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The game of life and death 

& & by Pia K. Hansen & & & &





Dennis Wright has been a diabetic for 25 years. Now 48 years old, he's managed the disease with insulin shots throughout the years, but his doctor kept suggesting an insulin pump instead. There are many arguments for switching -- such as convenience and a continuous supply of insulin which reduces the risk of insulin shock -- but Wright was hesitant.


"I looked at it as some kind of a leash, something I shouldn't do," he says. "I used to give myself four shots a day, but the pump is easier to use. It's like a catheter, it constantly feeds you insulin, and then when you eat, you pump in more."


Finally last year, Wright decided to give the pump a try, so a prescription was filled and submitted to his health insurance. The insurer requested back records of Wright's blood sugar levels.


"That wasn't a problem. There are, I believe, 16 million diabetics in the U.S., and of them probably 2 million are in complete control of the disease. I'm one of those 2 million, so I sent in my glucose monitoring records," says Wright. Less organized diabetics may not have had that option.


Shortly thereafter, Wright gets a letter from his insurer again requesting his glucose records. He calls in, saying the records are already there.


No, the insurer says, they never received anything from Wright.


"So, I sent them in again, and then I get this rejection letter," he says, "which stated that an insulin pump was not a medical necessity. I didn't know what to think, I mean, if I don't get insulin, it's pretty simple: I die."


Wright went ahead and appealed the insurer's decision to the Washington State Insurance Commissioner's office, which asked the company to reevaluate Wright's claim within 10 days.


"And what do you know, within 10 days I was approved," he says with a grin. And though he is happy his case is solved, he's upset with his insurance company for trying to get between him and the treatment his doctor deemed best.


"This is a perfect example of how health insurance works in this state," says Wright. "Back when I got diabetes, diabetics used to die before they lived 30 years. Today, there are many medical innovations and new drugs that may allow patients to live longer. But they are more expensive. This pump was $5,000, and I believe the insurer simply thought that was too much."


Although many people don't share Wright's illness, his story has become all too familiar. People have to fight to get the coverage they think they pay for every month. And it's not the doctor they fight -- it's the insurance companies that increasingly control what a doctor can and can't do for you.


Something as simple as finding the coverage you need is getting more and more complicated. Plans that look similar and cost nearly the same may provide very different coverage. And even though the insurance companies are regulated by state and federal laws, there are few places the individual consumer can turn to when it comes to protesting unpaid claims.


One of those places is the Washington State Insurance Commissioner's office, just like Wright did. But the question is what's going to happen to the healthcare system if everyone has to do so to settle a claim with his or her insurer.


"I'm grateful they helped me," says Wright, "but it's just not right that you have to go so far as to complain to the state to get to be taken seriously by your insurer."








cross the country, healthcare premiums and copays are going up as clinics and insurers scramble to cover rapidly increasing treatment costs. The Health Insurance Association of America (HIAA) just released a report saying that while insurance premiums slowed down in the early '90s (about the time managed care arrived), they are now rising at a rapid pace again. According to the HIAA, the cost of drugs and new treatment available for conditions that were considered untreatable just a few years ago, are two of the major factors behind the price hikes. The HIAA insists that its members don't take bigger and bigger cuts for themselves, saying that on average, 90 cents of every dollar paid in a premium is paid back in benefit payments for healthcare services.


But consumers still have to pay more for prescriptions -- especially for drugs that are not on their insurer's list of preferred drugs.


If consumers are frustrated by higher prices and shrinking coverage, doctors are frustrated by lack of payment and the ballooning bureaucracy they face when filing claims with commercial insurers. The American Medical Association (AMA) released a study in August revealing that among the approximately 18,000 physicians surveyed -- who provide care to more than 5 million people and have contracts with more than 275 health plans -- 38 percent reported that it takes them more than 45 days to receive payment on a clean claim submitted to the insurer.


According to the same AMA study, physicians have had to take out loans, lay off personnel or reduce services to keep their practices running, while they wait for payment.


Under heavy lobbying by the AMA, 39 states have enacted prompt payment laws trying to hold insurers to their part of the deal and force them to process clean claims in a swift manner. Neither Washington nor Idaho is among those states, and in 27 of the states where the laws are in effect, there is no definition of what exactly constitutes a clean claim. The insurance company gets to make that decision, essentially making the laws hollow.


Especially smaller clinics or doctors who practice on their own struggle to meet the demands filling out paper work imposes on them. They have little choice, since claims that are not deemed clean by the insurer simply are not paid.


"I do my own billing, and I'm pretty sure I spend almost half my time doing it," says Dr. Stuart Bramhall, a psychiatrist in Seattle. "Some patients on Medicare have three different insurers, and they all need their paperwork. Though I charge more for a short consultation, I sometimes only get paid $30. Then you have to deduct from that what it cost me to sit down and do all the paperwork."


Bramhall says the way the healthcare system works today, large amounts of money goes to administration instead of to actual care for the patients. Bramhall says the only solution to that problem is a mandatory statewide healthcare system which would streamline the filing process and put the medical decisions back in the hands of the doctors (see "Universal coverage by vote," page 18).


But not everyone agrees that getting the state more involved will make things better for patients and stabilize the healthcare market.


"The commercial insurers actually pay better than the federally funded programs. Medicaid pays the worst, the real crisis we are looking at is that Medicaid does not cover the treatment expenses," says Dr. John Gollhofer, who practices obstetrics and gynecology at the Rockwood Clinic. He's also the immediate past president of the Washington State Medical Association (WSMA).


"The only thing that keeps practices afloat is the commercial insurers. The state-sponsored plans won't solve the issue if they are broke, so I'm not sure we'd want to get the state involved more than it is."


Gollhofer adds that while more and more people become eligible for the subsidized programs, funding is not allocated to cover the increased cost of treating these new patients. The doctors are left with the choice of covering the cost themselves, or turning the patients away.


"You can certainly choose to see and not see patients, but I don't know for sure how doctors are dealing with this issue," says Gollhofer. "Anecdotally, more and more doctors are not taking in federally funded patients."


The patients who are being turned away often end up at emergency rooms and urgent care centers, where providing basic services, such as treating ear infections in children, are much more expensive than at a clinic.


A study just released by WSMA showed that in 1999, medical practices across the state suffered a net loss of $95,000 on average, and more and more are struggling to stay in business. This week, the Memorial Clinic in Olympia went into bankruptcy, and Gollhofer says we're likely to see more clinics close in Eastern Washington soon.


"It's a train wreck waiting to happen. If the clinics close because they can't afford to treat the state-funded patients, that will have an impact on those with private insurance as well," he says. "It's very simple -- you can't find providers if the clinics are insolvent."


Some doctors have completely given up dealing with insurance companies and now provide treatment only for cash payment. Simple Care in Seattle is following this model, and though some doctors in Spokane have dropped out of insurance networks, Gollhofer says hiring and retaining good doctors is a much larger problem.


"We are facing the difficulty, if not impossibility, in recruiting physicians, because people can go different places and get higher salaries," he says. "In Spokane, there are providers who leave the community or retire early because they don't want to deal with the lack of payment anymore." He says turning away patients goes against anything the WSMA stands for and what doctors believe in.


"The rational solution to the problem, as it looks right now, is that people with money will somehow be able to continue to buy insurance and services," says Gollhofer. "But those who are poor won't have a choice at all. That's not acceptable."








lthough the state and federally funded programs are under the most scrutiny right now, the commercial health insurance companies are often painted as the bad guys, and unfairly so, they think. They want people to better understand the challenging economics of their industry.


"I get really frustrated when people say, 'My insurance won't pay for this and that'," says Bill Akers, Group Health Cooperative's district administrator for Eastern Washington and North Idaho. "Most people have a contract that specifies what we cover for them. If your employer didn't pay for mental health benefits, well then they are not covered because of that. But people still say, 'Group Health won't pay'."


Group Health provides HMO plans, self-funded and deductible plans to about 80,000 clients in Eastern Washington and North Idaho.


"People pour a lot of money into their healthcare plans, but they really need to look closely to make sure they get the coverage they need," Akers continues. "Generally, in an HMO product, referrals are needed to obtain coverage except for access to emergency care and women's health care, but that doesn't mean all services require prior authorization."


Akers says Group Health is mostly concerned with whether the patient's insurance plan actually provides coverage for the requested service when processing claims -- much more so than with what type of treatment the doctor is recommending.


"When a patient sees a doctor, mostly what we try to do is ensure that the patient has that benefit that covers that visit," says Akers. "And no, that's not just about being fiduciary. People can still choose to pay for treatment that is not covered, but we want them to know that they have incurred a huge expense up front."


At Premera Blue Cross, another health insurance provider which is administered by MSC, the deal is pretty much the same.


"Our HMO plan has specific providers you can go to, and you need a referral from your primary care physician to see them," says Laura Dovey, MSC's communication specialist in Eastern Washington. "It's not really a question about what guidelines doctors work under. The issue is what is covered under your plan. The doctor should look for the best treatment, it's not like we tell them what to do."


So how come people get trapped in situations like Wright's, where the doctor recommends one thing and the insurance company says no?


"Things that are considered not normal or still experimental treatment are not covered. And this is not something we sit around and decide arbitrarily, that's based on national standards," says Dovey. "If the doctor says you should still have this specific type of treatment, we wouldn't say no. We would say that we don't cover that, and it's the patient's choice to continue with the treatment."


The key to receiving affordable healthcare in America today is employment. According to a study by HIAA, 13.6 million of the 17 million uninsured workers in the country are not offered healthcare by their employers. Though employer-sponsored insurance has been on the rise in recent years, people who work halftime or who work for employers with few employees, are less likely to be


offered health insurance and at the same


time also less likely to accept it if it is offered.


For the unemployed the picture is even bleaker.


But employers are finding it harder


and harder to be the middlemen in today's


healthcare market, and rapidly increasing prices may


soon scare them away completely. When the price of a


premium goes up, some employers cover the rate hike themselves; others pass it on to their employees.


"Employers are definitely backing away from that responsibility," says newly elected Washington State Insurance Commissioner Mike Kreidler. "But it's hard for them to make the choice as to either pass the increasing cost on to the employees or to absorb it. As the employment market softens, more employers are going to back out and more people will have to take more personal responsibility for their health insurance needs."


Some employers are considering going to what's called a defined contribution health plan.


"The employer will be saying to the employee, 'Here's $3,000 you can do with what you want, but that's all you are getting'," says Gollhofer. "It's not likely these dollars would be spent the right way. What we have here is a social problem, and we need to have a social contract, where all the people of the state say that the funding of health care for poor is our responsibility and that we will find a way of doing it."


The Patients' Bill of Rights, which was passed last spring, says that people must have "adequate choice among health care providers." This choice is especially important if people are to take on brokering their own health plans in the future. But Kreidler says providing choice may become increasingly difficult.


"I'm quite concerned about access, especially for the rural areas. It's difficult to put together networks in rural areas with all the services that are needed," he says. "Managed health plans are hard to maintain in rural areas, because there are so few people, but they are [the plans] with the lowest cost drugs. We want to work with rural areas and try to come up with a solution for this problem."


An important part of the health insurance market is access to independent plans. Currently, there are only two providers of such plans in Spokane County (Group Health and Premera). Both just returned to the market in December, after bowing out two years earlier due to high losses on the individual policies.


"I do have some empathy with the insurance carriers. They can't pay out more than they get in -- they're like any other business," says Kreidler. "But reconstituting the individual insurance market is something we are working hard at right now. These types of premiums are fairly expensive, especially for those pushing Medicare-age qualifications, but we are trying actively to get more insurance companies into the market by contacting some of the ones who have left the area already."


Though the insurance commissioner's office can help consumers settle disputes with insurance companies, it doesn't have any real say when it comes to the cost of the premiums.


"We have less authority over the cost. At the behest of the healthcare industry, the legislature took that away from our office," says Kreidler. "Managed care was the driver for the Patients' Bill of Rights, and we are here to make sure recommendations and decisions are made in the best interest of patients. And it's the failing on the Patients' Bill of Rights that we hear about. Things such as lack of coverage and stuff like that."


Kreidler says he sees his office as the neutral middle ground where insurers and patients can work out their conflicts. But he doesn't see any major changes in the way healthcare is provided to Washington residents in the near future.


"We have heard a lot from the people who push a statewide healthcare system, after a Canadian model," says Kreidler. "But I don't think that's ever going to happen. That may work for Canada, but Americans are not Canadians. I just don't think that's what people want."


Gollhofer, who was attending Physicians' Legislative Day in Olympia when we talked to him, says we better find a solution before the entire system collapses.


"I was listening to Department of Social and Health Services Secretary Dennis Braddock this morning, and he says he doesn't have a solution. As physicians, we are trying to prevent this wreck from happening, but apparently Olympia is willing to stand by and watch."

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