Wednesday, February 13, 2008

A Tough Medical Ethics Problem for Health Insurance

WellPoint, the company that operates California Blue Cross, is in a battle with California physicians over the pre-existing conditions clauses in insurance policies. An informative Los Angeles Times article shows how our dysfunctional health care “system” creates a three-way game of chicken in which insurees' rational self interests, physicians' ethics, and insurance company responsibility for cost containment, inevitably collide. Everybody loses.

Health insurance is so expensive that individuals are tempted to gamble that they won’t need it. Rational self-interest points to forgoing insurance when we are healthy and getting it when we are sick.

But our “system” asks insurers, whether for-profit, like WellPoint, or not-for-profit, like Kaiser Permanente, to control costs, in addition to paying for necessary care. Part of controlling costs is discouraging “free-ridership” – taking out insurance only when the need arises. The noxious exclusions for pre-existing medical conditions exclusions are necessary for playing the insurer role in our health “system.”

Blue Cross of California is sending physicians copies of health insurance applications filled out by new patients, along with a letter advising them that the company has a right to drop members who fail to disclose "material medical history," including "pre-existing pregnancies." The peremptory-sounding letter tells physicians that "any condition not listed on the application that is discovered to be pre-existing should be reported to Blue Cross immediately."

For physicians, caring for individual patients is their primary commitment. The president of the California Medical Association says "we're outraged that they are asking doctors to violate the sacred trust of patients to rat them out for medical information that patients would expect their doctors to handle with the utmost secrecy and confidentiality,"

Anthony Wright, executive director of HealthAccess California, a healthcare advocacy organization, says WellPoint is “playing a game of 'gotcha' where they are trying to use their doctors against their patients' health interests…That's about as ugly as it gets."

So WellPoint is the bad guy. Right?

No - wrong.

Our “system” asks insurers to control costs. They can’t do that if we are allowed to eschew insurance when we are well and buy it when we become ill. We shouldn’t blame insurers when they do what we ask them to do.

Of course, insurers can game the system in unethical ways. It is one thing to block free-ridership by not allowing individuals to (a) choose not to buy insurance, (b) apply for it when ill, and (c) fraudulently choose not to reveal the fact of illness. But California companies have gone beyond disenrolling individuals who knowingly commit fraud (technically called “rescission”) and appear to have used technicalities in a “gotcha” manner to avoid paying claims.,1,1624594.story?ctrack=5&cset=true

The moral of the California story is that we can’t control costs in our current system. As insurance gets more expensive, more individuals will choose to go bare. Insurers will continue to monitor for fraud, but will also be tempted to disqualify non-fraudulent applications for technical errors. Physicians will resist blocking their patient’s access to coverage, even when the coverage was obtained by fraud.

Our current approach to the California conundrum is to mandate that individuals obtain coverage. We are in the early stage of experimenting with that approach. If the mandate system doesn't work, some form of Medicare for all is the logical next step.


GhostOfTyrone said...

Hi Jim,

I see an additional benefit to these practices. I agree with you that it is incorrect to cast guilt on the insurance companies in this instance, as it is quite easy to make the argument that these are cost controlling measures. It is cost control that, for better or for worse, has become the focal point of health “care” reform. By asking insurers to control cost, the indirect order of streamlining care is also given. Naturally, eliminating “free-riders” and those other individuals deemed to be defrauding the system would be a primary source of cost relief. It can be agreed then, that this move makes sense fiscally.

I also see a greater, more encouraging trend here. By approaching physicians in this manner, Wellpoint (and other insurers who adopt this practice) are taking a large, albeit indirect step in the direction of transparency.

As your post also points out, it is going to take a good deal of inter-industrial collaboration and cooperation to set into motion effective and permanent cost controlling measures. By removing barriers and facilitating requests such as these (so long as they comply with privacy laws, i.e. HIPAA), the entire industry will be making the move towards greater efficiency while at the same time making substantial cost gains. This has corollary effects, as well, such as improving access to care.

It is no secret that further government involvement in the healthcare system is an increasingly realistic possibility. While not necessarily a bad thing, this regulation will of course be met with resistance, most likely on every front. I have advocated before for the introduction of regulations that require and enforce high levels of cost transparency across the collected industries. By taking steps like those referred to on your post before such regulations take place (if, in fact they ever do), the difficulties during a transition will be made all less drastic, if even more positively, all the more unnecessary.

Jim Sabin said...

Hi Ian -

Thanks for your thoughtful comments. I hope that you are right about the encouraging trend. I agree with you 150% about the need for collaboration, and spoke about that theme in the post that follows this one.



eric said...

Jim--The job of primary care physicians is often vexing and distasteful because we are called on to be policemen most of the time. True, a teacher must be a disciplinarian, as far as setting limits, but it gets ridiculous. So PCPs are leaving practice. We are asked to fill out return-to-work forms, fitness for adoptive parenting forms, disability claim forms, etc., etc. We already get request for medical records forms from health insurance companies; I don't know why they have to ask us to re-review the records for them, as Wellpoint has done, according to your post.
To give some poignant (I think) examples: Once I filled out citizenship forms for an elderly couple who wished to emigrate to Canada, where many relatives lived. They had signed a release form for me to fill out the form. There were questions about their medical history, including alcohol abuse. I believed that I had to answer honestly. They were denied citizenship and stayed here. I think now that I should have filled out the forms as many physicians did in the Viet Nam era, to keep their patients out of the draft. For another example, I have filled out forms for prospective adoptive parents, who, in my heart, I shuddered to think of as parents. Yet these people were in the mainstream of society, and I answered that, yes, in my opinion, they were fit to be parents. --Eric

Jim Sabin said...

Hi Eric -

Thanks for responding to this posting from the perspective of front-line primary care practice.

I would separate two issues here. I think we need a national rescue program for primary care. We place ridiculous expectations on PCPs and pay them, by standards of other professions in the US, very poorly. If we want a robust primary care sector we will have to change the working conditions for PCPs.

Some of the social processes you mention, like screeing would-be adoptive parents, are important, but do not require PCP participation, since PCPs do not have distinctive expertise for providing that information. For some, like disability forms, however, the PCP is crucial. As a psychiatrist I never minded filling these out when there was a true disability and I was being asked to tell the truth. But when the disability was minor or even non-existent, it was a not an appealing use of time! I tried to be 100% truthful with my patients, as in saying "I understand that you would like to have disability income, and we know you are short of money. Happily, your health is not actually that bad, but unhappily that means that my letter is not likely to do the job for you. What shall we do?"

The example of the couple wishing to go to Canada is moving. I believe that we should tell the truth in circumstances like the one you describe. If the alcohol abuse was current and active, we could advise our patients that having us fill out the form might block them from emigrating. But if the alcohol abuse was in the past, we could write the report emphasizing the fact of remission, and advocate for them. I have had to do this for patients seeking life insurance who (a) have had depression in the past but (b) have nothing in their history suggesting increased risk for death by suicide.



Unknown said...

What are the various types of health insurance programmes that are available to me, and which is best suited to suit the needs of my family and myself? How do I choose the ideal health care plan? What are the major points that one needs to bear in mind while buying Health Care Insurance Policy?

Jim Sabin said...

Hi Dallas Health -

Alas, in our VERY fragmented US health care system, it is almost impossible for me to answer your very important question, as I don't know what geographical area you are in, whether you have access to employer insurance, or whether you are eligible for any public programs. But for any program, you will want to know (a) what benefits it offers, (b) what the financial costs are, both in premiums and deductibles, and (c) whether it has any strings attached, like exclusion of preexisting conditions. The Department of Insurance in your area should be a source of information for you.

Good luck!


Unknown said...

Health insurance is very important to every employee. Management has to provide Health Insurance to there employee.To reduce the Health Insurance problems Ethics is providing many facilities to all the people.


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Jim Sabin said...

Hi Martin

You're right that health insurance is very important to every employee, as well as to all others. In our strange non-system we have made employers responsible for the ethical responsibility that all societies have with regard to health care for the population. We're stuck with that system now, but taking that route was probably a mistake, compared to other ways of providing insurance to all.

Thanks for your concern!