Insurance Companies, Health Care, and You

I recently filled out a “Health Assessment” form for my employer and insurance company.

I was queried not only about my diet, exercise, and existing medical conditions. I was also asked about how happy I was at work, if I approved of my boss’s performance, whether I worried about money, and if I had received any recognition from my community in the past year. The computer — the computer! — wanted to know if I had smiled and laughed the previous day.

This Orwellian scenario is meant to mimic an in-depth relationship between my primary care doctor and me. The insurance company will fine me if I fail to print the 37-page “Well-being Snapshot,” show it to my physician, and have her fill out an additional form attesting to the fact that we discussed the results (and absolutely did not spend our time together rolling our eyes and mocking the form).

Incidentally, I only have 82% well-being. I exercise regularly, take vitamins, and eat unprocessed foods, including at least six produce items a day. I adore my profession. I have strong family and friendship bonds and take my spiritual life quite seriously. But I have been advised to “Step it Up” in several areas, including my “sense of purpose.” Apparently this involves “visualizing your life when you’ve achieved your goals.” “What are you doing? Who are you with?” the laptop screen inquired. Huh. Thanks, but I think I have this one covered, computer logarithm. Or at least permit me to work it out with my family’s minister or a therapist.

As much as this process irritated me, I am not surprised. (Okay, “irritated” is a bit mild. Perhaps I did pound my fist on the desk and say some untoward things to the computer screen. But shhhh! If the insurance company finds out, my well-being score will take a serious hit.)

So how did we get here? I tell the story in my recent book, Ensuring America’s Health: The Public Creation of the Corporate Health Care System. It’s a story about insurance company power and how, among other problems, this corporate dominance has fueled high health care costs. Soaring medical expenditures have persuaded insurance companies and the employers who purchase employee coverage to adopt cost containment practices such as health assessment forms.

The story begins with doctors. During the 1930s, the American Medical Association (AMA) pushed aside numerous existing health care financing arrangements to endorse the “insurance company model.” Alternative models included medical insurance managed by labor unions, consumer cooperatives, ethnic and African American mutual aid associations, businesses, and physician groups. However, in order to maintain their authority over medicine, AMA leaders decided that only insurance companies — which were usually located far away from physicians — could fund what was often referred to as “prepaid” health care. To comply with AMA regulations, insurance companies were prohibited from supervising physician work and had to reimburse doctors, not on a per-patient or salary basis, but for every single service and procedure they provided to policyholders (fee-for-service payment).

Commercial insurers feared the obvious financial risks of these stipulations. Nevertheless, insurers decided to join AMA leaders to establish the insurance company model as the primary way of organizing health care. Supplying health insurance for employee groups helped their business clients take advantage of tax breaks and challenge union influence. And, most critically, by rapidly expanding and liberalizing coverage, insurance companies could help defeat perennial attempts to reform health care – the likes of which occurred under Presidents Roosevelt, Truman, Eisenhower, Kennedy, and Johnson. Organized insurers and doctors assiduously claimed that the growth of health insurance obviated the need for government involvement.

As the insurance company model spread, health care costs surged. Doctors and hospitals had little incentive to use resources efficiently. Physicians could run up the medical bill unnecessarily, rationalize that such practices constituted excellent care, and then pass the costs off to insurance companies.

So, starting in the 1950s, insurance companies began incrementally building their supervisory power over health care providers. First, they developed in-house medical expertise by creating morbidity charts that documented thousands of diseases and illnesses, associated symptoms, and recommended care protocols. Then they oversaw the creation of review committees to evaluate physician care and determine where it may have strayed from standard practices. By the 1960s, physicians were obtaining insurance company permission to admit patients to the hospital.

Soon, every service a physician delivered was up for scrutiny. Doctors shouldered heavier paperwork loads to account for each test and procedure they provided, review committees monitored their work, and insurance company representatives began visiting them to evaluate medical files and ask follow-up questions. Increasingly, physician reimbursements were tied to insurer-created treatment blueprints.

Meanwhile, in 1965, policymakers obtained their first major reform breakthrough with Medicare, a federal program which supplied elderly health insurance. This program was built on the insurance company model. Progressive reformers had spent decades attempting to replace the insurance company model with universal, government-financed coverage and more cost-efficient arrangements. But by the mid-1960s, reformers recognized that the insurance company model had become entrenched. Consequently, Medicare employed the same operational and cost containment processes as the insurance company model. And insurance companies obtained lucrative contracts to administer Medicare and act as intermediaries between the government and service providers (doctors and hospitals).

During debates over the Affordable Care Act (ACA), progressives once again attempted to scuttle the insurance company model by proposing the “public option.” Progressive policymakers hoped to price the public option, a government-run health care plan, low enough to undermine and shrink gradually the existing insurance company arrangements.

Instead, the ACA clung to the insurance company model. Statewide insurance exchanges offer more heavily regulated insurance products and some citizens have access to subsidies to purchase those policies. But because the ACA adopted the same institutional framework as the “private” sector, insurance companies continue to occupy the central place in health care in the United States.

This is problematic for patients because insurers have always struggled to control health care costs. True, the ACA puts pressure on insurance companies to rein in costs, including administrative expenditures. But history demonstrates that insurance companies will simply pass this squeeze on to physicians and patients via lower service provider compensation and ever more elaborate rules, regulations, and containment practices.

That’s why the insurance company is asking me so many questions about my personal life: almost any activity or facet of existence can be related to one’s health. And that’s why my physician has to treat any health condition I might have according to preset insurance company guidelines or risk losing her reimbursement.

Like it or not, we are destined for more health care debates and reforms. No matter who wins the Presidential election in 2016, both parties will continue tinkering with the ACA in a vain effort to control rising health insurance costs. The real question is whether we will continue bandaging up the beleaguered insurance company model or undertake structural reforms that tie service providers to the system’s bottom line and put health care decisions back in the hands of physicians and patients.