The problem is that what is profitable is marking the case as reviewed. What is needed is skin in the game. Misdiagnosis should have financial penalties like speeding tickets otherwise the optimal most capital-effective solution is a rubber stamp.
I think you're on the right track but not quite there.
The incentivized behavior for insurance companiese right now isn't fast review, it's fast denial (which saves money on both review time and insurance payout). We need to make a coverage denial take an order of magnitude more time and effort than an approval, so insurance companies are forced to think real hard about denying access to care, and are incentivized to only deny care in relatively extreme cases.
Raise the bar for denial reasons, and forbid generic denial templates.
> need to make a coverage denial take an order of magnitude more time and effort than an approval
More difficult or more expensive. A random sample of denials being sent to a public board might do the trick, with a mandatory per-review fee charged to the insurer, and the sample size increasing as a function of reversed denials.
CMS does do random inspections, but they are far too infrequent (on the order of years between inspections) and the penalties far too low to correctly align incentives.
It should be a continuous stream of cases being randomly selected and reviewed.
That doesn't make sense to me. Why wouldn't maximizing denials always be the priority for an insurance company? If you make denials slower, it will just slow down all cases.
Insurance is fundamentally incentivized to scam its own customers. We need to add more regulation/oversight to reduce situations where management can play tricks to tip the balance in their favor. It's an arms race.
The article was mostly about optimizing medical director "productivity levels", but it also mentioned that they outsourced to nurses in the Philippines who were doing a really bad job. Is there any oversight there? Are the nurses being incentivized to maximize denials? It'd be interesting to see how their productivity measurements are calculated too.
Of course nothing is going to change (because of something to do with "socialism" I bet), but at least now I know to avoid Cigna.
> Is there any oversight there? Are the nurses being incentivized to maximize denials? It'd be interesting to see how their productivity measurements are calculated too.
I'm sure there's a degree of thinly-veiled abstraction there. "Oh, we never specified such incentives for the outsourced nurses" ("... and while we did specify those incentives for their contract agency, we had NO idea that they'd put such incentives on their employees, none at all!")
> Why wouldn't maximizing denials always be the priority for an insurance company?
I mean it shouldn't be.
Imagine this; you have the choice between 2 insurance companies. One has a reputation of denying all claims and the other doesn't. Which do you pick for your insurance?
> Imagine this; you have the choice between 2 insurance companies. One has a reputation of denying all claims and the other doesn't. Which do you pick for your insurance?
And as some of the pre-ACA "catastrophic" plans often showed, those who do often go with "whichever is cheaper", and only find out when they get sick how dismal they are.
You are hinting at the edges of the issue: mis-aligned incentives. A big problem is that your health care is tied to your employer for most people (WW2 is over, we need to stop this practice). It makes sense for an insurer to deny everything because it is low chance that the repercussions will come back to their bottom line, some other company or Medicare will get the bill. If once signed up, your healthcare came from one company forever, the math would change. We could finally move to value based healthcare where is makes more money to prevent health problems in the first place.
It would also enable unhappy customers to move to a different insurance. I'm currently taking a prolonged time off and there was so much more flexibility on the market than what I've ever gotten from an employer.
I mean, I think that is the problem with "insurance" vs "coverage". "Insurance" is about pooling unlikely but costly risk, like getting hit by a meteorite. Unlikely, it happens, but there will be head trauma, CAT scans, x-rays, and hospital stays. That is what insurance is perfectly aimed at.
People with known medical issues aren't really looking for insurance, they aren't pooling risk, they are sick. They need coverage. Businesses can easily handle insurance, but coverage is another matter. You are talking about people you know will cost more than they payout. That's charity, and better left to the state than the private sector.
Medicare only comes in if the recipient is over 65 (or some edge cases of disability).
Paying for health insurance premiums with pre tax dollars is tied to employers, or you can do it if you are self employed.
By and large, you can purchase the same health insurance that an employer offers on healthcare.gov, that meets the minimum ACA coverage standards.
However, there is no reason for employers to be able to compensate employees with pre tax dollars via subsidizing health insurance, but an individual cannot buy health insurance with pre tax dollars. That is just a handout to big businesses to give them an advantage over smaller businesses.
Also, employers compensating employees only in straight pay only also makes it easier for employees to compare compensation offers.
>Misdiagnosis should have financial penalties like speeding tickets
Bad analogy. Speeding tickets carry no penalties to those who issue them wrongly. You can sue and if you win the local government will eventually pay for the damages, meaning the taxpayers, meaning also you. They have no skin in the game.
Speeding tickets aren't the worst because they are in principle disputable, but they are present and real. SEC fines are so rare and late they aren't a real deterrent. Speeding tickets are regular and actually paid and a deterrent. Some systems are better than other (photo radar), but these are quibbles.
The point is that these companies should get hit several times a month with a bill till middle management sees it is a cost center and actually worries about "how do we bring down this number?" and it becomes a bigger problem than "how do we reduce our coffee budget?".
They mean the financial penalties should be like the financial penalties of getting a speeding ticket, not that they should have financial penalties for misdiagnosis "like governments have for misissuing speeding tickets".
I have never heard anyone getting paid damages for a traffic ticket. The biggest you can hope for is a case dismissed which still requires direct and indirect costs.
> What is needed is skin in the game. Misdiagnosis should have financial penalties like speeding tickets
By this logic, would you say that software engineers should be financially liable for any bugs they cause along with people who misdiagnose those bugs in the process of root cause?
> By this logic, would you say that software engineers should be financially liable for any bugs they cause
Yes. Professional engineers are held ethically, professionally, and in some cases financially responsible for the work they sign off on. Personally, I agree with Dijkstra who pointed out in a speech in 1993 that the term "software engineer" is a hollow sham:
> And also the programming manager has found the euphemism with which to lend an air of respectability to what he does: “software engineering”...
> In the mean time, software engineering has become an almost empty term, as was nicely demonstrated by Data General who overnight promoted all its programmers to the exalted rank of “software engineer”! But for the managing community it was a godsend which now covers a brew of management, budgeting, sales, advertising and other forms of applied psychology.
> Ours is the task to remember (and to remind) that, in what is now called “software engineering”, not a single sound engineering principle is involved. (On the contrary: its spokesmen take the trouble of arguing the irrelevance of the engineering principles known.) Software Engineering as it is today is just humbug; from an academic —i.e. scientific and educational— point of view it is a sham, a fraud.
I don't think we have a market failure around that. If I introduce bugs that matter the company loses money. If that happens the company will penalize me by not getting promoted or a raise our even getting fired. Both the company and the individual are already held accountable.
In contrast, how do I even know my medical diagnosis was wrong? How do I know it could have been better given the facts at hand at the time? There also seems to be no market function at all that gives market feedback to the medical institution
Edit: procedures going wrong is of course already highly penalized and insurance for this is a significant cost of our health care.
I don't know how US works, but anywhere in Europe doctors making any sort of mistake can and are sued to hell, my wife is one of them (luckily only once and error was done by her senior doctor not herself).
Now depends what happened, how much you sue for, but losing license and ending in jail are not impossible results. Its up to judge to decide. If that's not skin in the game then I don't know what is. Compared to 99.9% of IT folks who at worst can lose their jobs and move on (not ideal situation of course, but incomparable pressure for relatively similar compensation).
This definitely is the case for medical procedures and surgeonts carry high insurance for this. Not sure how this would work for diagnosis though. It's harder to know you were misdiagnosed and even harder to proof they could have done better with the information available at the time.
I'd be happy to subscribe to a $10 a month service that acts on my behalf for any denied insurance claims. Their job would be to become the "squeaky wheel".
The insurance companies are banking on most people not having the time, energy, or knowledge on how to push back on them. Having a service provider that can do this will cause those insurance companies untold amount of pain.
This is a great idea. Having been on the "automatic denial" side of the fence one too many times, I'd subscribe. But I'd want the service to act as an ombudsman for all insurance -- auto, home, health, etc.
I suspect the real trick would be to keep insurance company lobbyists from finding a way to shut that down.
I was thinking the same. Insurance companies should get punished if the ratio of denied claims vs accepted claims after appeal. If that ration is high, it’s pretty much clear that insurance denies claims by default although they know the claim is valid.
I agree, but this will be a horrific example of Goodhart’s law unless the appeals are third-party and there’s a SEC whistleblower-level retribution against anyone who tries to bribe or intimidate anyone involved. You need every executive knowing that the penalties will be denominated in percentage points of their annual revenue.
