why are insurance companies involved in medical decision making?

[deleted647155]

http://www.kevinmd.com/blog/2014/03/insurers-dictate-medical-decisions.html

It seems like we are so used to insurance companies influencing our medical decision making e.g. prescription drugs, radiology scans, really important treatments, that we've all kind of just accepted it as the way to practice medicine in the U.S.

I've been realizing more and more that the frustrations doctors have with insurance companies is that insurance companies are kind of like a big diss to them: I went to 4 years of medical school, 3-8 years of residency, all to have my medical decisions made in the best interests of my patients to be questioned by a nurse or PA at an insurance company, who has NO knowledge of my patients whatsoever.

Just thinking about that, I can totally empathize with the frustration that doctors must feel.

And not only are insurance companies telling doctors how to do their jobs, jobs in which they are the professionals, politicians and businessmen and patients are also telling doctors how to do their jobs. When so many people are telling you how to do your job and you have this fear of litigation over your head, just how trapped and freedom-less would you feel?

I'm for disintermediation of insurance companies, or at least, have insurance companies only be involved in the financial aspect of medical care, never in the medical decision-making aspect--that's how almost the entire rest of the world does it, insurance companies can't reject a doctor's orders.

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[NVdisG]

Good post, Dermalicious. Unfortunately, as long as our society is a capitalist, revenue-centered one, patient care will always come after increasing profit margins. If you look at how healthcare is delivered today, the actual act of a patient being cared for is merely a side effect of revenue generation by hospitals, insurance, pharmaceutical companies, and the medical tech industry.

 

[bc65]

I read the referenced article. The example given in the article was very different from the conclusion of the poster. The article was complaining about a doctor doing a procedure that the author didn't recommend because it was paid for. Both procedures were covered, so in this instance both the author of the article and OP have nothing to complain about.

Anyway, insurance companies don't determine care. They determine what they will pay for. Patients can have any surgery done, they just have to pay for it themselves. That's not just a semantic distinction.

What insurance companies are often guilty of is delaying payment, "losing " paperwork, and having in plan doctors working at out of plan hospitals, leaving patients with payments that they thought would be covered, or listing a doctor as in plan when they aren't, and refusing to pay the in-plan rates. But generally, standard recognized procedures are covered. In other words, the problem isn't so much getting a procedure covered, it's getting reimbursed.

 

[TooMuchResearch]

http://www.kevinmd.com/blog/2014/03/insurers-dictate-medical-decisions.html

It seems like we are so used to insurance companies influencing our medical decision making e.g. prescription drugs, radiology scans, really important treatments, that we've all kind of just accepted it as the way to practice medicine in the U.S.

I've been realizing more and more that the frustrations doctors have with insurance companies is that insurance companies are kind of like a big diss to them: I went to 4 years of medical school, 3-8 years of residency, all to have my medical decisions made in the best interests of my patients to be questioned by a nurse or PA at an insurance company, who has NO knowledge of my patients whatsoever.

Just thinking about that, I can totally empathize with the frustration that doctors must feel.

And not only are insurance companies telling doctors how to do their jobs, jobs in which they are the professionals, politicians and businessmen and patients are also telling doctors how to do their jobs. When so many people are telling you how to do your job and you have this fear of litigation over your head, just how trapped and freedom-less would you feel?

I'm for disintermediation of insurance companies, or at least, have insurance companies only be involved in the financial aspect of medical care, never in the medical decision-making aspect--that's how almost the entire rest of the world does it, insurance companies can't reject a doctor's orders.

Doctors order expensive, non-indicated testing and expensive, non-indicated medications.

In the example given in the article, what was the indication to use an untested option over the other options? Physician gut feeling that something with a theoretically sound mechanism will be more effective?

The payers need to be involved or our health care, if not entire, economy will go belly up.

http://m.content.healthaffairs.org/content/33/10/1779.full

 

[Psai]

Are there midlevels in insurance companies? I see no reference to them in the blog

 

[NickNaylor]

 

[NickNaylor]

Doctors order expensive, non-indicated testing and expensive, non-indicated medications.

In the example given in the article, what was the indication to use an untested option over the other options? Physician gut feeling that something with a theoretically sound mechanism will be more effective?

The payers need to be involved or our health care, if not entire, economy will go belly up.

http://m.content.healthaffairs.org/content/33/10/1779.full

The entire economy will go "belly up" due to ordering of non-indicated diagnostic tests?

Interesting.

Edit: Also not sure what the article you posted has to do with your original comment. Two completely different and unrelated things.

 

[Aloft085]

Ultimately, someone has to make money-based decisions regarding healthcare in our country. This is the way we've chosen to do it for present.

 

[PL198]

they aren't involved in making decisions. they're involved in coverage. there's a difference.

 

[PL198]

the whole " how can a non-md question my treatments" argument is such a joke. they're not questioning them from a medicinal standpoint, they're questioning them from a rational cost-based analysis, which they are qualified to do.

god forbid managing money be a part of medicine. nah screw it, everyone should just get a drug that's 5 % better for 100x the cost, money is dumb

 

[NickNaylor]

they aren't involved in making decisions. they're involved in coverage. there's a difference.

That's a huge oversimplification though, and I can't tell if you're dodging the issue entirely. Yes, they are involved in "coverage." However, as part of that role they indirectly flex their muscle and play a role in regular management by dictating what will and won't be paid for. The two concepts are different but intricately related. Ask any PCP and I'm sure they'll bemoan the woes of difficulties in dealing with insurance companies and how they can impact how a physician practices. Not necessarily for the worse in all cases, but that doesn't mean that they don't have their hand in the decision-making pot.

Edit: I agree with your second post about rightly questioning hugely costly therapies that have questionable long-term benefit. But that's only one extreme in this equation.

 

[DocVapor]

Man throwing around money

I was impressed with this until I noticed he was doing that with only $5 bills. Now he's just a scrub.

 

[Psai]

I was impressed with this until I noticed he was doing that with only $5 bills. Now he's just a scrub.

When you have that many 5 dollar bills, you let me know

 

[PL198]

That's a huge oversimplification though, and I can't tell if you're dodging the issue entirely. Yes, they are involved in "coverage." However, as part of that role they indirectly flex their muscle and play a role in regular management by dictating what will and won't be paid for. The two concepts are different but intricately related. Ask any PCP and I'm sure they'll bemoan the woes of difficulties in dealing with insurance companies and how they can impact how a physician practices. Not necessarily for the worse in all cases, but that doesn't mean that they don't have their hand in the decision-making pot.

Edit: I agree with your second post about rightly questioning hugely costly therapies that have questionable long-term benefit. But that's only one extreme in this equation.

it is, but people act like these things requiring prior auth and etc are forced on them. if they really want it, they can pay for it themselves. it's not like the insurance company saying they won't cover it is a concrete no where the doctor isn't allowed to order it. It's just funny because the general public looks to blame physicians when they can, and physicians look to blame big business when they can. It's their cop out equivalent of " why does a doctor get paid 200k/yr, thats too much"

It's really funny because people in medicine freak out when stuff like that is said, but then turn around and do the exact same thing but with a different subject. No one is telling physicians they don't know medicine, they're just being made more aware of the costs involved. When my peers order 15 diagnostic tests on simulation patients like its house and we have no idea what it could possibly be, that's when you have this culture that has 0 understanding of the costs involved and then cries when someone says " no that isn't a good economic decision"

 

[Cytarabine]

The entire economy will go "belly up" due to ordering of non-indicated diagnostic tests?

Interesting.

Edit: Also not sure what the article you posted has to do with your original comment. Two completely different and unrelated things.

http://www.nejm.org/doi/full/10.1056/NEJMp1409696

I don't think it's unreasonable to think a fair portion of healthcare costs are for services (diagnostic or therapeutic) with dubious benefit. To say that's the sole reason the entire economy will go belly up is hyperbolic, but it's certainly an element of healthcare costs, and the rise in healthcare costs relative to GDP is certainly a dangerous situation economically

 

[PL198]

It's all well and good to just say - "well if they want that prior authorization med so bad they can just go ahead and pay for it"

Except for one problem. US medical care at the current prices/rates, without insurance subsidization, is unaffordable for all but the extravagantly wealthy.



It's kind of both parties faults, and they are inextricably intertwined.

Medical education does a terrible job of teaching cost consciousness.

But it's also a mess from the payers side. If a patient walks in and wants to know how much a hernia repair "costs" - the answer is really it depends. Different negotiated rates for different insurers and even different plans within one insurer. Different rate if they are medicare. Yet another rate if they are self pay - and guess what the self pay is the most expensive because they don't get to bargain down the rate like an insurer!

That statement is only valid if you think these things should be obtainable for the masses without significant opportunity cost. A ferrari isn't considered unaffordable since it's out of the realm of most peoples earnings. I don't think advanced diagnostics should be any different. People don't deserve the absolute highest quality of care just for living.

With reference to your last paragraph, I think that's a joke on HCP part. Those cash only places with published prices are amazing. These things should be available. There's no reason prices shouldn't be readily available, except for this BS " medicine is special" crap, propagated by the same people that say medicine is a calling and physicians have some super special duty to their patients that other professions don't have.

 

[Cytarabine]

That statement is only valid if you think these things should be obtainable for the masses without significant opportunity cost. A ferrari isn't considered unaffordable since it's out of the realm of most peoples earnings. I don't think advanced diagnostics should be any different. People don't deserve the absolute highest quality of care just for living.

With reference to your last paragraph, I think that's a joke on HCP part. Those cash only places with published prices are amazing. These things should be available. There's no reason prices shouldn't be readily available, except for this BS " medicine is special" crap, propagated by the same people that say medicine is a calling and physicians have some super special duty to their patients that other professions don't have.

"what people can afford" falls so far under the "highest quality of care" I'm not sure why you picked those specific words. A lot of basic care is unaffordable.

 

[PL198]

I think if you equate being able to afford say an MRI with being able to afford a Ferrari then we are never going to come close to seeing eye to eye.

A single major hospitalization, at current price, would bankrupt most people if they had to pay fully out of pocket. I don't think a system where only the 1% can afford modern healthcare is appropriate. It also, in the long run, would be a terrible decision for society

you're basing that on costs that aren't made with the intention of being paid out of pocket, so the whole premise by which you hold that opinion is flawed. there's no reason for the prices to stay as they are if people were paying out of pocket.

 

[PL198]

I said with the caveat in the current market. That was specifically in response to the comment that if people want a medication that they can't get prior auth for they should just pay for it.

But I also think at its core, even if you blew up the current absurd pricing and insurance models and started from scratch, that the "real" costs of care delivery (*even if truly delivered at cost, and not at a profit) would be unaffordable to the majority.

if that were the case then the insurance companies wouldn't exist. you realize they make money somehow right? so with all the people drawing benefits, they're still coming out ahead, but somehow reduced prices wouldn't be affordable? Not following you there at all.

 

[PL198]

it's not like insurance magically cuts out costs. if the system was truly as expensive as you make it sound like, then the insurance companies wouldn't want any part of it because they wouldn't be able to charge people a reasonable amount and still cover the claims. their presence indicates it's not actually that expensive.

 

[Cytarabine]

if that were the case then the insurance companies wouldn't exist. you realize they make money somehow right? so with all the people drawing benefits, they're still coming out ahead, but somehow reduced prices wouldn't be affordable? Not following you there at all.

it's not like insurance magically cuts out costs. if the system was truly as expensive as you make it sound like, then the insurance companies wouldn't want any part of it because they wouldn't be able to charge people a reasonable amount and still cover the claims. their presence indicates it's not actually that expensive.

The basic premise of insurance is that, on the individual level, there is an unpredictable risk of incurring need for services that would cripple one financially. This risk is predictable on the population level. For an affordable fee, you buy insurance to protect oneself against catastrophe. The payer runs the numbers to determine what that fee should be to meet the need of the individual and the payer. How they behave now is different to an extent, but that's the fundamental premise. I guess I really just don't understand the logic in your argument.

 

[NickNaylor]

you're basing that on costs that aren't made with the intention of being paid out of pocket, so the whole premise by which you hold that opinion is flawed. there's no reason for the prices to stay as they are if people were paying out of pocket.

But the problem is that a small minority of the population DO pay these prices and the situation that @SouthernSurgeon mentions DOES come true. This isn't some theoretical framework. This happens.

Now should people be insured? Sure. Should they deserve to be bankrupt because they developed appendicitis requiring a 2-3 day stay in the hospital because they aren't insured? No, I don't think so.

 

[PL198]

The basic premise of insurance is that, on the individual level, there is an unpredictable risk of incurring need for services that would cripple one financially. This risk is predictable on the population level. For an affordable fee, you buy insurance to protect oneself against catastrophe. The payer runs the numbers to determine what that fee should be to meet the need of the individual and the payer. How they behave now is different to an extent, but that's the fundamental premise. I guess I really just don't understand the logic in your argument.

I'm saying if the costs were so astronomical like people make them out to be, then the pooled cost of everyone taking benefits would be extremely high and the premiums would be huge. They're not. Insurance ends up paying for all the services, just like people would if there was no insurance. The fact that they can pay for them (with the money gotten through premiums) proves its not that expensive, since if they didn't exist, that money normally going to premiums would be able to pay for the services. There's no magic here where the costs go away. If an insurance company can pay it, in the long run, avg person would be able to pay it. The risk analysis that factors into premiums is no different than the same risk analysis someone would do to decide if insurance is worth it or not. Insurance is just a parachute in the event you need it. If insurance was prohibitively expensive due to extremely large premiums due to extremely large costs, then most people wouldn't get insurance or wouldn't get insurance through their job.

 

[PL198]

Basically you have various probabilities of claiming benefits with variable costs resulting in an expected cost per person value(compare this to expected earnings from gambling-classic math problem). Then you have premiums that are slightly higher than this number so that the insurance companies can make money. I'm saying those numbers aren't anything special, and that expected cost/person is going to constant regardless of if insurance exists or not. Therefore, if avg person can pay their premiums(which have a slight mark-up) then they'd be able to cover their expected cost/person in the long run. This is using the law of large numbers and on a population level as obviously there's going to be people with a 2 week hospital stay who wouldn't, but there would similarly be those who don't claim any benefits in a given year.

 

[PL198]

You seem to have missed @Cytarabine 's point. Having a large pool not only pools risks, it pools costs. Your premium isn't sky-high because the other 50,000 people in your pool all absorb the cost of the small margin of people with real medical needs/expenses. The insurance company can "afford" to pay it because they spread that cost out across everyone in small tolerable amounts. For every person in the pool who has a heart attack and needs a hospitalization, they have hundreds or thousands of people paying in and not using a penny.

If they insured a population consisting entirely of people with major medical needs (ESRD or cancer patients, e.g.) - then absolutely the premiums would be sky high.

right but it's not my problem other people maintain their health like crap. I shouldn't have to pay because they can't put down the cheeseburgers and that they have a higher risk. It's holding me accountable for their decisions, which is a joke.

that would require punishing people for making mistakes though and god forbid we can't ever do that. gotta give everyone a get out of a jail free card at all times.

not to mention on a national policy level, that 1 person having a heart attack isn't statistically viable in conversation. I never said everyone would be able to pay, I just said the avg person in the long run would be able to. I care way more about that then extreme minorities.

 

[PL198]

It's mind-boggling to me that your own words are 100 or 1000s-1 and you are talking about making policy to benefit the 1 and penalize the 100 or 1000.

 

[PL198]

I'm using individual examples to make a simple comparison.

I think the more realistic number would be, conservatively, that less than 10% could afford any semblance of modern healthcare if they had to pay all costs for it themselves.

Why is this any different than car insurance? I've never once used my car insurance and I'm paying into it every year. Does that mean I can afford a new car if mine gets totaled on the drive home today?

If you saved the premiums for the length of time in which it would take you to likely have an accident, yeah.....

 

[PL198]

And again it all comes back to this.

What proportion of disease and disability do you think is attributable to individual decision making or choice?

not going to throw out a number because it'll be confounded either way. it's just bullcrap how everyone wants to take it out of the hands of the people, say its not their fault. people are delusional if they think average obese person didn't get there on their own volition. show me majorities of people with chronic disease truly working to fix their condition. it's not even close to 50 % that do that. but hey, society and health maintenance will just continue to plummet, as more get out of jail free cards are made. I'm fine with it because it just makes me even more superior to those who cannot.

 

[PL198]

Trauma isn't chronic. Cancer isn't usually considered chronic. Neither are most infections.

I don't see why it's tough to ask people to have money set aside to possibly manage any medical complications. God forbid anyone have foresight for potential problems in the future. Oh no, lets hold everyone's hand and make sure they can worry about the newest drink from starbucks, but not worry if they're going to have the money to support their life 10 years from now.

All your hand holding just does them a disservice and puts them worse off than where they were before it started. Yet it's just going to help people like me who will meticulously have contingencies on top of contingencies. It just increases any potential disparity that you think is already there. It's subtraction by addition.

 

[PL198]

No idea, I'm sure it's big money, let's say 500k. Level 1 trauma I'll guess 250K

My problem is you're representing these like they are common in terms of the general population. My point is that once you remove insurance premiums, thats a good bit of money extra to save for these issues. I feel like you're approaching this from the standpoint of how things currently are without that extra $$$ that would be there if it wasnt going to a premium

 

[PL198]

their fault, avg family premiums are 16k/year, doesn't take long to accrue a decent chunk at that rate.

 

[PL198]

Fine let's just blow it all up and go back to bartering. I will charge 3 chickens per appendectomy.

I guess I just don't understand what your alternative is. People talk about the current insurance system being unsustainable and driving up costs and etc, but then there's no real solution where people are happy. Are you happy with the current insurance market? If not, what would you change

I'll give you 4 chickens if you do a bang-up job

 

[Cytarabine]

their fault, avg family premiums are 16k/year, doesn't take long to accrue a decent chunk at that rate.

It still doesn't seem like you're getting it. By the very nature of insurance, an average individual's premiums will amount to less than the amount an insurance company pays for an average individual's care. Insurance would be unsustainable if that were not the case. You are managing risk with insurance. Risk is not an average on an individual level - it's an adverse event that either happens or doesn't. Saving money to pay for your own care is a great idea (see health savings accounts). Let's say you have a cash only system. A family puts away 20k a year for health expenditures. They take good care of themselves and their child. 3 years into saving, their child develops APL, goes into DIC and requires intense PI care followed by years of H/O care. In the cash only system, this family goes bankrupt, they can't pay for their child's care, the child dies, etc. This was an event that was unpredictable (on the individual level) and devastated the family despite favorable circumstances and good planning. Alternatively, with insurance, the same family pays a smaller amount per year for a premium, the annual burden of which is smaller, and they're able to prepare for these unpredictable events. That is the fundamental benefit of insurance.

 

[PL198]

I'm well aware of how insurance works... I don't know how you can't realize that from reading my posts.

 

[Cytarabine]

I'm well aware of how insurance works... I don't know how you can't realize that from reading my posts.

Because you're insisting that it would be reasonable for a family to save for their own care without insurance. For an average family with decent financial circumstances, sure. For a less well off family or a family that lightning strikes, not so much. If you're saying you're OK with a certain percentage of individuals/families getting ****ed, make that clear as part of your model because it's inevitable

 

[PL198]

Because you're insisting that it would be reasonable for a family to save for their own care without insurance. For an average family with decent financial circumstances, sure. For a less well off family or a family that lightning strikes, not so much. If you're saying you're OK with a certain percentage of individuals/families getting ******, make that clear as part of your model because it's inevitable

you're saying you're OK with average family w/ decent financial circumstances getting screwed. So we're down to you helping 1-.1% of people and I'm helping 99-99.9 % of people, but my plan is the one that isn't obtainable. hm

 

[Cytarabine]

you're saying you're OK with average family w/ decent financial circumstances getting screwed. So we're down to you helping 1-.1% of people and I'm helping 99-99.9 % of people, but my plan is the one that isn't obtainable. hm

No, you're just making up an extreme number that is laughable.

It would be the majority who would be unable to afford care.

The numbers work fine for my argument, it doesn't matter so much. Let's say it benefits 1%. So 1% put less into the system than they get out. The cost of that 1 are spread over the remaining 99%. A small increased burden on the 99 to benefit the 1. But the claim the 99 get nothing isn't true. They pay for protection against the risk that they become the 1. PL, no one said your idea isn't obtainable. I said your idea comes with a cost to it. So does insurance. I think the minor burden of cost for many of insurance is more favorable than the catastrophic burden of risk of bankruptcy and crippling illness on the 1 it strikes.

 

[PL198]

yeah I mean we might as well give all the poor people 10k each, because there are so many people that actually work and it would be a small cost distributed across, right?

 

[PL198]

No, you're just making up an extreme number that is laughable.

It would be the majority who would be unable to afford care.

using the numbers you provided "100s to 1000s"

 

[Cytarabine]

yeah I mean we might as well give all the poor people 10k each, because there are so many people that actually work and it would be a small cost distributed across, right?

You're conflating insurance with subsidized insurance. If everyone was paying the same premiums, or at least premiums not adjusted by income, there's no "handout". It's just a service, a service that I would purchase if i was anything but extravagantly wealthy to the point where I wouldn't be phased financially even if i was one of the unlucky ill

 

[KnuxNole]

I don't think I can afford substantial health care...I'm poor as hell...I'm thankful i have not needed any operations or expensive meds :O

 

[TooMuchResearch]

The entire economy will go "belly up" due to ordering of non-indicated diagnostic tests?

Interesting.

Edit: Also not sure what the article you posted has to do with your original comment. Two completely different and unrelated things.

No, they're very related. The article lays out ethical guidelines with regard to deciding which treatments will be covered.

 

[TooMuchResearch]

http://www.nejm.org/doi/full/10.1056/NEJMp1409696

I don't think it's unreasonable to think a fair portion of healthcare costs are for services (diagnostic or therapeutic) with dubious benefit. To say that's the sole reason the entire economy will go belly up is hyperbolic, but it's certainly an element of healthcare costs, and the rise in healthcare costs relative to GDP is certainly a dangerous situation economically

What most people don't see is the volume (total number of and cost of) studies medical providers want/try to obtain that aren't approved due to no proven benefit, better alternatives, non-indicated studies, etc. Huge, huge, unrealized costs.

 

[tmn]

I agree that there should be some degree of personal responsibility for one's healthcare costs.

But it's pretty d*** unthinkable to say, "Your kid has cancer. Have a few hundred thousand laying around? No? Sucks to suck."

There is a certain amount of social responsibility built into the system, and I would guess that most people are okay with sharing the burden a little bit.

 

[Psai]

12 weeks of harvoni for hep c costs 100k. Who should pay? Is it worth it?

 

[xffan624]

12 weeks of harvoni for hep c costs 100k. Who should pay? Is it worth it?

If you ever get it from a needle stick as a resident (and not having 100K lying around), I doubt you'd ask that question.

 

[beachside]

There is a certain amount of social responsibility built into the system, and I would guess that most people are okay with sharing the burden a little bit.

I think the objection has more to do with the fact that we're subsidizing the care of the average person, rather than the 1 in 100 case. Legislation is what mandates a certain level of healthcare insurance, which is often priced above what people can afford. I suggest we rethink the concept of healthcare. For example, you could provide catastrophic coverage, generic prescriptions, and semi-annually primary care appointments to everyone for negligible cost.

The real cost of insurance is in long-term recurring conditions like type II diabetes, which by the way is mostly self-inflicted. Arguing that everyone has a right to a triple bypass surgery due to obesity is a bit different morally from covering a kid with cancer, or a mom that's been hit by a car, isn't it? Yet it's the linking of these very different types of "insurance" into one required product that prices most people out of the ability to afford their own care.

 

[beachside]

If you ever get it from a needle stick as a resident (and not having 100K lying around), I doubt you'd ask that question.

That's a worker's compensation claim. If you catch Hep C by shooting up heroin on the streets, that's a different argument.

 

[xffan624]

That's a worker's compensation claim. If you catch Hep C by shooting up heroin on the streets, that's a different argument.

What if you get it sitting on a bus stop bench where some a*hole left his needle? Or exposed at a tattoo parlor? Or blood transfusion? There are plenty of ways to get Hep C that don't require you to break the law or be at fault.

 

[TooMuchResearch]

What if you get it sitting on a bus stop bench where some a*hole left his needle? Or exposed at a tattoo parlor? Or blood transfusion? There are plenty of ways to get Hep C that don't require you to break the law or be at fault.

But we're still only going to use it in carefully selected cases without alternatives. If we give it to everyone with Hep C, it will bankrupt us.