Pound Wise and Penny Foolish

Personal experience shows that short-sighted insurance denials cost more in the end.

Healthcare reform seems to be on everyone’s mind. There is a definite need to push through the morass and work toward real healthcare reform. The “fluff” or “pie in the sky” statements may sound wonderful as they flash across our television screens, but they really mean nothing. It’s time for action, not just posing for the media. 

One of the key issues in the healthcare reform debate is how to increase efficiencies and lower costs. The story I’m about to tell demonstrates how broken our system really is, and where money could be saved were it not for the short-sighted nature of these proposed reform efforts.

I have a fairly rare chronic disease that had not been well treated for more than 30 years. A few years ago a new treatment was approved by the US Food and Drug Administration (FDA). But instead of paying for this treatment, the BlueCross BlueShield Association (BCBSA) along with non-BCBS plans classified it as investigational. Earlier, several longitudinal studies showed it had been successful. 
 
In 2006 I found myself at the end of the proverbial rope. After my doctor mentioned these studies, indicating the newer treatment could alleviate my symptoms, I asked him to submit a preauthorization to my insurance company requesting approval. The initial phase involved surgery and an implant that cost more than $20,000. You can guess what occurred next.
 
My insurance company denied the preauthorization, calling the treatment “investigational.” I appealed their decision to all levels inside my insurance company to no avail. Fortunately a little-known law, enacted in 2001, allowed me to appeal their denial to an independent review board, which overturned my insurance company’s decision, requiring them to cover the surgery and implant.
 
As I went through the internal appeals process, I kept telling my insurer they would realize a significant cost savings by providing this treatment. They could easily tell just by looking at the cost of hospitalizations, medications and expensive alternative “approved” methods of treatment. For example, one year I had reached my out-of-pocket maximum (the point where I’ve paid enough in deductibles and co-pays that the insurance company was required to pay for 100% of treatment that year) by mid-year. But my arguments fell on deaf ears until the independent review board realized what my insurance company hadn’t been able to comprehend. I cannot state with certainty that my denial was based on the cost of the surgery and implant, but I have my suspicions.
 
Since the surgery in December 2006, my condition has improved dramatically, treatment costs have plunged, and I have not had to be hospitalized. It all proved true. The treatment I received significantly improved my quality of life and, in the short run (over the span of a year or so) it resulted in a cost savings to my insurance company.
 
This is just one example of how our healthcare system can be very short-sighted. Before we can truly reform healthcare, a long-term approach needs to be adopted that will reap significant dividends. There is no quick fix. The time for lofty statements without fiscal backing should come to an end.
 
Chris Apgar is president of Apgar & Associates LLC in Portland.

 

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