Managed Health Care: Gambling on Coverage to Save on Costs

Kathleen Flynn

Spring 1997

Editor's Note: Some of the major points of this article were inspired by an article from the Chicago Tribune by Joan Beck. All of the other opinions are the author's and do not necessarily reflect the views of CFRI.

According to a recent study, 75 percent of American workers currently receive health insurance from some form of managed health care plan. Employers and other insurance providers offer employees these health care choices in an effort to contain the burgeoning costs of health insurance and to reduce the increasing percentage of the nation's income spent on medical care. Millions of Americans have been financially squeezed into foregoing more traditional and comprehensive health care coverage and instead must choose from Health Maintenance Organizations (HMOs), Preferred Provider Organizations (PPOs), and Point-of-Service plans (a plan that gives you a choice between preferred providers and the physician of your choice, although coverage is significantly less if you select "out of network").

This trend has cut the growth of employers' costs for health insurance to less than three percent annually since 1994, after years of double-digit increases. Costs are cut by restricting the doctors that patients can see, limiting the amount physicians are paid for services, providing financial incentives to doctors and medical facilities for minimizing the cost of the care, setting contract prices for services, drugs and medical equipment with hospitals, clinics and pharmacies, denying certain forms of medical treatment and emphasizing preventive health care.

It was imperative for our nation to acknowledge and respond to out-of-control health care costs. But widespread changes in a very short time have led to irresponsible policy- making as the control of the system has fallen to administrators whose primary objective is cost control, not the health and well-being of individuals. As managed care is here to stay, it is imperative that health-care providers and consumers insist on the level of care necessary for healthfulness.

This means that patients and health-care consumers must take the time to complain, vociferously if necessary, when managed care limits access to or reimbursement for necessary treatment. People with any kind of compromised health condition often are at the mercy of the organization's rules which are primarily designed to serve people who are well. Personally, I have experienced three or four different managed care options, and I found they count on patients to not question coverage and reimbursement decisions. In sorting out insurance nightmares, it is essential to keep detailed records of who I talk to and when (both insurance claims clerks and physicians). I can then use these records to prove that I tried in good faith to follow their rules. Even still, the rules are often so complex that two employees might respond differently to the same claim.

I noticed recently I was being reimbursed at a reduced percentage for specialists we had been seeing for years. When I complained, at first I was told that I had seen specialists without the permission of my primary-care doctor. I told the claim worker that I had been informed that their policy had changed and that I no longer needed permission to see in-network specialists so long as my primary-care doctor was aware of my child's condition and what plan of action I was taking (I noted who I talked to, who my doctor talked to and the dates of these conversations). The claim worker then told me that I must not have seen in-network specialists. I told her that the hospital I had chosen was an in-network hospital and that for many procedures the patient does not get to choose who performs a procedure (e.g., X-ray technicians, pulmonary function diagnosticians). Still, the claim worker could not find the names of the health-care workers in her list of providers and so could not alter the claims. When I went back to the hospital and got proof of the providers' identities, employment, and the hospital's contract with my HMO, the insurance company backed down. Despite the time and effort these battles take, I feel it is imperative that we as consumers stand our ground. It is wrong for HMOs to routinely resist the use of specialists by denying claims or reducing reimbursement. It is wrong for a claim worker with little or no working knowledge of disease or medical history to be deciding whether or not I can see a specialist. And it is foolhardy of them to presume that the primary care physician can meet the needs of the patient who is in need of a specialist.

When permission was denied for a visit I felt my son needed, I protested verbally and in writing, and then asked his primary care physician to protest. With specific illnesses, like cystic fibrosis, it should not be difficult to persuade the company that the person with CF must be seen at an accredited clinic. When insurance companies question the fees the specialists are charging, we must explain that their fees are within the range of customary charges for a doctor of an accredited CF clinic.

But it is more than just the patients' and their care-givers' responsibility to confront the abuses of managed care. Physicians must be given the responsibility and authority by their institutions, clinics, hospitals, physicians' organizations and government bodies, to stand up for their treatment plans and their patients. They must be able to insist that their medical instructions be followed even when cheaper alternatives are available if the physician feels that these alternatives are lacking. Employers who have been offering employees these managed-care options as a means for controlling the costs of health insurance have much more power than most people are aware of. With power comes the responsibility of monitoring the plans they are offering. I suggest that employers send employees questionnaires to determine the satisfaction level with each plan and give this feedback to the insurance companies, with a warning if necessary, letting them know the employer will look elsewhere if its employees are not satisfied.

Employers should also set up a process for listening and responding to employee complaints. This is the only way for them to be aware of a pattern of developing neglect or abuse by the insurer. With the amounts they are saving on health care costs, they could surely afford to be vigilant about the quality of the health options they are offering.

Research and development of new treatments and medications will be cut in an effort to meet more basic health care needs of patients. Perhaps managed care corporations should be legally required to return a percentage of their profits for basic medical research. Managed care firms have been known to deny coverage when new expensive medications come on the market. Yet, bioengineering firms and pharmaceutical companies are trying to recoup losses invested to study disease and respond with treatments. These investments need to be encouraged.

Finally, despite their reluctance, our state legislatures and federal government must set up ways to support people challenging unfair decisions. To date, they only respond to the most offensive cases of wide-spread abuses--when politicians have something to gain. Luckily, we are all mortal--politicians, physicians, even health-care administrators. So we share our fate of aging, sickness and mortality. This is an issue that affects all of us. We must work together to curb abuses.

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