Thursday, December 31, 2009

Orient: Is it Always Better to Have Health Insurance?

Dr. Jane Orient asks the provocative question, "Is it Always Better to Have Health Insurance?"

In particular, she describes a patient who lost her insurance and paid $900 out-of-pocket for treatment to save her eyesight. She didn't have $900 immediately, but was able to work out a time payment plan with the treating physician.

In contrast, she describes what would have happened if the patient had "coverage" from the government:
...Now, what would have happened if the Medicaid program hadn't cut her off -- because she earns $100/month too much? In that case, she wouldn't have had to worry about the bill.

But -- the receptionist would have had to say: "You'll need to fax over a referral."

A Medicaid patient can't be billed, except for a nominal copayment. Without a referral, Medicaid can’'t be billed. So if the specialist, or in this case subspecialist, sees the patient, he cannot be paid. Moreover, he is probably violating a rule and conceivably might be prosecuted for soliciting business (that's called "fraud"). Discounts and freebies are marketing strategies, after all, and the poor and vulnerable have to be protected.

Not just any doctor can give the patient a referral. This doctor couldn't. It has to be the patient's primary care provider, who is contracted with the patient's plan. And the specialist has to be in the plan too.

Say that a seizure patient needs to see a neurologist promptly to have his medications adjusted. Sorry, the emergency room doctor can't write the referral. Neither can the hospitalist who is discharging the patient from the hospital. It has to be the "primary." If the primary happens to know the patient, he might just send the referral. But most of the time, the patient will have to come in. The primary won’t want to risk getting an unnecessary referral or an incident of "inadequate documentation" on his report card.

For a retinal problem, there are probably three hurdles: the primary gatekeeper (who might not even think of the diagnosis), then the general ophthalmologist (who will make the diagnosis but can't treat it), and finally the subspecialist. All probably have waiting times for appointments, especially for Medicaid patients. Most doctors can’t afford to see very many of those.

Not just Medicaid, but all managed-care plans have a structure like that. It's part of the cost-containment strategy. I know of three insured patients who had retinal detachments. They all had premonitory symptoms, and they all -- eventually -- had elaborate and costly operations, as many as six procedures. They were "covered," and they didn't get a bill for $900, but they had a poor visual outcome that might have been prevented by prompt treatment.
(Read the full text of "Is it Always Better to Have Health Insurance?"; link via JG.)

Dr. Orient's analysis vividly illustrates the point that "coverage" does not equal care.

Furthermore, government policies that attempt to guarantee "coverage" will create bureaucratic regulations and cost-control guidelines that will restrict the ability of physicians to offer actual care to their patients.

Or as Dr. Orient puts it:
Insurance is supposed to help you pay bills in the rare event of a catastrophe. If it morphs into a scheme for emptying your wallet in advance, and then prevents bills by preventing treatment, we just might be better off without it.