In an excellent recent article in the New York Times, a claim-handling practice by Anthem Blue Cross Blue Shield was brought into the public light. Anthem has begun denying its policyholders’ claims for coverage for emergency room visits if Anthem determines after the fact that the policyholder didn’t really need to go to the emergency room in the first place. Anthem is basing these decisions on what the final diagnosis of the policyholder’s condition turns out to be after being seen in the ER. For instance, a person with a heart condition who experiences heart attack-like symptoms and goes to the ER might have coverage for the ER charges (often thousands of dollars) denied if it turns out the symptoms were not a heart attack after all. This leaves the patient stuck to pay the ER bill out of pocket.
Apparently, Anthem’s has concluded that since the cost of an ER visit is much higher than a visit to an urgent care clinic or a primary care doctor, Anthem is going to scrutinize ER visits in this way. I can see multiple problems with this approach from the policyholder’s perspecitve.
First, as illustrated by the account of one of the Anthem policyholders interviewed in the the Times article, Anthem’s position puts the policyholder in the unenviable spot of having to self-diagnose before visiting the ER. If a heart patient is having heart attack-like symptoms, they should not have to gauge the nature and severity of the symptoms before deciding whether to seek treatment at the ER. That’s what ER doctors are for.
Wouldn’t it be tragic if an Anthem policyholder decided not to go the the ER for fear Anthem would later deny coverage if the problem turned out to be less significant than they thought, then died of (for example) a heart attack? How would Anthem defend itself in a lawsuit then?
Second, who at Anthem is making the decisions as to whether policyholders’ visits to the ER are covered? As noted in a previous post, in my experience deposing in-house insurance company doctors, it turns out they are often grossly unqualified to render the medical opinions they’re called upon to give. If my experience in lawsuits the health insurance industry is any guide, it’s likely insurance company doctors making decisions regarding ER visits to treat (for example) heart conditions will likely be (for example) family practitioners or internists not cardiologists. The gross unfairness of this situation should concern every Anthem insured. Plus, you can bet as Anthem’s profit increases as a result of this practice, other insurance companies are sure to follow suit.
Predicatably, Anthem apparently attempts to defend this practice by pointing out how much money it costs Anthem to pay for ER visits it thinks in hindsight were unnecessary. The Times article says Anthem believes “as many as 5 percent” of ER visits are unnecessary. Of course, Anthem will also say this “unnecessary” expense makes everyone’s premiums go up because Anthem has to pass these costs along to all of its policyholders. This argument, which insurance companies use at every opportunity, is just a scare tactic to distract the public from the real “money story” here.
Anthem has done extremely well financially, and that financial success is reflected in the amount of money Anthem’s top executives make. Anthem’s revenue for 2017 was over $90 billion (growing at an annual rate for the last five years of just under 8%). Anthem’s profit for 2017 was $3.84 billion ($10.5 million per day). The CEO of Anthem made $16.5 million in 2016 and $13.6 million in 2015. How much would Mr. Swedish’s bonus have been if Anthem had paid for ER visits without second-guessing them? Only $16.4 million?
Joseph Swedish, former Anthem CEO
The profit motive is a powerful force, even when people’s lives hang in the balance. This is the state of our health care system in this country today. Management people at health insurance companies are squeezing every possible nickel of profit out of their claim-handling systems while endangering the lives of their policyholders. All in pursuit of the compensation package that will make them wealthy at the expense of real people’s health and well-being.
Thanks to Reed Abelson (@reedabelson), Margot Sanger-Katz (@sangerkatz), and Julie Creswell (@julie_creswell) who wrote the Times piece on this telling subject.