Viagra Shows the Potency of Insurers


The simple e-mail posting on an Internet discussion group about sexual impotence asked an intriguing question.

“My insurance is paying for eight Viagra pills every 30 days,” read the message from “Theodore.” “Are they trying to tell me something?”

Although Theodore didn’t answer his own question, the implication seemed clear: His insurance company had determined that sex twice a week--not once a week, not once a month--was about right. If he wanted more frequent sex, he’d have to pay for it himself.

Of all the reverberations triggered by the anti-impotence pill Viagra--ranging from an apparently endless supply of jokes to new marital dynamics among senior citizens--one of the most important is more subtle.


Viagra has brought into sharp focus the increasing role that health insurers, by default, play in deciding what’s important to society. Through a process that largely takes place behind closed doors, health insurers decide what to cover, shaping the behavior of millions of Americans.

Employers, who pay for most health insurance in this country, also play an important role in the process. They can decide whether a particular benefit, such as contraceptives, will be included in workers’ health packages. This influence is increasingly felt as employers pressure insurers to reduce medical costs and premiums.

Health insurers traditionally have made important decisions for people, but in most cases the judgments are straightforward. They pay to inoculate children against measles or for an operation to treat cancer. They generally don’t pay for cosmetic surgery--a breast enlargement, for example--or for baldness or diet drugs (except when obesity poses a severe health risk).

But as medical technology moves at a dizzying pace, where is the line between “medically necessary” services and those that simply enhance our lives by making us feel or look better, or enable us to enjoy an active sex life? And who should draw this line?


Today, medical innovations, the climate of medical cost containment and a new generation of so-called quality of life drugs--of which Viagra is only the beginning--have driven the debate into new territory.

And some observers, including managed care executives, are questioning the role of insurers.

“We find ourselves in the role of being private regulators and making public policy by HMO,” said Alan Hoops, chief executive officer of PacifiCare, the big HMO based in Santa Ana. “We’re in the business of constantly passing judgment on the societal value of a given protocol.”

Hoops added: “We are making very difficult decisions on questions that, frankly, have no right answer.”


Take, for example, Theodore’s question on the Internet.

How did his health insurer conclude that twice-a-week sex was “medically necessary”? Should members of Theodore’s health plan have to pay for him, and others, to enjoy sex if it means premiums for everyone--including those barely able to afford insurance at all--go up?

Moreover, sexual “need” varies greatly from one person to the next, noted Emily Friedman, a Chicago-based health policy analyst.

“There are people who commit suicide because of sexual incapacity,” she said. “But on the other hand, there are people who write Ann Landers and say, ‘My husband and I just decided we didn’t need to have sex anymore.’ ”


While many managed care firms say they are still reviewing whether to cover Viagra, Blue Cross of California was one of the first to decide to pay for the erection pill. The insurer will pay for six pills per month for men with an underlying medical condition, such as diabetes or prostate cancer, associated with impotence.

In arriving at the six-pill figure, Blue Cross said it consulted major teaching hospitals and university researchers and, of course, its own accountants.

“We decided that one pill a month clearly would cause a lot of ill will among the membership, and if you paid for 30 pills it would become cost-prohibitive,” said Peter O’Neill, a company spokesman.

Emotional Issues


The issue of medical necessity has become complex and emotional. It has surfaced in debates over whether insurers should pay for risky bone marrow transplants for breast cancer patients, and how quickly new mothers and their babies should be discharged from the hospital.

How much reconstructive surgery is truly needed for children with severe facial disfigurement? Surgeons could simply restore normal functions or do more elaborate, and more costly, work that would dramatically improve patients’ lives.

“Do we reconstruct the entire face or simply improve it?” asked John Golenski, a medical ethicist in Berkeley who does consulting for HMOs. “How to draw those lines is not clear in any insurance organization I’ve ever worked with.”

At the center of such questions is the fact that health care economics have become a zero-sum game. The drive to rein in medical costs means that when a health plan or employer decides to pay for a treatment such as Viagra, everyone pays--in higher premiums or lost coverage.


“We’ve had discussions with several large employers expressing significant concern over coverage of Viagra and what it would do to their pharmacy budgets,” said Dr. Sam Ho, PacifiCare’s medical director.

At roughly $10 a pill retail, Viagra forces the issue because it is expensive--and arguably optional from the insurer’s point of view. It has been estimated that perhaps 30 million U.S. men might have some form of erectile dysfunction. If 10 million of them began taking Viagra once a week, the cost would total about $5.3 billion a year.

“That we have a drug that appears to enhance male sexual capacity is a good thing,” said Friedman. “But is it worth it if it means losing a benefit for someone else, raising the cost of insurance for the poor or further stressing the finances of the public health care system? My feeling is the trade-off is not worth it.”

Who Decides?


Indeed, Viagra has opened a Pandora’s box of controversy over the insurance industry’s seemingly inconsistent coverage of other sexual and reproductive activity. Many cover birth control, but some don’t. Insurers generally do not pay for costly reproductive treatments, including certain infertility treatments.

To some, the willingness of insurers or employers to pay for Viagra--a drug used mainly by men beyond the normal child-rearing age, and thus to simply make life more enjoyable--is a clear reflection of who runs the nation’s economy.

“If this were reversed, and this was a drug that gave women better and longer orgasms, there wouldn’t be an insurer in the country that would pay for it,” said Friedman. “This is an issue of extremely powerful interest to men, and men are the decision-makers.”

As drug companies ponder Viagra’s blockbuster success and the prospects of a growing baby boomer population eager to look and feel younger, the impetus for more quality-of-life drugs seems obvious.


Golenski says that a decade from now the Viagra debate will “look primitive. The new pharmacology will have an enormous capacity to improve the performance levels of the human body, to let us live longer or better. And all of this will cost a lot of money.”

As it now stands, decisions about how to allocate medical resources and which benefits to cover, or not, mostly are made by insurers.

As health care is increasingly dominated by large, publicly traded corporations intent on maximizing profits for shareholders, should insurers be taking the lead on issues of such importance to society? Can the competitive marketplace handle these issues in a way that society will find acceptable?

Some ethicists think not.


“When you have the private marketplace answering these questions, the poor end up with less insurance and the better off with better insurance through private plans,” said Arthur Caplan, a bioethicist at the University of Pennsylvania.

Golenski says the free market competition that helped rein in medical inflation may be inappropriate for addressing the “bare- bones issues of how much of our national wealth are we willing to allocate for health care versus other needs we have.”

Some experts suggest that government--or some type of independent body outside the health insurance industry--would be a better way to address tough social policy issues raised by the new medical technologies.

A few states already have attempted to tackle these problems. Seeking to reduce its uninsured population, Oregon in the mid-'90s pioneered a controversial program in which medical services for Medicaid recipients are ranked by costs and benefits.


In New York, a state task force of physicians, nurses, lawyers and bioethicists is charged with issuing policy recommendations on a host of medical technology issues. In a recent report on reproductive technologies, the panel recommended that the state should not require insurers to pay for infertility treatments when millions of New Yorkers lacked insurance coverage and had no access to basic health care services.

Although HMOs have generally opposed efforts for stronger government regulation, PacifiCare’s Hoops sees a need for “more coordinated benefit decision making.”

“I think this is where HMOs could give up some local autonomy to a more centralized entity that would provide consistent guidelines,” he said.

Managed care companies contend that an advantage of their system is that health decisions are made on the basis of what’s best for a “population” of patients--not any one individual. Many health policy experts applaud that approach as a more equitable means of allocating finite medical resources and improving the health of the general population.


So how do health plans make decisions on how to allocate their members’ medical dollars? Most plans have committees made up of their own physician administrators, as well as doctors, pharmacists and other health professionals.

PacifiCare has several committees that review such issues as contractual obligations, medical need and cost effectiveness, and pharmaceutical issues.

The committees, usually meeting in private, review scientific literature and other clinical data to decide if a new drug or treatment will be a covered benefit.

One problem with this approach is that it’s not often clear to the plan’s members how or why a decision was reached. HMOs often argue that such information is “competitive” and could be used by rivals. But the lack of openness about the process can be a sore point with the public.


“It’s relatively poorly understood how health plans make their decisions, and part of the problem is they tend to cloak their benefit decision in secrecy,” said Golenski.

In reality, benefit decisions don’t happen in a vacuum in which good medicine and science always win out. Insurers have learned by experience that a decision to not cover a particular treatment--even one they believe is justified from a medical standpoint--can bite them back.

“People say, ‘I’m going to go to the newspaper if you don’t give me gene therapy for my brain cancer,’ ” said Caplan.

Indeed, the strategy of “going to the press” seems to have mushroomed as the media focus on the controversy surrounding managed care.


And sometimes they go to court. A New York man who says his insurer denied coverage for Viagra sued Oxford Health Plans and other unidentified insurers in federal court in Brooklyn seeking to get them to pay for the impotence pill.

PacifiCare’s Hoops acknowledges the problem: “When we have a special interest group that makes its voice heard loud enough, we sometimes relent and give them what they want.”

Doctors are sometimes a special interest, too. Already, local urologists and other specialists who have a financial stake in the matter are pushing Los Angeles County health officials to approve covering use of Viagra by the poor, several doctors said.

Indeed, Caplan says the public pressure to pay for Viagra is intense.


“When the upper and middle class sees a drug that can bring back sexual function, improve the quality of life and restore a central aspect of life, it is laughable to think that the pressure won’t be overwhelming.”