Better vs. More = External Appeals

Budget Chief Peter Orszag says we need better health care, not more health care. As a concept, that sounds reasonable. However, I'm sitting here with a full docket of health insurance appeals and I'm trying to square Mr. Orszag's statement with the fact that there are treatments that doctors say are better for their patients than the alternatives, and it's a nameless, faceless insurance executive making the ultimate decision.

Examples. There's a relatively new drug called Avastin. It's used to treat certain kinds of cancer, but it's not chemotherapy, so it doesn't have all the awful side-effects. It's FDA approved for colon cancer, non-small cell lung cancer, glioblastoma, breast cancer, and kidney cancer. I have one case involving non-small cell lung cancer in which the insurer won't pay for the Avastin because it wasn't given in conjunction with one of the more powerful, destructive chemotherapy drugs, as the FDA labeling suggests. I have several other cases involving other kinds of cancer -- prostate cancer, for example.

The whole issue of how FDA labeling should be treated by payers and doctors is actually pretty clear if you listen to the FDA. In 1982, the FDA issued a policy guidance that said that doctors should not feel restricted by FDA labeling, that sometimes a drug's manufacturer won't want to spend the money to do the massively expensive studies to expand a drug's labeled uses, but that doctors will find the drug to be incredibly useful for those labeled uses. The FDA's policy guidance encouraged this sort of responsible, conservative experience-based use of drugs.

However, most of the time, when an insurance company denies coverage of a drug or device because it is "experimental or investigational," it's also really expensive, like Avastin. I've had doctors at insurance companies tell me that they feel a responsibility to make sure patients aren't treated irresponsibly by their doctors. Bullsh*t. I don't buy for one second that the reason an insurance company denies coverage of a cancer drug that's being given to someone whose doctor has already tried everything else, and who says they will die without this treatment, is because they care about the patient. It has to be about money.

But what would Peter Orszag do? Not more care; just better care. So if Avastin is better but more expensive, we should cover it? Who gets to decide what's better? Because as long as it's not the treating physician, it's someone with a financial incentive, and that will lead to decisions that are motivated by the wrong thing. After all, we're not going to have so-called "death panels" who decide who gets treated and who doesn't, right?

Peter Orszag, however, says it can't just be the treating physician because that doctor has a financial incentive too: The more he treats, the more he get paid, right? So who, other than the patient, doesn't have a financial incentive, but has enough expertise to make an informed, fair decision?

The answer already exists in 45 states (except MS, ND, SD, ID, WY) for fully-funded plans (i.e., not for self-funded plans, in which large employers pay an insurance company to administer the plan, but the employer actually pays for the health care itself): External appeals. There are independent review organizations staffed by doctors paid (usually) by the state out of a fund that's made up of a fee collected from insurance companies who do thorough reviews of medical records and the medical literature and make a decision. They owe no loyalty to anybody; their decisions are truly independent. And their decisions are binding on the insurer (except in Florida, where the insurer can take the matter to court to try to get them over-turned -- bad idea, giving a judge with no medical knowledge the final say). In my experience, they do a great job. I win the cases I should win, and every once in awhile, I also lose a case that I knew from the start was a stretch. The system works.

One of the less talked about pieces of health reform is the expansion of external appeals. Beginning in September 2010 (to be phased in), every insured will have the right to pursue an external appeal, including those in self-funded plans.

If we really want better care vs. more care, and we all agree that the best way to accomplish that is to have experts making critical treatment decisions who do not have any financial stake in the outcome of a dispute, we should be focusing on making sure that these external appeal processes remain as robust and independent as they are today. I've been working in health insurance for about 15 years, and external appeals are the best thing that has happened to consumers in that time. I think they may well be one of the best pieces of health reform, as well. Jennifer