RX or Red Tape? : New System Designed to Cut Health Care Expenses, but Are Patients Paying Price?

Doris Bartlett became a widow at 4:25 a.m. on May 5, when her husband died of a massive heart attack. Complicating her grief, so she “cannot get through it or past it,” is the thought that his death might have been avoided.

Robert Bartlett was scheduled to receive a pacemaker April 24 at San Gabriel Hospital. But when the cardiologist called, Barlett’s insurance company wouldn’t approve the $15,000 procedure over the telephone. Because his was not an emergency case, meaning Bartlett wasn’t being rushed to an operating room, the doctor would have to submit a written request, the insurance company said. The letter was mailed, surgery postponed and Bartlett went home to pack his overnight bag and wait.

‘Call Never Came’

“We waited two whole weeks, every day expecting to go to the hospital and get this over with. But the call never came,” Mrs. Bartlett says.

The insurance company, which later said the request was “delayed in the mail room” until May 8, three days after Bartlett died, further claims he didn’t need written approval in the first place.

Would Bartlett have lived if he had received the pacemaker? His cardiologist cannot be certain; an autopsy requested by Mrs. Bartlett proved inconclusive. She is left with her grief and with her questions: Who is to blame and how could such a horrible mistake happen?

The answers are complicated. And though Bartlett’s situation is extreme, it graphically illustrates changes that will confront millions of Americans who get sick and try to use their health insurance to pay for surgery and hospitalization.

They will find that insurance companies no longer cover bills just because a doctor recommends surgery and patients have faithfully paid their premiums. To the growing confusion of patients and frustration of physicians, the traditional doctor-patient relationship now includes two other players: insurance companies and a new industry called utilization review.

About 200 independent utilization review firms--mostly run by financial, not medical experts--exist solely to help reduce skyrocketing medical costs. They have been so successful at the task that most insurance companies across the country now use their services to evaluate--and sometimes to challenge--

treatments prescribed by doctors for insured patients. Some firms, like Blue Cross of California, have set up their own in-house review boards.

All work essentially the same way: For non-emergency hospital procedures, insured patients must get advance authorization from the review firm to get full benefits. This is usually done by calling a toll-free 800 number, where nurses seated at computers will compare a proposed treatment with “acceptable medical practice.” If the nurse is uncertain, the case will

be passed to a review firm doctor. If the procedure is deemed necessary, the firm will approve payment and dictate in advance how many hospital days will be paid for.

If the treatment is deemed unnecessary, the review firm may demand a second medical opinion and may ultimately deny payment. If a patient needs a longer hospital stay than the review firm--not the doctor--prescribes, the insurance company will not pay unless the doctor documents the need for it.

Caught in the Cross Fire

In such a complicated approval process, patients sometimes get caught in the cross fire between their doctors and the review firms--which in Bartlett’s case may have proved deadly.

To avoid these hazards, experts say, consumers should be prepared to act as their own advocates, intervening on their own behalf when delays occur and seem to jeopardize their health care. They can call the 800-numbers listed on their health insurance cards or their employers’ benefits departments. In some cases, a call from the insured is enough to jiggle the system into performing more efficiently.

But doctors’ concerns run deeper. They bemoan the “bottom-line” mentality that permits nonmedical personnel to review their once sacrosanct decisions. Many say the review firms put them constantly on the defensive--and on the telephone--to justify their judgments.

These same doctors, however, also concede that no better way has been found to reduce wildly escalating medical costs and curtail abuses by physicians who prescribe unnecessary tests, surgeries and hospital stays.

Even Dr. Brian Gould, vice president and medical director of Blue Cross of California, expresses ambivalence. He says the review process helps reduce the “enormous waste and inefficiency in health care,” and the many “unnecessary tests, surgeries and office visits” to which he says patients often are subjected: “It’s not reasonable for physicians to spend millions of dollars of other people’s money without having to justify the value of the services performed.”

On the other hand, he says the review process “is becoming so administratively burdensome that it will collapse under its own weight. It’s not particularly cost-effective to double-check on every decision that a physician makes.”

In future, he says, insurance companies will arrive at a method of payment “for doing the right things rather than more things.”

Mounting Paper Work

Meanwhile, physicians are grappling with the present review system, which, “is a nuisance and a tremendous amount of paper work,” says an internist affiliated with Cedars Sinai hospital, who prefers not be identified.

The system lacks the flexibility and judgment that health care professionals, not statisticians and accountants, can provide, he argues: “We are forced to stretch the truth in the charts just to keep a patient in the hospital for observation. We’re dealing with complicated health issues and we’re being dictated to by computerized charts at a non-medical firm. I fight it, I ignore it, I emphasize things on the charts that would allow my patient to stay.”

Doctors and nurses tell of daily problems with the review process. A woman, for example, is now in San Gabriel Valley Medical Center without insurance because she desperately needs care, because she is the mother of a staff doctor “and because we expect to win our lawsuit against her insurance company,” says Alice Edmiston, R.N., director of clinical case management for the hospital.

“The patient,” she says, “had breast cancer which progressed to bone cancer, for which the oncologist prescribed chemotherapy in the hospital. The (review) company claimed the chemotherapy was ‘experimental in nature’ and ‘just a salvage operation.’ ”

To refute that charge, the hospital called in another outside review firm, which declared “the prescribed treatment was quality in nature and not experimental,” Edmiston says, adding that the hospital also sent printed “statistical medical clinical evidence showing the treatment was efficacious and that as many as 53% of the patients have responded” to it.

Payment was--and still is--denied.

Looking for a Loophole?

Edmiston says Medicare and MediCal would approve the prescribed therapy but the particular review agency disapproves it because they are “trying to get out of paying by way of a loophole.”

The “salvage operation” phrase so incensed the patient’s husband that he wrote his own plea to the insurer, with a copy to his employer of 41 years, through which he has health insurance. The letter’s last line reads: “I love my wife and do not want to consign her to the trash heap.”

So far, no reply has been received.

“It would cost us less to treat the patient free than to sue the insurance company, but we’re doing it to help future patients with the same problem,” Edmiston says.

Still, she doesn’t argue for scrapping the whole review system: “I remember the old days--back in 1980 and 1981--before the health-care revolution. We had a patient on our surgical floor who wasn’t there for surgery, but just for pampering. Her physician admitted her on a pretext, and the insurance company paid. That was total misuse and not what hospitals are for. Something had to be done to stop these abuses, and the system is mostly working.”

Dr. William Plested, a thoracic and cardiovascular surgeon in Santa Monica and president of the California Medical Assn., says the review process is controversial: “The original intent was to practice the best type of medicine and have it be cost-effective. But you can also save a lot of cost by withholding necessary treatment. That’s a fine line to walk.”

Plested says review firms put up “too many roadblocks and hoops for doctors to jump through” before approving payment to patients, many of whom have no idea what their policies cover.

Rules and Regulations

Doctors also don’t always know the answers, he says. “There are some 800 health insurance companies selling policies in the state of California. They each have different rules and regulations. There’s no way a physician can keep up. It’s humanly impossible.” Besides which, he says, “I have a contract with my patient, not with his insurance company. If you come to me, I am going to do what’s best for you. And you, the patient, should deal with the insurance company.”

It rarely turns out that way. Plested says he goes through “whatever contortions are necessary” to get review approval. This can take hours on the phone, waiting to talk to people who “can’t even pronounce the names” of procedures he’s discussing and who certainly are unequipped to make long-distance decisions about individual cases. “I can hang on for an hour, waiting. And if I hang up, I have to start the cycle all over again.”

He is about to hire a full-time staffer to handle the review process. But finding the right person is a problem. “It’s a job description that didn’t even exist three years ago. I am convinced this system is so inefficient that it will not last.”

Dr. Rheinhold Ullrich, an obstetrician-gynecologist in Torrance and president of the Los Angeles County Medical Assn., sees “justification on both sides of the system.” Doctors equipped to handle reviews have few problems with them, he finds; those lacking the time or office personnel to deal with increased red tape probably run into trouble.

It’s a whole new world of medicine, Ullrich says, “and in the long run the patient generally comes out just fine. Except for some of the elderly. They are very intimidated, believe whatever they’re told and don’t pursue it any further. They shouldn’t settle or give up or believe it’s the end of the line. They should remember the crucial thing about utilization review is that these firms are not allowed to practice medicine.”

Ullrich’s full-time insurance administrator, Jackie Feldkamp, says her load has increased steadily for the last three years, when review procedures “really became complicated.” Her job is to get phone pre-certification for each procedure, after which the patient, the doctor and the hospital receive written notice from the review firm, including the number of days allowed.

“They usually start off with a relatively short time,” she says. “A hysterectomy, for example, will get four days and four nights. That means the day of surgery and three post-operative days. Quite frequently that is not enough time. So you call and say, ‘Miss Jones needs another day.’ You can’t say she is elderly and lives alone or she’s tired; that would be denied. Only such things as (the presence of) elevated fever, (or need for) catheters or intravenous are allowed. And you have to present properly to the (utilization review) firm. If you are polite, don’t have a chip on your shoulder and meet the criteria, they’ll usually say yes. They’re quite nice. . . .”

What Is Reasonable?

But Dr. Pamela Craig, a general surgeon in San Gabriel, sees no justification for some of the limits on hospital stays enforced by review firms: “A typical case would be a recent patient who was allowed three days for gall bladder removal. The day of surgery counts as one day. That means she had to be discharged on the second post-operative day. In my experience that is not reasonable.”

As predicted, Craig’s patient was unprepared for release on the designated day. “An RN working for the (utilization review) company called and asked why she was still in hospital. She told me I wasn’t conforming to standard practice in the community and that all her other doctors are able to get their patients out.” Craig explained that her patient couldn’t yet eat and still had pain requiring injections. The nurse then wanted to know: Why was she still in pain? “I explained that I can’t make the bowel function any faster than it wants to. It’s a post-operative condition called ileus, where the bowel goes on strike for a few days after surgery,” Craig says.

She says she is “not in the business of justifying how I practice medicine” but she, like most other concerned physicians, spends inordinate amounts of time doing so to get quality care for her patients.

Dave Brisbin, manager of communications for Cost Care, of Huntington Beach, has heard all the complaints and more. His firm helped pioneer utilization review, and “now serves over 6,000 clients dealing with 3 million lives.” Medical care costs, he says, are still out of hand--and increasing. Cost-containment firms are the only hope he sees.

As technology expands, more diseases become treatable, he says. But first-generation technology is very expensive. “We also have suit-happy citizens who charge doctors with malpractice. And test-crazy doctors trying to prevent malpractice suits by running every test imaginable to make sure they miss nothing.” These costs are passed on to consumers, he says. And in many cases, the consumer’s employer is footing the bills.

That’s why, in the past five years, more companies are raising employee contributions to insurance plans and raising deductibles and co-payments. “Employers are opting out because they’re becoming tapped out,” Brisbin says. “GM pays something like $700 or $800 per auto to insure their employees, whereas Japanese firms pay only about $200. They just can’t afford to keep footing these bills.”

Dr. Ronald Bronow, president of Physicians Who Care, disagrees sharply with Brisbin: “Doctors should stand up to utilization review firms and tell them to go to hell. The whole insurance industry is trying not to pay for anything. They use the pre-existing condition scam more and more, ruling out payment for things that never pre-existed. They do everything they can to get patients out of the hospital, not to mention the fact that they won’t let patients into the hospital the day before surgery for pre-operative care. The doctor is supposed to be the advocate of the patient. This is being taken away, in the guise of controlling costs.”