Insurance Companies Assault

The Assault on Patients and Physicians: Big Business Steals Time and Money from Patient Care

(Please note: this opinion piece is just reflective of  Russ Kridel, MD personal opinion and is not the opinion or policy of any organization or association.)

Part 1—THE INSURANCE INDUSTRY

It’s nothing short of outrageous! Medical care used to be about getting patients well; there was a one-on-one relationship between the patient and the physician, and the majority of every dollar spent went towards that care.

Insurance Companies Policies and Practices Effect Patient-Physician Relationship

Then the insurance companies decided that instead of providing their part as a bare bones pass through, they could royally profit from  their interface and generate multi-million dollar salaries to their CEOs and huge returns to stockholders by taking patients’ dollars, raising rates, co-pays,  and deductibles, and then denying to pay for their care.  Just a few weeks ago, one of those gouging insurance companies denied reimbursement to one of my patients for a medically necessary reconstructive surgery I performed, because they said the graft I used in that surgery was experimental. It didn’t matter to them that the use of that graft had been in the peer reviewed literature for over twenty years, that the graft used was the preferred graft by 60% of my colleagues by survey, or that one of the companies that manufactured that graft noted that particular graft was used in over 200 patients in the last year alone. The insurance company just basically decided that they didn’t want to fulfill their obligation to pay for a surgery that they had contracted to pay for; a breach of contract and a breach of ethics and fair dealing.

Insurance Companies Prior Authorizations and Appeals Reduce Physicians Time With Patients

PRIOR AUTHORIZATIONS AND APPEALS NEEDLESSLY DELAYS OR DENIES CARE

But there is nothing fair about the insurance companies: they gobble up physician time with prior authorizations and appeals that are totally unnecessary because by delaying or denying care their cash flow and profits improve. If they truly cared about time sensitive essential and efficient health care delivery, they would be pro-active in making things easier for patients and doctors, because, quite simply delayed care is not only more costly in the long run, but more damaging to the health of patients.

Recently, one insurance company tried to cut the reimbursement for a service if performed at the same time as a patient evaluation service. So if I did a biopsy on a patient right after I examined them, which would have been the most efficient way to treat the patient, I would only get half the fee for the biopsy. The only way for me to get my proper reimbursement for that biopsy would be to inconvenience the patient and make them come back on a different day! Thank goodness the AMA leadership intervened with one-on-one talks and got the company to back down.

But many don’t realize what routinely happens when insurance companies pay for multiple surgical procedures performed at the same setting; they pay 100% of what they have decided the first procedure is worth, but then only 50% of the next procedure done, and sometimes only 25% of subsequent procedures. So, for example, if I perform a nasal airway surgery and at the same time remove a skin cancer elsewhere on the patient, the insurance company only pays half of the routine fee for the second procedure, leaving the patient at risk for the shortfall.  Imagine if you went to the grocery store and bought three items; at the check-out counter you expect to pay the full price for each item. What would happen if you tried negotiating to pay only half for the second item and one fourth for the third grocery item!  The clerk at the register would call the manager who would come out and laugh at you and then soundly deny your request!

NARROW NETWORKS

But it gets worse. Insurance companies put some doctors under contract to accept lower fees in exchange for sending patients their way by then making that doctor an “in-network provider.” (Note: insurance companies don’t consider us physicians; they call us “providers,” insulting us by denying our years of training and professionalism. To them we are just commodities.)   The insurance companies then tell their policy holder patients that the patient will pay less in their co-pays and deductibles if they visit an “in-network” provider. But if the patients choose to see another doctor, the insurance company will pay that physician less and the patient is responsible for the rest. Sounds good you may think, but what the insurance company does is to pay so little to their in-network doctors that few physicians sign up to be in-network because they lose money and can’t cover their overhead on the payments from the company. Many physicians totally opt out and so the insurance company has created a “narrow network” that severely limits patient choice and may make patients drive many miles to find a doctor in-network especially in certain specialties. By establishing a narrow network, the insurance company often actually makes more money, because they pay the out-of-network doctor even less than their in-network docs, and the patient is left again making up the difference of the doctors fee.

Insurance companies cry that they are losing money on some insurance products, but one only needs to look at their published huge reserves and profits made on the backs of patients and physicians, not to even mention their executive salaries. In 2016, Centene’s Michael Neidorff’s total compensation was $22 million; Anthem’s CEO Joseph Swedish was paid $16.5 Million; ; Aetna’s Mark Bertolini took in $18.7 million; United Health’s Stephen Hemsley got $17.8 million; and poor Cigna CEO David Cordani took a pay cut and was only paid $15.3 million (Source: Leslie Small, Fierce Healthcare). If the average family health care insurance bill is $10,000 a year, the salary paid to Bertolini alone would have paid the premium for 1800 families.

INSURANCE INDUSTRY CONSOLIDATION

These companies are making every effort to drive profits higher. They are moving to consolidate their industry and create monopolies that decrease patient choice and physician reimbursement and increase policy prices for patients. The AMA was instrumental in convincing the Justice Department to stop the planned mergers of between Anthem-Cigna and Aetna-Humana.  If successful, the mergers would have reduced physician bargaining power to negotiate fair contracts.  It is estimated that the Anthem-Cigna merger alone would have resulted in $500 million in reduced physician payments annually. So valid were the points made by the AMA that the judges actually cited the AMA arguments in their decision.

But two losses won’t stop the for-profit incentives of companies that want to take an ever-increasing unfair and unearned share out of patient care dollars. More consolidation is on the forefront.  A few months ago, the AMA asked Congress to look at the proposed merger between CVS Health and Aetna.  The DOJ is now examining a $67 billion dollar acquisition by Cigna of pharmacy benefit manager Express Scripts. In fact, according to Healthcare Dive, more than 200 health care deals representing $72.6 billion were announced in just the first quarter of 2018.

IN SUMMARY

Big business may expand an economy, but not rightfully so in healthcare, where every profit taken out of limited health care dollars bites physicians and harms patients.

STAY TUNED for Part II: The Pharmaceutical Industry and the Pharmacy Benefit Managers.

Houston Facial Plastic Surgeon, Russell Kridel, MD, is currently a member of the AMA Board of Trustees. Any views expressed on this blog should be considered personal views of Dr. Kridel and are not official statements of AMA policy (which is set by the AMA House of Delegates) nor are they official descriptions of actions of the AMA Board of Trustees.

 

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