Putting Patients and Physicians in an Unnavigable Maze
Miranda Yaver for Can We Still Govern?:
As news erupted across the country on December 4, 2024 that the UnitedHealthcare C.E.O. was killed in New York City, alongside rightful condemnations of violence was an outpouring of frustration with delays and denials of coverage, predominantly at the hands of private health insurers.
To casual observers of the American health care system, it might seem puzzling that in the world’s wealthiest nation, there would be such widespread grievances about barriers to prescribed medical care. But to many Americans – especially those with chronic medical challenges – this only scratched the surface of health care burdens and the intensely political processes driving these barriers.
Every day across America, people learn that they cannot pick up prescribed medication or schedule a test or procedure because their insurer has not provided prior authorization, or required pre-approval for prescribed care.
In prior authorization’s nascency in the 1960s, it was quite narrowly circumscribed, such as requiring physicians to certify the necessity of a continued hospitalization. As health care inflation and soaring Medicare costs intensified cost containment pressures, America expanded its reliance on managed care. With it came new incentives: coverage decisions were made not simply by prescribing physicians (who in fee-for-service arrangements had some degree of perverse incentives to overprescribe), but by entities with fiduciary responsibilities to shareholders and obligations to contain costs and maximize profits.
Utilization guardrails proliferated, ostensibly to mitigate waste. What began as certification of hospital lengths of stay expanded to prior authorization for costly drugs (and even some less costly ones), high-tech imaging, and many surgeries and procedures. What may have begun as an effort to curb overprescribing has resulted in the delay and denial of medically necessary care, along with the imposition of burdensome processes to reverse them. That is the story I tell in my new book, Coverage Denied: How Health Insurers Drive Inequality in the United States, drawing on interviews, a nationwide survey, and administrative data.
The Prevalence of Coverage Denials
Because health insurance is fragmented across public and private payers, precise denial rates are difficult to determine and consequently, most analyses focus on slices of the market. For example, KFF finds that roughly 1 in 5 claims are denied each year by Affordable Care Act marketplace plans, though KFF’s analysis of prior authorization denials by Medicare Advantage plans revealed a lower denial rate of just under 8 percent. And Optum found through analysis of hundreds of millions of claims that the denial rate has increased from 9 percent in 2016 to 12 percent in 2023.
Surveying 1,340 patients nationwide, I found that 36 percent of survey respondents experienced at least one, typically more than one, coverage denial. These denials were for wide-ranging care, from prescription drugs to behavioral health to imaging to surgeries, highlighting the breadth of this practice in modern health care delivery.
Denials can occur pre-treatment (through denial of prior authorization) or post-treatment (a claim denial). Both are destabilizing for the patient and burdensome to rectify, but their effects are felt quite differently: prior authorization can keep care out of reach, while claim denials can jeopardize financial security and drive medical debt. While I do not observe pronounced disparities in susceptibility to being denied in the first place, the administrative and financial burdens of denial fall inequitably, with patients from marginalized backgrounds bearing the brunt of this managed care tool.
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You don’t have to feel good about these reactions to a human tragedy to understand why anybody associated with the insurance industry would
Jonathan Cohn at HuffPost:
The questions surrounding the killing of UnitedHealthcare CEO Brian Thompson are going to take a while to answer definitively, even if police in Pennsylvania have now arrested and charged a man in connection with the shooting. The question of how Americans feel about the health insurance industry, on the other hand, leaves little room for doubt.
On social media and in everyday conversations, Americans have joked about last week’s shooting in New York ― and in some cases even suggested that Thompson deserved to die ― because of what they say his company and his industry have done to stop people from getting health care.
As HuffPost’s Jennifer Bendery and Arthur Delaney reported last week, lots of people wrote variations on “thoughts and prayers are out of network,” invoking a familiar piece of insurance terminology. Under an item where New York officials sought tips on finding the killer, one commenter said “my regular insurance doesn’t cover vision so I can’t really see” while another wrote “we need prior authorization first” — once again, using insurance company lingo.
You don’t have to be a corporate shill to find that reaction dehumanizing and disturbing. Taking satisfaction in somebody’s killing feels like the sort of thing that was clearly out of bounds before social media made it easy for people to express their worst instincts aloud and then be rewarded for it with even more attention.
“In some dark corners, this killer is being hailed as a hero,” Gov. Josh Shapiro (D-Pa.) said in a Monday news conference detailing the latest developments on the case. “Hear me on this: He is no hero. ... In America, we do not kill people in cold blood to express policy differences or a viewpoint.”
But you also don’t have to condone the online reaction, let alone the killing itself, to understand where it came from or why somebody associated with the insurance industry would inspire such hostility. And you don’t have to think commercial insurers are primarily responsible for the problems of American health care to spot the role they’ve played in its well-documented dysfunction.
How And Why Insurers Became So Unpopular
That role starts with the limits on medical care that have been the reference point on social media for the past week.
More than half of Americans with private insurance say they’ve had trouble using their coverage ― like running into treatment denials or struggling with small provider networks ― according to polling from KFF, the California-based health care research organization. The number is even higher for those who say they have health problems, which suggests the people most likely to encounter these obstacles are the ones who need health care the most.
These obstacles have existed for a while, and this is not the first time outrage over them has spawned a broader conversation about whether to curb insurance industry behavior. Back in the late 1990s, Congress spent several years debating whether to pass a “patient’s bill of rights” that would have given everyday Americans more power to challenge treatment decisions and even sue insurers in court.
You could tell the idea was popular by looking at the polls, which showed strong support from across the political spectrum. Or you could just go to the movies. In a key scene from the 1997 film “As Good As It Gets,” a main character played by Helen Hunt cursed insurers as “fucking … bastard pieces of shit” because they had denied tests and treatments for her asthmatic son. Audiences around the country broke into spontaneous applause.
At the time, the insurance industry and its allies argued that their limits on care were cutting down on unnecessary, sometimes harmful treatments that people didn’t really need — and, more importantly, holding down the cost of health care. If not for tools of what became known as “managed care,” insurers said, Americans would have to pay even more when they went to the doctor’s office, hospital or pharmacy, and many would have to skip care altogether.
Insurers and their allies make the same arguments today. And they are not exactly wrong when it comes to the deeper problems of American health care or the role insurers can play in addressing them.
There are reams of data to suggest the system is rife with mistreatment and over-treatment, and that the main reason American health care costs so much is that the providers and producers of care have so much power to set such high prices.
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How Insurers Behave Today
You can still see vestiges of that approach in organizations like Kaiser Permanente, the nonprofit descendant of those shipyard clinics. And while it’s hard to quantify insurer performance, one telling measure is the rate of treatment denials — which for Kaiser, according to a recent report from the website ValuePenguin, is just 7% of claims.
But the industry average is 16%. The industry leader at 32% is UnitedHealthcare, the company Thompson led.
And it’s not just the volume of denials raising questions about the conduct and priorities of big commercial insurers. It’s the nature of the denials, which have come to light through legal proceedings, congressional testimony and journalistic exposés. Among the latter was a monthslong ProPublica investigation of algorithms and other tools United was using ― as the report put it ― to “police mental health care with arbitrary thresholds and cost-driven targets.”
United told ProPublica its practices were “an important part of making sure patients get access to safe, effective and affordable treatment.” Providers, patients and mental health care advocates who the reporters quoted in the article disagreed, arguing the limits routinely deprived people of care they needed.
That is the very same thing Miranda Yaver, a health policy professor at the University of Pittsburgh, found in her research for a forthcoming book about American health insurance companies and the ways they restrict treatment.
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How Insurers Helped To Build The U.S. System
Reformers have been trying to create a system like that here in the U.S. for nearly a hundred years. They’ve never been able to overcome the political opposition.
Whole books have been written on the complex story of why this kept happening. A big, politically inconvenient part of the saga is that most Americans have health insurance and, notwithstanding their feelings about the industry as a whole, are wary of giving up what they have.
But another big part of the story is the opposition of industry groups that profit from the status quo. That very much includes health insurers, who eagerly joined the fight against Harry Truman’s national health insurance proposal in the late 1940s, led the charge against Bill Clinton’s ill-fated universal coverage plan in the early 1990s and pushed back on the (far more modest) reforms that eventually became the Affordable Care Act, aka “Obamacare,” in the late aughts.
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The data backs up that claim: Administrative costs in the U.S. health care system are the highest among economically advanced counties. The same goes for the salaries of American insurance executives that at the high end of the scale can exceed $20 million a year.
Again, none of that justifies celebrating one executive’s slaying, let alone the killing itself. And depending on your political priors, it may not even justify forcing insurers to change their behavior. But making the case that their practices are beneficial means convincing skeptical Americans who were clearly angry at insurers before Thompson’s killing and are unlikely to change their feelings any time soon.
The killing of UnitedHealthcare CEO Brian Thompson at the hands of Luigi Mangione reveals a dark underbelly about the legitimate frustrations aimed at health care insurers, who hand out routine denials or delays of service to its customers.
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