Insurer’s New Role: Managing Treatment

U.S.-Style Approach
Company seeks alternatives to expensive drugs

I was somewhat surprised to read the enclosed article authored by Tom Blackwell in the National Post on Thursday, July 26th, 2012. The subject certainly caught my attention. The reason? For as long as I can remember, insurance companies have always interfered in healthcare – from deciding which treatment in their opinion is best, which drugs are most appropriate and whether they should pay for treatment at all. My position has always been that people pay for insurance coverage and the insurance company should therefore pay for the treatment. Simple enough, but in an increasingly complex world, nothing is simple anymore. More significantly, the insurance industry and its minions are in essence dictating medical practice, which they are not qualified to do and the influence they exert may indeed be highly detrimental to the patient’s health status.

In essence, the article states that now Canadian insurance companies are following the footsteps of what is common practice for private insurers in the U.S. but virtually unheard of in this country. In my experience, practicing medicine for over forty years, this is a completely false assertion, as the nefarious practice of denying coverage has been prevalent in this country in numerous forms, from the time insurance companies have been in existence.

In addition, the article, as is so common in Canada, “bashes” the U.S. for its practices, which are deemed to be ‘mercenary’, rather than compassionate. For a period extending over twenty years, I practiced medicine in the U.S. and found conditions there, from a comparative perspective, to be generally more liberal and never experienced the interference that exists in Canada at this time. Needless to say, this situation has changed in all countries around the world with the rising costs of providing “quality?” medical care and delivery systems under the aegis of governments, insurance companies and other gatekeepers who strive to manage healthcare, unfortunately all too often to the detriment of the standard of quality once expected. Administrative costs go up, at the expense of funds available to actually deliver therapy to patients – a circumlocular and erosive practice.

But, back to Insurance. In too many instances, the insured have faithfully paid premiums for a period of several months to over thirty years, often without deriving any benefit from this so-called ‘protection’. Nevertheless, at the first hint that the insured may require some assistance, no matter how legitimate, the initial response of the representative of the insurance carrier is an almost reflex NO. The insurance salesman who has sold the policy to the client disappears after he has received his generous commission, which often continues for the life of the policy. Armed with policies covering home insurance, life insurance, disability insurance etc., the salesman ostensibly sells you whatever he can, in order to “protect” you against the many things that may at some point, strike one down. When the time of payback occurs, no matter how minute, the sales agent has long departed from the scene.

Several years ago, a mid-level bank executive, who happened to be my account manager, had purchased a $100,000 dollar policy from the bank for which he worked – no questions asked, in the event of a heart attack, stroke or other catastrophic episode. Over a 2 week period, this individual checked in and out of a hospital while sustaining two separate, severe coronary infarctions. It is truly amazing that he survived and so much for the intelligence level of bankers. Still, the $100,000 coverage, which was to be provided without question, was denied. The reason – ‘the enzyme’ profile of the hospital records did not coincide with the standard adopted by the insurance carrier. I think we all get the point. The insured was forced to hire an attorney who settled for $70,000, from which he deducted over $20,000 for his participation in this debacle. So much for advertising, integrity etc.

Historically, insurance companies love to collect premiums and hate to give up a nickel of their ill-gotten wealth at any time – particularly in the past decade, with the billions lost in the housing bubble, poorly structured investments and laboring under the bloated, undeserved salaries of senior management. Just like governments, increasing the tax base while literally putting small business out of existence, insurance carriers have followed a similar trend. Not a pretty picture – except for those who get the big salaries for making bad decisions and under-serving their clients.

In my personal medical practice, up to 80% of patients present with an initial complaint about the problems they have with the insurance companies – not the description of their illness but rather the hurdles they face in paying for healthcare.

Every day, I see a number of patients who have been denied coverage for treatment that should have been instituted immediately after the illness occurred or certainly in a more timely manner and may only be approved after a long wait time and not infrequently requiring legal recourse on behalf of the insured. This obstructive behavior pattern benefits no one. At all times, insurance companies have on retainer legions of specialists, medical assessors and other “hired thugs” to carry out the ritual of denial, on their behalf. Several weeks ago, I saw a patient whose insurance company spent over $20,000 on multiple assessments and in the end, was denied coverage for the treatment of a medical condition. With Laser Therapy, this patient’s problem was cured over 3 weeks at a cost of less than $1,000. By now, I hope that everyone is beginning to understand the problem.

Why does this state of affairs exist? The root problem is the combination of corporate behavior patterns and economics – invariably, a bad mix! The human factor may involve the lobbyist, representing the insurance company, collaborating with the political powers that are the incumbents of today or possibly those of tomorrow. By contributing to the campaigns of all political parties and candidates, regardless of stripe, the companies are virtually approved and immunized for whatever skullduggery they plan, which invariably is to their economic advantage. Insurance companies are all about making money and that is their primary objective. They do not care about the individual or their problems; indeed the latter are considered an impediment at best.

Politicians are devoted to campaigning, getting elected and staying elected. The alliances with big business carefully developed over decades, are clearly designed to the carrier’s advantage, coupled with the politician’s need to maintain their individual power base. The patient is generally forgotten. The coverage, sold to him by the super salesman, with unlimited clauses for denial hidden in the fine print, often is not worth the paper on which it is printed. The insurance company and their sales representatives make money; the politician stays in power and the patient ‘whistles in the wind’. Salesmen don’t really care what happens once they have made a sale and along with all the other players, are complicit in victimizing the patient, ie. the individual who has had an accident or has become afflicted with an illness, who in a time of need finds the support that he religiously paid for over many years – unavailable. In my mind, this is just another one of the scourges so prevalent in health care today.

Now, in order to relieve themselves of the stigma of enforcing the denial, insurance carriers plan to hire so-called legitimate “new companies” to carry out the hatchet job on their behalf, under the adage that this is impartial and protects the patient. This can hardly be construed as an event designed for the patient’s benefit. It simply removes the stigma of saying “no” from the insurance company. In essence, to protect the carrier’s economic position, a new “hired gun” will now perform the negative aspect of their premeditated actions. This measure is simply good PR and an easier way of saying no.

This entire scenario is neither new and definitely not American, even though Canadians have been conditioned to criticize the U.S. as a place where “everything is so much worse”. This is another falsehood propagated by politicians to make us feel better about being Canadian – a presumption that is entirely without justification. Both the U.S. and Canada are great countries with immense resources and many positive attributes, but the delivery of insurance policies as opposed to the delivery of quality healthcare and preserving the patient’s best interests, are definitely not part of that programme.

How can this inequity be corrected? Obviously the burden should fall on the shoulders of politicians. But do they act? Yes, but unfortunately only in the interest of the insurance carrier – the big hungry beast that feeds them in so many ways.

How can this be changed? First of all, by no longer condoning the falsehoods put forward by the PR and sales pitch of the insurance conglomerates. Second, by ensuring the protection of the rights of those who have been victimized by purchasing policies designed primarily to increase the carrier’s bottom line. Only then will justice be served.

One must think back to the days of pre-World War I, an era when governments in Canada, the U.S. and other countries were still the servants of the people. Today, the reverse condition prevails. Profit is the name of the game. Governments are preoccupied with taxes, interfering in business and imposing unrealistic regulatory practices; the list is endless and destructive, not only in this but many other situations.

Revolution? Perhaps, but this is always messy as we see currently by the heads flying around the world; most notably, Hussein, Gaddafi and soon to be Assad. Governments must get back to the basics of governing, rather than interfering in business, with inappropriate spending and a total disregard of our constitutional rights. They should operate for the benefit of the people, which is what they are paid to do. This mandate must be reinstated and enforced.

Health insurer’s U.S.-style plan seeks to ‘manage’ members’ drug costs

Under a type of plan that is virtually unheard of in this country, Great-West Life will try to determine if appropriate lower-cost medicines are available in place of big-ticket specialty drugs

A major Canadian insurance company is getting actively involved in the medical treatment of drug-plan members prescribed hugely expensive new medicines, playing the kind of direct role in basic health care that is common for U.S. private insurers, but virtually unheard of in this country.

Under a “case management” system already implemented at hundreds of workplace drug plans, Great-West Life’s representatives will try to determine if appropriate lower-cost medicines are available in place of big-ticket specialty drugs, work with the patient and doctor to “understand different treatment options” and assess the effectiveness of the drug therapy.

The program also requires clients prescribed specialty drugs to use pharmacies that Great-West designates, raising a red flag with at least one regulator.

“Is that an appropriate type of care, where some third party is telling you where you should go? asked Don Rowe, secretary-registrar of the Newfoundland-Labrador Pharmacy Board. “I have concerns about big businesses cutting deals with one another to be the exclusive, sole provider.”

Some analysts, however, say such measures are becoming a necessity as drug plans financed by employers, workers and unions grapple with a new wave of medicines that target small clusters of patients — but can cost as much as $500,000 a year.

“If somebody else is footing the bill … there’s going to be a lot more scrutiny for these claims,” said Michael Sullivan, whose company Cubic Health advises employers and other private drug-plan sponsors. “It [the GWL plan] could usher in a new generation of more American-style managed-care in Canada.”

He stressed, though, that the development is “brand-new” and it remains to be seen how extensively or effectively Great-West will manage cases. Such insurers process claims, but do not underwrite the cost.

Close to 2,000 private drug plans are now operating with the new system, and most of the 30,000 or so other plans administered by the Winnipeg-based company will likely join them by the middle of next year, said Brad Fedorchuk, the insurer’s vice president of marketing.
The prescriber is still responsible for the appropriate treatment, but it just needs to be demonstrated to us that is also the most cost effective

He touted the idea as a way to let plans afford the cost of new, potentially life-saving drugs that otherwise might be too dear for them to cover — and often are not funded at all by government programs. Case managers would simply ensure all options are considered before a drug is administered, said Mr. Fedorchuk.

“Doctors may not be aware of the cost differences between various treatments,” he said. “At the end of the day, the prescriber is still responsible for the appropriate treatment, but it just needs to be demonstrated to us that is also the most cost effective.”

Prescription drugs have long been one of the biggest and fastest growing costs in health care, accounting for about $26-billion annually. The sector’s growth slowed to a halt in the last two to three years, as many blockbuster drugs lost their patent protection, ushering in cheaper generic copies.

That downward trend is expected to be short-lived, though. Coming on the market are “biologics” and other, extremely expensive, specialty drugs for relatively small groups of patients with cancer, auto-immune diseases and less-common conditions. Remicade, for Crohn’s and rheumatoid arthritis, costs up to $50,000 annually per patient; Soliris, at $500,000 per sufferer of a rare blood-disorder, has been dubbed the world’s most expensive medicine.

Private drug plans, provided to many Canadians through their employer, cover about 36% of the cost of prescriptions, but are expected to absorb the bulk of the specialty-drug burden, since their clients tend to be younger and often need the medicines their whole lives.

While specialty products — nick-named “niche busters” — are prescribed now to less than 1% of plan members, they account for 17% of costs — a number projected to keep climbing, said Mr. Sullivan.

“This notion of these expensive biologic drugs is perceived by entire countries as being a major policy challenge,” said Steve Morgan, a pharmaceutical-policy expert at the University of British Columbia.
This whole proposition seems to be a very concerning step on a dark path toward the American model

Restricting how the drugs are covered is a reasonable response, said Aidan Hollis, a University of Calgary health economist. “Some doctors prescribe very expensive drugs when there are equivalent, lower-priced drugs available.”

Yet the GWL program is already creating a stir in the pharmacy world, with its requirements that some patients get their specialty drug from a designated store. Mr. Fedorchuk said Great-West Life has made agreements with certain pharmacies to win better prices, try to avoid wastage of the costly drugs and more efficiently serve patients.

That reasoning did not hold much sway, however, with a Newfoundland woman who was recently told by GWL she would have to start using a pharmacy in Ontario instead of her local druggist for a specialty arthritis drug. Partly out of concern about how the temperature-sensitive substance would be handled, she fought the move and for now has managed to stay with the local business, said her Newfoundland pharmacist, who asked not to be named.

“The fact they’re restricting the patient’s right to choose is a huge issue,” he charged. “This whole proposition seems to be a very concerning step on a dark path toward the American model.”

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