Senate Republicans are renewing their efforts to dismantle the Affordable Care Act (ACA). In doing so, the Senate’s Better Care Reconciliation Act creates a once-in-a-generation opportunity to ensure insurance companies actually provide care for patients.
The focus of the Obama administration was always on increasing raw insurance coverage for its citizens. That is, on measuring so-called “covered lives.” But the deeper focus needs to be on whether these “covered” individuals are actually able to receive the care they need.
Pre-authorization or prior authorization is a tool insurance companies use to limit the amount of services they provide for their customers. In essence, it’s a simple way to reduce costs by delaying or not approving planned, non-emergency (elective) surgery for patients who need it. As the ACA made insurance company profit margins tighter, the companies turned to other profit-making strategies. This is frustrating to patients, costly to doctors, and violates the patient-physician relationship.
Focus on Patients, Not on Insurance Companies
Republicans can begin to fix this problem. Reform can be pro-market without being pro-business. That is, policy improvements can be pro-patient without fueling the insurance oligopoly.
The actual pre-authorization process is cumbersome. After a surgeon and his or her patient decide on a treatment plan, the insurance company must pre-approve the treatment or it won’t pay for it. If the insurance company won’t pay for the procedure, the patient likely won’t have surgery.
The very involvement of an insurance company in the actual health-care decisions of a patient and doctor should cause great pause. The most vital element of our entire health-care apparatus is the patient-physician relationship. To the surgeon, it’s sacrosanct. Insurance companies are trying to disrupt this for financial benefit.
The concept might be mildly tolerated if the pre-authorization process were grounded in patient related data and outcomes. It is largely not. It’s a fiscal instrument.
After an insurance company denies a surgery, the process usually moves to a peer-to-peer review. The surgeon and an insurance company representative working for the industry argue the merit of the case. The only caveat is that these are almost never actual peer-to-peer discussions. It is not uncommon for a neurosurgeon to have to argue for a case against, say, a pediatrician or a retired emergency room doctor working on behalf of the insurance company.
As intelligent or knowledgeable as these individuals may be, they have never performed the surgery in question. They are not practicing neurosurgery. They have never been forced to have the difficult conversations with neurosurgical patients. They are not critically writing, presenting, or reviewing scientific data in the field. It would be akin to having a policeman trying to tell a firefighter which fires he can put out. It’s inappropriate.
Trying to Transfer People’s Problems to Another Company
The approval or denial process is not developed or regulated by thought leaders in certain fields individually reviewing cases to ensure that physicians in the community are adhering to the strictest quality standards to ensure the best outcomes. It is just an intentional cost-saving administrative hurdle.
As such, the process is an effective deterrent. A busy clinician and his or her staff struggle to find the time to fight for every patient. That’s the very goal of the insurance company. It wants to delay care. Nearly 50 percent of patients who bought insurance on the ACA marketplace will switch insurance carriers in the next year. If the insurance company can frustrate, pause, and delay, the procedure can become another company’s problem in another fiscal year. If it can wait until the patient is 65, when Medicare kicks in, the government will pay for it.
Our group’s new study in a leading neurosurgical journal proves that the insurance companies are specifically targeting higher-cost procedures in this practice. In our series, surgeries involving instrumentation, or spinal fusions, were the most likely neurosurgical cases for insurance companies to delay. This data was from nearly 2,000 patients over a year. Certain insurance types are bigger culprits than others.
This is not about good medicine or clinical indications, it’s about limiting expenses. What is even more frustrating is that it attacks individual patients. And it is the patients who suffer.
When People Don’t Pay Their Own Expenses
Now, there is a reason for this practice; the cost and incidence of spine surgery has skyrocketed. The government is left to foot the bill. Medicare payments for lumbar fusions alone increased nearly 500 percent over a decade. But that is a science and policy issue. Surgeons are working ferociously to standardize and predict surgical indications and outcomes. Policy makers are contemplating legitimate free-market ways to reduce health-care cost and improve efficiency.
The issue at hand is that the ACA mandated that customers purchase the product of a private insurance company. This was a government-subsidized distortion of free-market principles. The impact of the pre-authorization process serves as a cautionary tale about the multiplying effect government intervention can have on business failures. Perverse incentives accidentally hurt, frustrate, and harm more people.
The challenge of true long-term free-market reform will be reducing moral hazard, the phenomenon whereby when people don’t have to bear responsibility for their actions, they are more likely to make increasingly risky decisions that end up increasingly hurting their neighbors. Republicans reformers need to close the distance between the entity paying for health-care and person actually receiving the benefit.
However, this should not be manipulated to allow insurance companies the ability to delay or deny care to an individual patient. It hurts people and destroys the patient-physician relationship. Surgeons have been quietly fighting this battle for their patients on a daily basis. It’s time that Senate Republicans enter the ring.