Health Insurance
Health insurance is "an enforceable formal promise to furnish
a specified form of coverage to persons who meet contractual qualification standards."
[179]
In indemnity plans, also known as reimbursement
plans, participants choose their doctors, and patients, doctors, or hospitals
submit bills to the plan. The benefits of patient choice and portability in this
plan are obvious; there was, however, little incentive to provide preventative care,
and there were concerns that some physicians had financial incentives to provide
excessive care.
During the past 30 years, the managed care organizations (MCOs)
have had an increasing role in determining care.[180]
Managed care plans are arrangements between insurers and health care providers in
which patients pay the organization a fixed monthly fee and receive specified medical
services within a network of caregivers for no more than a nominal co-pay. At its
best, managed care can encourage preventative care, continuing patient-physician
relationships, collaborative relationships among primary care clinicians and specialists,
and cost-effective performance improvement programs. At its worst, managed care
can result in a capricious bureaucratic system that prioritizes short-term cost-containment,
the development of a young and predominantly healthy customer population, and the
use of procrastination to avoid paying for expensive care.[181]
MCOs accomplish these goals by using case managers to help coordinate care and by
"managing" physician and patient behavior through financial and administrative incentives.
Standard techniques include gate-keeping devices to control access to specialty
care and MCO-specific practice guidelines to limit imaging tests, expensive drugs,
and longer hospital stays. In MCO plans, the care has not yet been received, and
the physicians may have incentives not to provide care. It is hard for patients
to use the power of exit because employees may limit choice of plans, employees may
be unable to afford a costlier plan, and employees may not have frequent opportunities
to change MCOs.[182]
For these reasons, appeals
are the sole recourse for timely challenges of MCO decisions. Advocates suggest
that appeals should be done in a timely, informal, easy, and fair manner to ensure
that successfully appealed therapies are delivered promptly.
Appeals and other questions about coverage often center on whether
a diagnostic or therapeutic procedure is covered and whether it is a "medical necessity."
[179]
[180]
A study
[183]
looking at appeals for denied care found that
37% involve medical necessity determinations, 37% involved scope of contractually
covered benefits, and 20% involved out-of-network care. Medical necessity determinations
centered on areas of social uncertainty about the legitimate boundaries of insurance
coverage, particularly in the areas of surgery for obesity-related conditions, breast
alterations, varicose vein removal, bone density and sleep studies, and treatments
of scars or benign lesions. More explicit rules in these areas may minimize appeals.
[183]
Determining medical necessity is problematic. Historically, medical
necessity has been defined by clinical practice, but there have been suggestions
that determinations about medical necessity should be moved from standards of care
to clinical studies showing benefits in the general population. This approach has
been strongly criticized as inappropriately generalizing medical practice from general
evidence, particularly given the difficulty of funding and designing relevant studies.
Medical necessity is also influenced by the value individuals give to the procedure.
[179]
[184]
Consider
the different rates of success of uvulopalatopharyngoplasty for obstructive sleep
apnea. Given the various effects of obstructive sleep apnea on people, what rate
of procedural success is considered medically necessary? There is also the unsolved
question of whether the insurer must demonstrate that a treatment is unnecessary
or whether the patient has to demonstrate that the treatment is necessary.[180]
Physicians have the obligation to ensure that managed care is
appropriately performed, monitored, and legislated. Physicians should work with
MCOs to design systems that minimize conflicts of interest and should actively fight
abuses of individual patients. Anesthesiologists should examine MCO contracts for
inherent problems, such as compensation through financial incentives, poor appeal
processes, or unclear procedures for physician termination.[185]
[186]
[187]
