The obstacle courses that patients and physicians must successfully navigate for physicians’ prescriptions to result in patients’ actually obtaining needed medications are becoming increasingly aggravating and dangerous. While obstacle courses are well established as part of military training for soldiers to prepare for combat and part of pop culture for contestants to compete for prizes on reality television series, the obstacle courses set up by health insurance companies serve no good purpose other than to enrich those very multi-billion dollar companies themselves and increasingly rich and powerful middlemen known as Group Purchasing Organizations (GPOs) on the inpatient side and Pharmaceutical Benefits Managers (PBMs) on the out-patient side. A misguided law with serious unintended consequences (a 1987 Medicare Anti-Kickback Safe Harbor statute that exempts these middlemen from criminal penalties for taking rebates/kickbacks from suppliers that went into effect in 1991 for GPOs) gave rise to an unimaginably corrupt pay-to-play system to let a given medication or medical device gain access to the healthcare marketplace. Translation, a medication is available at a hospital or on an insurance company’s formulary not because it is the best drug chosen by our nation’s expert physicians as having the best results and least side effects for most patients, but because the supplier of that drug has paid the most administrative fees, marketing fees, advances, conversion fees, prebates, rebates, and “sharebacks” to the GPO or PBM to pay-to-play. The drug manufacturer must then raise prices to offset the costs of the “pay-to-play.” Repeal of this flawed law would reduce cost of drugs by 30%, if not 50%, and save Medicare and Medicaid $75 billion annually. We cannot fix the healthcare mess until we shed light on the $200 billion that these middlemen take for themselves and repeal this law of unintended consequences.
The PBM industry is highly concentrated with just three huge companies controlling over 80% of the PBM market and more than 70% of all prescriptions dispensed in the United States. These three, UnitedHealthGroup, CVS Caremark, and Express Scripts reported aggregate net revenue of $303.7 billion in 2016 alone. The Pharmaceutical Benefits Manager for the United Healthcare, United Optum, is the largest. In 2003, PBMs petitioned the HHS OIG to extend the 1987 law covering GPOs, to cover the PBM industry. According to the Bipartisan Policy Center, from 2003 to 2013, Andy Slavitt worked at United Health Group, eventually serving as the Executive Vice President for Optum, United’s PBM middleman, which he grew to a $40 billion health services enterprise. In 2013, President Obama tapped him to repair healthcare.gov, and he then served as Acting Administrator for the Center for Medicare and Medicaid Services (CMS) from 2015-2017, executing many new programs including the significant shift to “pay-for-value” models, MACRA, and the ACA. This illustrates the incestuous nature of the PBM industry’s relationship with the federal government and explains why the middlemen are left alone with their booty as lawmakers, who rely on lobbyists’ money to get themselves reelected, turn a blind eye to anticompetitive, self-dealing business practices such as secret, sole source contracts that manipulate pricing and cause drug shortages. If just 10% of the $200 billion these middlemen bilk from our healthcare dollars through this loophole is spent lobbying, that’s a cool $20 billion they use to influence and buy favor. While politicians get re-elected and middlemen get rich, patients get gouged financially, get sicker, and needlessly die- as reported in the recent case of a young diabetic who died because he could not afford his insulin. The PBMs are to blame for a recent 300% increase in the cost of insulin. The enormous frustration I experience as a physician, is exceeded only by that I experience as a patient.
One month ago, a young physician mom in the last month of her residency was admitted to deliver her first baby boy. Suddenly, she sustained a complete placental abruption requiring emergency C-section and blood transfusion. Thanks to the quick, brilliant actions of the OB/Gyn, general surgeon, anesthesiologist, and labor and delivery team, both mother and baby survived this potentially fatal event. During the baby’s 16 day stay in the Neonatal Intensive Care Unit (NICU) , the astute neonatologist consulted a pediatric cardiologist, who fortunately happened to be one of 150 pediatric electrophysiologists in the country. He clinically diagnosed Congenital Long Q-T syndrome, a diagnosis that can only be confirmed by genetic testing. The hospital and insurance company balked at the physician’s order for genetic testing, which was delayed until sufficient administrative third party hurdles had been jumped. You see, physicians’ orders, including prescriptions for medications and medical devices, are now largely regarded as requests by the all-powerful hospital and insurance industries. The insurance company would not approve anything until the newborn had been entered into their system and informed the parents (who had already notified their employer, through which they got their insurance, of the birth) this could take 5-7 working days or longer. Until then, (even though in reality the baby was living in the NICU surrounded by the best doctors and nurses in Texas), the baby did not exist to the insurer, and they could make no determinations as to whether they would cover anything. The delay in diagnosis could prove fatal for the baby, who is at increased risk for sudden cardiac arrest if treated with inappropriate medications or denied protective drugs and devices. The decision was made to presumptively start the baby on protective medications and send him home with breathing monitors and an AED in case his heart stopped, pending the results of his genetic testing. The insurance company refused to cover the $1400.00 defibrillator, but fortunately, the baby’s mom was able to charge it to her credit card- knowing full well that she most likely would never be reimbursed (in spite of her onerous, monthly premiums, high copays, and huge $8500.00 family deductible.) She had spent a significant portion of medical school, internship, and residency working on prior authorizations and other obstacles to patient care thrown up by insurance companies and their PBMs. The fact that our physicians in training are used as pawns of PBMs, insurance companies and hospitals as glorified billing agents in this deadly game of delay and deny care for profit is pathetic in and of itself.
The mother was blessed that she and her husband could afford the defibrillator, which the insurance company refused to cover, because following hospital discharge, the results of the genetic test confirmed the diagnosis of Long QT Syndrome. Fortunately, the physicians had fought those “insurers,” who claim they must follow “process,” even if flawed. The insurance company’s business “process” includes delay and denial of care and even the ridiculous notion that the baby, who was in the NICU, did not exist for the arbitrary 5-7 day insurance company window needed to enter the baby’s data into their system. Imagine the expense of keeping the baby in the NICU even longer waiting on insurance nonsense. Imagine if a parent could not afford the defibrillator, and the baby was sent home from the NICU only to die, because the parents couldn’t afford what the doctor ordered but the insurer denied. The parents are less likely to be able to afford the $1400.00 defibrillator, because they have already handed over an exorbitant amount of money to the insurance company in the form of exorbitant monthly premiums (in addition to what the employer pays), co-pays, deductibles, and cost-sharing. We have not even factored in lost productivity for the parents and wasted resources of a neonatologist and pediatric cardiac electrophysiologist groveling for authorization for medical devices and genetic testing that determines appropriate diagnosis and treatment of the patient.
Once home the baby thrived but developed a tear duct infection common in infants. This condition responds beautifully to early treatment with antibiotic eye ointment but can require I.V. antibiotics and readmission to the hospital if it progresses. A person with long QT syndrome can be thrown in to sudden cardiac arrest if given improper medications that further prolong the long QT interval. The baby was accordingly prescribed Bacitracin ophthalmic ointment instead of erythromycin ophthalmic ointment, which can prolong the QT causing the heart to speed up and then stop beating. A baby’s skin is very thin and even topical medications can be absorbed into the body.
Bacitracin ophthalmic ointment is a drug that has been around for over 20 years and used to be very inexpensive; however, as a result of the medication middlemen and their secretive business dealings, it is now very expensive. It also did not make the cut to be listed on the United Healthcare formulary. The patient’s neighborhood pharmacy told the baby’s mother would cost $101.00 for a tiny 3.5 gram tube, and United Healthcare refused to cover it. Further insanity ensued. The United Healthcare Representative said the baby’s birthday was wrong- which it wasn’t- and that he had not met his deductible- which after 16 days in the NICU for him and 3 hospital admissions and emergency surgery for his mom, he most certainly had. The representative said he could have the erythromycin only, in spite of the pleas from the baby’s mom, a physician, who informed her the erythromycin could put the baby at risk for sudden death. This all required hours of waiting, recording, script reading, template following, transferring, holding, and discussing on the phone. The physician’s staff was simultaneously spending hours on this, as was the pharmacy. (United Optum teams up with CVS and Walgreens to the detriment of other pharmacies, and that’s another story that warrants discussion too.) So, the baby went without treatment for another 24 hours.
The baby’s mom tried to get access to the United formulary to see what was listed and would be covered at what tier. The representative told the mom the only way was to enter each potential drug into their website to see if it was covered, and said sending a hard copy or online copy of the formulary was not possible. The insurance was purchased through the baby’s parent’s employer who then became involved as well, as access to a formulary was pursued. The parent’s employer referred them to a MyUHC website. Not easily, the physician’s staff was able to access an online United Healthcare formulary that listed gentamicin ophthalmic ointment as tier 1, so this was then called in to the patient’s chosen pharmacy- only to be called back by the pharmacy that said there is a drug shortage and the gentamicin ophthalmic ointment is back ordered for months. Finally, another UnitedOptum formulary was found that said tobramycin drops were covered, so this was then ordered, even though it is a drop with more toxicity to the eye and not as good as an ointment for an infant in this scenario. The mom therefore decided they had worn her down, broken her, and her baby needed the medication the doctor had ordered- she would just have to go ahead and pay the $101.00 to get the best medication for the baby- and she felt blessed to once again be able to charge it on her credit card. She also grievd for all the other mom’s who could not afford to detour around the insurance obstacle course. Ironically, she could buy the Bacitracin ophthalmic ointment cheaper by not going through her insurance and using a Good Rx coupon, but this would once again require calling the physician’s office to call another prescription in to another pharmacy, and time was ticking by and serious manpower had already been squandered on patient, physician, and pharmacy ends. She could have also gotten it for less at CVS or Walgreens who have deals with United Healthcare and their PBM, OptumRx, as well- but again, more calls and delays. Finally, if point of service dispensing was legal in Texas, as it is in 44 other states, she could buy the exact medication the doctor prescribes in the doctor’s office at cost plus a couple dollars as she checks out at the front desk, administer it to the baby immediately, and forgo the run around altogether. But, is this the intent of the insurance obstacle course in the first place? Make things so difficult, that patients just give up and pay for themselves or doctors supply samples.
The United representative informed the baby’s mom, the case is now open, and a team is looking into covering the bacitracin since the erythromycin is contraindicated and the gentamicin is backordered, but that they have 48-72 hours to respond (and of course July 4th is in the window). The mom asked, “Do you not agree that an infection can significantly progress in a baby in 48-72 hour?” (This is a one-month-old baby, mind you.) So, she was placed on hold again, waiting to talk to an “escalation team.” The United representative returned to tell her it will take 5-7 days to get the issue resolved per the “escalation team.” So, the baby’s distraught mother asked “Does a human life matter?” Their solution was for her to pay the $100.00 then submit a claim form to try to get reimbursed retroactively. (LOL-which they will deny-and it is the mom’s responsibility to find the appropriate form and submit it to the appropriate entity.) The exhausted mother, who had just nearly died giving birth to a son she had nearly lost and now was sick in need of meds, inhaled and stated, “ So, you’re asking me to charge $101.00 on my credit card, which is an amount a lot of people can’t afford, because it takes y’all 5-7 days to resolve an issue that we know the solution for.” The representative replied, “Yes,” but you can fill out a medical claim form to try to get reimbursed.” The exasperated mom replied, “I’m a physician, so I know that you’ll deny the claim, because no one will take the time to review our case.” I ask, are you incompetent or immoral, United Healthcare?
I contend, the business model employed by the insurance company, its PBM, and favored pharmacies is perverse and immoral-and intentional. I contend the business model is designed to increase profit by delaying and denying care to patients. Prior authorizations, step edits, quantity limits, tiers, restricted formularies, and so on are all perverse business inventions intended to wear us out, physicians and patients, to the point we won’t finish their obstacle course. This is by design. Think about it, while small town physicians like me, my father before me, and two of my four daughters after me, endured 4 years of college, 4 years of medical school, and 4 or more years of internship and residency, sacrificing much to endure a rite of passage required of us in our pursuit of the ability to care for others as their physicians and surgeons, those in big insurance and big government like Andy Slavitt of United Optum and CMS went to Wharton Business School, got MBAs at Harvard, and worked on Wall Street in their pursuit of making money and amassing power through money. And what better commodity for them than patients’ lives?
Physicians work to serve our patients; insurers work to serve their stockholders. The government takes patients’ money in the form of taxes and transfers it to the insurance companies in the form of subsidies, premium support, managed are contracts, tax benefits and so on and on top of what patients and employers pay to the insurance companies as well. The insurance companies receive hundreds of billions of dollars from patients directly, from their employers, and from the government; they keep the money by delaying and denying our care. They are the de facto rationers. We are their commodity, an annoying but necessary inconvenience. All they need to do is run their numbers just right to make it look like not too many of us are dying too soon or too uncomfortably. And they must keep us quiet. Their definition of success is to best serve their stockholders. This requires least serving their patients. Keeping our money in their bank accounts even a day longer results in hundreds of millions of dollars in profit from interest alone in the long run. Each extra obstacle, each hour we linger on the phone, each day we wait for their “escalation team” to decide our fate… escalates their bottom line and our blood pressure. Think about it, when we buy our own meds, they win. When we can’t afford to buy our meds and go without, they win. When physicians tide patients over with samples and provide pro bono care, insurers win- but so do we, because that is our definition of success, serving our patients. That’s why the buck stops with us, the patients and physicians of America. The enormous frustration I experience as a physician and patient, is exceeded only by that I experience as a mother and grandmother.
I thank God for my amazing physician colleagues who saved the lives of my precious physician daughter and her precious baby boy, my first grandson, and I praise God for my amazing community of faith, replete with the incredible prayer warriors who prayed with us and for us without ceasing as we walked that valley. I thank God, the ultimate healer, that this community includes the most incredible, life loving, patient serving physicians, pastors, and healthcare professionals across the country who are willing to take on this scam.
We must shine the light on these perverse insurance business practices and processes. We must shine the light on the corrupt, racketeering PBMs. As physicians we must not be oppressed and live in fear of being fired as employees or kicked off insurance networks. We must do what’s right in our lives of service to our patients. We must become doctors again. Our patients’ lives depend on us. This will take patients and physicians refusing to run the insurance/PBM obstacle course, exposing the insurance tricks and traps, and demanding our elected representatives close the middlemen loophole that allows PBMs and GPOs to bilk us for over $200 billion per year while we experience inflated drug costs, drug shortages, poor access to drugs, and stifled innovation. While we don’t have $20 billion to lobby on Capitol Hill, we have the vote. This is not a partisan issue. This affects every single American. We must unite on this, America, all of us. Will we unite or will we continue on this never-ending immoral obstacle course- which is it America?