THCB

Defining Quality in the Health Insurance Industry

My patient, whom I’ll call Jane, had a neurologic disorder that prevented her from emptying her bladder properly. She required a permanent urinary foley catheter to help her urinate. Jane landed back at the hospital with yet another urinary tract infection – her third in one month. She had pus draining from her catheter and was infected with a multi-drug resistant strain of the bacteria Proteus. Our lab ran tests (sensitivities) to determine which antibiotics would be required to eradicate the infection, and it turned out the only oral drug that could destroy the infection was fosfomycin. Giving her fosfomycin would allow her to avoid intravenous antibiotics and be treated at home. This would prevent a lengthy expensive hospital stay. Thank goodness for fosfomycin, I thought.

One problem though: The insurance company wouldn’t pay for her 3 day fosfomycin prescription. It took several calls by our case manager and senior resident physician before, finally, the insurance company agreed to pay. And even then the insurance company decided to place a restriction on her purchasing of fosfomycin — they only allowed her to purchase only one dosage at a time. Did I mention that her neurological disorder prevented her from walking? Yes, a lady from a low-income area of Cleveland who cannot walk was required to find her way to the pharmacy three times in order to eradicate a dangerous infection. Was this just cruel, or was I missing something here?

We had to delay discharge two days, which was troublesome for Jane. Plus, the cost for two more nights in the hospital negated any savings that the insurance company gained by refusing to pay for her medicine. The time lost by our team members on the phone arguing with insurance companies easily could have been spent providing care to other patients. I’m struggling to find the winner in this equation!

Sadly, not a month has gone by in my residency where I haven’t witnessed a similar situation. This month insurance issues prevented my patient with leukemia from receiving a necessary antifungal medication to eradicate her fungal infection because there wasn’t enough ”evidence” of the infection. Was this really happening? A person who has never seen a patient and who sits in an office miles away rebutting the clinical decision of one of the world’s top infectious disease doctors? Our choices were now to either bring the patient back into the hospital, let her remain at home at risk for a life-threatening infection, or just order an expensive and unnecessary CAT scan to tell us what we already know.

Last month insurance tried to deny another patient of mine an in-hospital kidney biopsy after three years of multiple hospital admissions for uncontrolled hypertension. Finally after approval, the biopsy revealed a condition called IgA nephropathy that was responsible for her kidney dysfunction and high blood pressure.  The insurance company clearly didn’t think prevention of future hospital visits was important. I could go on and on with similar examples from this year.

Why do we as a society accept this? Cutting corners that put clients and customers at risk is generally not accepted by society. Some companies get away with it, but often they crash and burn when their faults are exposed. Just ask British Petroleum after last year’s Gulf of Mexico oil spill released 4.9 million barrels of oil into the ocean and killed 11 crew members, or Enron in 2001 after they went bankrupt and lost over $50 billion of shareholders money. If we add up the number of people who die or suffer needlessly because of a denied health insurance claim, would the impact be as large as the effects of BP or Enron? If our healthcare system continues to eat up a larger share of our GDP and bankrupts our economy then perhaps more people may start to notice what is occurring on a daily basis in this country.

Granted, insurance companies cannot pay for everything for everyone. There is an entire field dedicated to cost effectiveness in healthcare, and it is wise for organizations to use this knowledge and data. We need to ration in our healthcare system and when an intervention adds little value we need to ask whether or not it is necessary. Unfortunately the attempts to deny insurance claims I’ve witnessed in the hospital are usually not for medical interventions that add unnecessary costs to our healthcare system, but rather for common sense clinical interventions where benefits clearly outweigh the costs. This is what frustrates and frightens me.

How should the system be designed in order to ensure rationing of resources while not disrupting necessary services and interventions? I’m not exactly sure, but a quick and easy bandage solution would be to model the system after the way Cleveland Clinic provides checks for its medications. Any time there is an uncertain medication order, I immediately receive a call from my pharmacy. For example “Dr. Nikore, are you sure you wanted medication X every Y hours, given variable R perhaps we dose this every Z hours?” Many times I explain my reasoning, but sometimes I kindly take the pharmacist’s advice and make the appropriate change. Usually this conversation lasts just a few seconds. Imagine a quick call from an insurance agent providing some alternative treatment ideas, instead of a long and drawn out battle on the phone lasting days. If the doctor makes a reasonable argument, the insurance agent confirms the approval immediately and moves on. A quick conversation instead of a three day battle saves the insurance company agent a tremendous amount of time, translating into cost savings for the insurance company. Of course for this to happen insurance companies must change their mindset and truly put patients first above their own short-term financial gain and earn the trust of healthcare professionals. They must start seeking win-win situations and learn that any short-term financial loss would be more than restored by long-term gains in company credibility and public trust.

Society expects responsible value creation from its businesses, and it expects companies to meet bare minimum standards of quality. But quality and safety mean different things to different organizations and industries. At the bare minimum, Google must keep its data private and keep its servers running, United Airlines must assure its planes are flying in top condition, and FedEx better not lose mail. Benefits these companies provide beyond this minimum, such as speed of service, become competitive advantages and differentiate them from others. What does ”quality” and ”safety” mean for an organization that doesn’t provide tangible goods or services such as a health insurance company? What is a health insurance company’s ”bare minimum”? We as a society need to answer these questions soon, unless we are prepared to watch our healthcare system sink toward bankruptcy.

Vipan Nikore, MD, MBA, is an Internal Medicine Resident Physician at the Cleveland Clinic. He has led projects at UNICEF in India, the WHO in Geneva, IBM, Sun Microsystems, Citibank, UCLA, and the Ontario Ministry of Health. He is the President and Founder of the youth leadership non-profit Urban Future Leaders of the World (uFLOW). His posts are personal views and do not necessarily reflect the opinions or positions of the Cleveland Clinic.

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19 replies »

  1. Let me guess, the calls were to Utilization Review (the department that trys to figure out cost and eventually profit) My guess was that this is Managed Care at its worst. Was this a HMO type plan? My advice is to get rid of the HMO models even though they tend to pay better than the PPO model which forces you to offer a pre negotiated rate to patients. The bottom line is your reputation is on the line there.

  2. who deserves welfare and who deserves to be taxed more?

    I think no able bodied person should be given handouts.

    I believe in equal protection and thus no person should pay a different tax rate then another. Flat tax for income, no sales tax exemptions, no write off of state or local taxes on federal taxes, and no tax reductions for specific companies. I think it is clearly unconstitutional to give one company a tax cut and not another.

    As far as who should be taxed more every liberal who says taxes should be higher should be taxed until they stop saying we should raise taxes.

  3. I think the discrepancy between conservatives and liberals is not so much about numbers, as it is about the definition of “deserving” and its improper use in this context.

  4. no there are some deserving welfare receipants, its a fraction of what we spend on welfare but we do provide some people that deserve it a fraction of what they deserve because we waste so much on those who don’t.

    That doesn’t change the fact that liberals have no idea how much we spend on welfare and for some reason can’t grasp the very really fact there are not enough profits and rich people to pay for all their spending.

  5. Sorta obvious. GE’s total revenue is 150 billion. The most profitable companies, of which there are very few and they tend to lose as much as they make in some years pulls in 20 billion. A 35% tax would be 7 billion.

    Food stamps alone is 85 billion. Medicaid 300 billion.

    It amazes me you liberals have no clue how much your welfare state actually sucks out of this country. If you took the top 500 companies their total profit was only 391 billion.

    “For 2009, the Fortune 500 lifted earnings 335%, to $391 billion”

    If you liberals took 100% of all profit in the US you still wouldn’t be able to pay the annual cost of your welfare programs.

    Not only are liberals ignorant of the cost of their welfare state they think there is more then enough money sitting around doing nothing for them to take to easily pay for these programs and have no negative effect on the economy.

  6. So, sticking to Welfare Queens only, whatever that may be, if we add together all the lost revenue from Welfare Queens not paying into the pot, and adding to it all the expenditures on welfare for Welfare Queens, how does the result compare with, say, a couple of corporations like GE and Google finagling tax laws so they have to pay almost nothing on their profits?

  7. “conservatives make so much effort to deflect attention to poor “welfare queens.” They need to distract the public’s attention to the REAL freeloaders in our society, the ones which drive around in limousines and live in mansions.”

    I forgot our communist breathern Quack thinks all money belongs to the state and this the limo riders and mansions dwellers are taking more then their fair share. He likes to ignore what they put into the pot compared to the “Welfare Queens” and just look at their excessive consumption.

    “-top 1% of earners in 2008 brought home 20% of adjusted gross income but paid 38.02% of all federal individual income taxes”

    Question for you Quack, what exactly would be in your community pot to redistribute if everyone contributed like a welfare queen??????

  8. “corporate welfare holds a sacred position in our society. Corporations get far, far more welfare than any other segment of our society.”

    Two questions Quack;

    1) Anything to back this up?
    2) How do you define welfare? It appears you have a tortured definition in order to support this claim. When I think welfare I think giving someone support or money for nothing in return;
    a. Food stamps
    b. Public Housing
    c. $300,000 in healthcare for $100,000 in Medicare contributions
    d. $18,000 in SS benefits for $3 in contributions
    Taxpayers are giving away this assistance.

    Where is all this corporate welfare? If you tax someone at 20% instead of 35% is that welfare? That sounds like just not taking as much of someone else’s money to me. If you give a company a reduction in payroll taxes in exchange for hiring 1000 people is that really welfare? Again your taking less of their money in exchange for something you wanted.

    I don’t think you can show much corporate welfare at all let alone anything that would come even close to actual welfare, Medicare, Medicaid, SS, etc etc.

  9. Ah, but Ms. Gur-Aire, corporate welfare holds a sacred position in our society. Corporations get far, far more welfare than any other segment of our society. They pay far less taxes as well. It’s all about the transfer of wealth from the poorest to the richest. This is why conservatives make so much effort to deflect attention to poor “welfare queens.” They need to distract the public’s attention to the REAL freeloaders in our society, the ones which drive around in limousines and live in mansions.

  10. “At $180 for 99213 and $50 facility charge on top”

    Ah, “facility fees” – that’s how Medicare and private patients reward lack of efficiency in hospital owned ambulatory practice, as compared to the “cottage industry”.
    Is there any other “market” where consumers are obligated to compensate providers of services for their inability to compete with others who are more efficient? Is this a form of charity?
    Is there any other market where experts and policy makers actively encourage creation of more inefficient entities, in an effort to reduce costs?

  11. I don’t normally waste my time on people who are more concerned with grammer then content but I am curious what the defect with “we” is?

    ” If patients would like to use the services of CC, then they will go.”

    True but if I deny the claim they are going to have a really big out of pocket cost to do so, and as I said thats not really affordable at CC.

    ” Items are priced at a certain standard for the care that is provided at CC.”

    How is any 99213 for a cold valued twice as everyone else, you can’t treat a cold that much better then everyone else.

    “My thoughts are that you will understand the value of that hospital”

    Very simplistic view, maybe your new to THCB and don’t know my background. I need to worry about the quality of care for thousands of families not just my own. Great quality is no value if you can’t afford it.

    ” if you wish to respond with a knowledgeable retort, please use some grammatical precision.”

    Your prose is very pretty but you lack any substance or knowledge. You can keep your perfect grammer and I’ll hold onto the inteligence. Saying nothing perfectly is still saying nothing, think about that.

  12. Great Article Dr. Nikore. I think you have some great points in your article that really speak to the frustrations held by the medical field about insurance companies and efficiency in general.

    To Nate Ogden. I must say that you do bring up some interesting debate. However, judging from your use of the word “we” and your grammatical defect, your writing is “suspect.” If patients would like to use the services of CC, then they will go. Items are priced at a certain standard for the care that is provided at CC. To my knowledge, CC provides a great deal of business and brings up the community of Cleveland to much avail. My thoughts are that you will understand the value of that hospital when you or a family member is in need of medical opinion regarding that “rare blood illness” (hopefully that will not happen).

    Albeit, if you wish to respond with a knowledgeable retort, please use some grammatical precision. Then, I’ll take your debate more seriously.

  13. This sounds like two wrongs make a right. Obviously, there is enough blame to go around. But why can’t a reasonable system that serves everyone with adequate funds from 3rd party sources to make providers prosperous (not rich)? I’m not against wealth but it seems only reasonable that people get rich when people voluntarily part with their money – not when we’re paying for something with “benefits” not paid directly by the recipient or, worse yet, with taxes from people who are not in any way related to those who receive it. Maybe this is too much to ask.

  14. Dr. Nikore,

    Lets look at some of these issues from another perspective. In regards to the general question of how to pay for fosfomycin why didn’t CC just fill the Rx and eat the cost instead of wasting so much time arguing with the insurance company, it sounds like you also would have been further ahead just giving her the drug. Considering your billed charges are about 10 times your cost of care and even with a great discount your still collecting 3-5 times your cost of care I think you could afford a little charity care, especially if it saves you money. Of course the problem isn’t Jane the one case we are discussing, it’s the precedence. If you did that for Jane then the insurance company would try to stick you with every order of fosfomycin. This answers your question about why insurance companies don’t just roll over when a doctor says they want to order something.

    Did the insurance company know she was immobile? This is the type of little detail we usually don’t find out about till after the fact. Without knowing more details its hard to say anything else, how many request for exception are for cases like this versus someone just wanting a shortcut, its hard to tell these details over a phone call. Its also not as easy as just saying well in the case lets go ahead and do this, there are very clear discrimination laws when it comes to insurance benefits. If you do it for one person then you almost assuredly have to do it for everyone else. Are they now going to allow everyone they cover to pick up three doses of a single dose antibiotic just because of Jane’s rare case? 10-15 years ago it was much easier to look at a single situation and do what was right for that situation, that is illegal now, thank you healthcare reform and courts.

    “two more nights in the hospital negated any savings that the insurance company gained by refusing to pay for her medicine.”

    It’s not just her medicine, its every person that would ever get that drug or a similar benefit in the future. Not who the insurer was, got a good guess, but they would most likely have tens of thousands of these cases each year with very few or none as severe as Jane’s.

    “The time lost by our team members on the phone arguing with insurance companies easily could have been spent providing care to other patients.”

    Again, why didn’t you just give her the drug? It appears to be around $141 for three doses. At the same time you fault the insurance company for fighting over $141 you were on the other side fighting just as hard. I’m sure your cost was substantially less than that. At $180 for 99213 and $50 facility charge on top you guys can’t eat a script now and then?

    “A person who has never seen a patient and who sits in an office miles away rebutting the clinical decision of one of the world’s top infectious disease doctors?”

    Look at it this way, your free to do what ever you want, if you want to treat them with antifungal drug X go right ahead, whats really happening is your asking someone miles away who has not seen the patient to give you $X,XXX+ to treat her with this antifungal med. Not knowing if that is the right decision why should we pay you $x,xxx+ to do so? If you want money from us, then prove to us proper treatment is being delivered. This might sound absurd but as many absurd cases as you can list I can name just as many or more absurd cases of doctors ordering unnecessary treatments. Sitting miles away not seeing the patient how do you expect them to make these decisions and at the same time stop you from wasting money and abusing the system? You have had 30 years in which Cleveland Clinic could have started their own insurance company if they thought there was a better way. Summa, AultCare and others have made it work, just ignore QuailCare and pretend that didn’t happen. Insurance companies, in the all inclusive use as most bills are not in fact paid by insurance companies, can’t win, if they argue or restrain your spending they are bad, if they pay everything you bill and premiums go up they are bad. Either way they appear to be the scapegoat of provider abuse.

    “Cutting corners that put clients and customers at risk is generally not accepted by society.”

    So when I deny a claim for Staph Infection from CC or some other preventable ailment CC isn’t going to go nuts demanding payment? How about all the poorly documented and risky care from providers? I can’t think of a single back surgery claim in the last 10 years that used approved hardware.

    “If we add up the number of people who die or suffer needlessly because of a denied health insurance claim, would the impact be as large as the effects of BP or Enron?”

    All three pale in comparison to the number that die or suffer needlessly due to hospital and provider errors. To compound matters the money saved from eliminating all the provider and hospital errors would lower insurance premiums enough to cover millions more people and loosen the rules. Insurance is so tight right now because cost is at the breaking point. People can’t afford another 1-2% in healthcare cost so savings must be found, unfortunately a few people will end up on the wrong side of those savings. If your charges were not so ridiculous then payors wouldn’t need to be so tight on questioning you.

    “Imagine a quick call from an insurance agent providing some alternative treatment ideas,”

    LOL, try doing that from a number outside CC. Its takes 6-12 months for CC to get a bill out. If you have a question on a claim it’s usually months before you get a return phone call. I have had cases were we tried to help members find access to Rx that weren’t covered and the number one problem is always reaching the doctor to discuss alternatives. It would be great if you ever picked up your phone or returned a message.

    “Of course for this to happen insurance companies must change their mindset and truly put patients first above their own short-term financial gain”

    Most of your patients are not covered by insurance companies so this argument is suspect at best. Then not to beat a dead horse but Cleveland Clinic questioning anyone else’s mindset and preoccupation with financial gain is a joke, have you ever seen the bills that come out for the work you do? In any other business you would be put in jail as crooks. When people in NE Ohio ask why insurance is so expensive its Cleveland Clinic. By eliminating CC from your network you can lower your insurance cost 5-10% immediately. UH is trying to catch up but for now you are the problem with the cost of healthcare, all the Jane’s in town don’t begin to add up to what CC sucks out of the community.

    “What does ”quality” and ”safety” mean for an organization that doesn’t provide tangible goods or services such as a health insurance company?”

    Wow, that’s pretty offensive and ignorant of how things work. Again I think when you say insurance company you mean all inclusive payors, if I am wrong I am sorry. Lets talk about CC and how they do business. Let’s say someone needs medical care and goes to Cleveland Clinic, they do provide great care and chances are you will be very happy with the outcome. Then the bill shows up. As I might have mentioned once or twice before, they are expensive. Their office visits are twice as much as everyone else in town and then they slap a $50 facility charge on top. Their billed charges usually run 8-10 times their cost to deliver care. If you don’t have any insurance company you would need to be a millionaire to be treated at CC. Now CC will gladly give substantial discounts to insurance companies but even those come at a price, you need to overlook all their billing errors and the 6-12 months it takes them to send a bill. So doctor as you can see right there is a tangible service. Interestingly its one I don’t understand. Why do you force people to buy this tangible service in the first place? If your bills weren’t so out of line people wouldn’t need to buy these discounts from an insurance company. Anyone else ever see the similarities between a Mob protection racket and the hospital PPO business?

    So far we have discounts and the work and labor of paying CC which is no easy task. There are two tangible services they provide. Next up we have the don’t go to CC unless you have to service, most people have no idea how overpriced you are, for treating rare blood illness great, do they really need to pay $180 plus $50 facility fee for strep throat? So we collect the data and show people why they should never step foot in CC unless it is life and death. Or for the food downtown, that is anther valid reason.

  15. An interesting piece! I think that in order to provide quality health care to everyone, there needs to be a cadre of healthy, productive citizens—the same model that insurance companies use when they deny people coverage. I’m not sure if the U.S. has that yet. It would take a long time to right all the wrongs that have been caused by poverty and health issues. Quality and safety mean different things to different sectors, no doubt! Having the Affordable Care Act will hopefully provide an alternative to the profit interests of insurance companies.

  16. “Society expects responsible value creation from its businesses, and it expects companies to meet bare minimum standards of quality.”
    ___

    Ayn Randianistas would say that — morally — there’s no such thing as “society,” only a large aggregation of mutually autonomous transacting dyads, for whom “quality” and “value” are simply defined by the upshot of their microeconomic interactions. They deny the very concept of “commonwealth” implicit in the word “society.”

    I call it The Rule of Gresham’s Law.

  17. I just can’t help myself on this one.

    Quality care (relative to the insurance industry) = less care provided = more profit. Insurance companies are for-profit corporations (including the supposedly non-profit ones). This is what they do. This is all they do. We should not expect them to behave differently. They will continue to bleed resources off our health care system until we stop them.

    We should not send an ape to retrieve a banana, and expect to get that banana back.

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