offered to the patient/consumer under the same insurer coverage (meaning same policy). So the problem is also complicated geographically.


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