Is 'Cookbook Medicine' Crippling the U.S. Health System?

By Christopher Moraff, AlterNet. Posted February 25, 2008.

By now, the case of Nataline Sarkisyan has garnered so much media attention that there's likely few people who haven't heard the story of the 17 year-old California girl who died five days before Christmas after her insurance company refused to approve her liver transplant.

Sarkisyan, who was diagnosed with Leukemia when she was 14, was undergoing treatment at UCLA Medical Center when Philadelphia-based Cigna HealthCare ruled her much-needed transplant "experimental, investigational and unproven."

Sarkisyan spent three weeks in a vegetative state before Cigna bowed to pressure from the girl's doctors and offered to pay for the transplant itself. But by then it was too late.

Whether a transplant would have ultimately saved Sarkisyan's life we will never know. But that's not really the point. After all somebody has to say no; the problem, says David Senoff -- a Pennsylvania attorney who represents patients who have been denied care by their insurance company -- is that the people saying no are the very same people who profit from the answer.

"Health insurance by definition covers some things, and not other things it's the same as any other policy: there are some things that are in and some things that are out and somebody has to be the one who's outside of coverage; but you don't want those people who decide to be the ones who are in the company making additional money by denying care," Senoff said.

"The last person on earth that should be making a determination [on coverage] is the person that's going to be making money off of the decision," echoes Steffie Woolhandler, an associate professor of medicine at Harvard University. "No one that's involved in that decision should stand to gain or lose based on the decision."

Woolhandler, a vocal proponent of a single-payer, universal health care system, recently co-authored a study on the U.S. health care system for the British Medical Journal that exposed the failings of America's managed care system.

"The U.S. health care system is failing because we have adopted a for-profit, market-driven model," Woolhandler said. "Americans die younger and pay more for their care than people in nations with non-profit national health insurance."

For Senoff, profit motive aside, the very nature of managed care is like putting the "fox in charge of the hen house."

"I'm not a person who's against companies making profits, the problem for me is the management portion of the insurance," he said. "When I was a kid this idea of managed care with the insurance company being the manager was unthinkable."

Judging by industry data, the fox has had a very good run of it. Since the Health Maintenance Organization Act of 1973 created the managed care system, the industry has become a virtual profit machine. According to Fortune magazine, the top-ten managed care companies -- ranked by revenue -- made roughly $12 billion in profits in 2007. The ten highest paid HMO chief executives collectively made nearly $170 million last year.

Meanwhile, the industry spent more than $150 million lobbying the government over the past five years, according to the Center for Responsive Politics, and has managed to secure an entrenched position that makes challenging insurance companies difficult if not impossible.

Senoff attributes this to two primary characteristics: a shift in the way claims are classified and processed, and a decades-old federal law that gives HMOs virtual immunity from liability for negligence.

The Best Evidence?

There are two primary rationales managed care organizations use when refusing to cover a specific treatment: one is to say the treatment is in itself experimental or investigational; the other -- as happened in the Sarkisyan case -- is to say it's experimental or investigational for a particular patient's diagnosis.

This second rationale, which is becoming more common, is reliant on a concept called "evidence-based medicine" (EBM) -- a trend that is finding an eager proponent in managed care companies.

Under EBM, medical treatment decisions are made primarily using guidelines from existing literature rather than a doctor's own expert opinion. Advocates of the practice say such guidelines limit variation in physician practice thereby improving quality of care.

See more stories tagged with: managed care, health care, health, nataline sarkisyan

Christopher Moraff is a writer, journalist and photographer and a frequent contributor to In These Times and The American Prospect Online. He also works as a correspondent for The Philadelphia Tribune and is senior editor of the monthly online political journal Common Sense Magazine. He lives and works in Philadelphia.

Liked this story? Get top stories in your inbox each week from Health and Wellness! Sign up now »