When 41-year-old New Jersey resident Amy Speicher was diagnosed with advanced skin cancer, she feared the disease as well as the hair loss, vomiting and crippling fatigue that usually come with cancer treatment.
None of that came to pass. Speicher sailed through her treatment, balancing parenting and a full-time job. How? Her insurance paid for a groundbreaking immunotherapy, which has far fewer side effects than run-of-the-mill chemo.
Unfortunately, her story is the exception. Throughout the country, insurers increasingly shun the most advanced cures, treatments and tests because they don't want to foot the bill. This short-term focus on profits is callous—and counterproductive. Denying patients the best health care leaves them sicker, ultimately raising insurers' expenses.
In recent years, insurers have replaced fixed co-pays—say, $20 at the pharmacy—with "co-insurance," where patients are asked to pay a percentage of an advanced medicines' total cost. Insurers know many patients can't afford these payments and will ask their doctors for less expensive—and often, less effective—medicines.
Insurers have also embraced "fail first" policies to limit patients' access to cutting-edge treatments. Such policies require patients to use cheaper treatments first. Only if those treatments fail—and patients get sicker—do insurers pony up for cutting-edge drugs.
Increasingly, insurers are also refusing to pay for some treatments unless a doctor first seeks permission before writing a prescription. Most drug regimens should begin immediately, so waiting days or even weeks for an insurer to approve a doctor's prescription simply isn't tenable.
Consider the case of Angela and Nate Turner, both addicted to opioids. Their doctor sought insurer permission to prescribe a treatment that lessens drug cravings. As the insurer delayed, precious time passed. Angela became violently ill from withdrawal after waiting for three days. After waiting five days, Nick succumbed to his urges and used heroin.
Insurers are even reducing coverage of preventive care.
For instance, insurers in New Jersey, Tennessee and North Carolina have stopped covering the only genetic screening test approved by the Food and Drug Administration. Such tests scan for genetic mutations that often lead to hereditary breast or ovarian cancer. The insurers now cover only cheaper, lower-quality genetic tests, none of which have proved to be as accurate.
The less-precise tests could raise a woman's risk of receiving a false positive, a test result that incorrectly concludes she's likely to get cancer and should undergo expensive preventive surgery. Worse, lower-quality tests could also lead to false negatives. Women would incorrectly think they have little risk of cancer and opt out of preventive surgeries that could save their lives.
Subpar insurance harms patients' financial health too. Using a better medicine or genetic test from the start prevents lost productivity and needless hospitalizations. In fact, for every dollar spent on newer advanced medicines, non-drug medical spending drops by more than $7.
Insurers know that better preventive care is ultimately cost-effective. But they hesitate to make large up-front investments in patients' health since people frequently switch insurers. Companies don't want to spend heavily—and jeopardize their sacred quarterly results—to save their rivals money a few years down the road.
But this short-term thinking won't save them in the long run. If the overall pool of insured people becomes sicker, insurers' expenses will increase. Year-to-year fluctuations obscure the fact that insurers are just recruiting each other's sick people.
Under the Affordable Care Act, insurers can't resort to their old practice of flat-out denying people coverage. And their new strategies of restricting access to the best treatments only make people sicker, delaying the inevitable expense of covering their care.
Health care economists tout "precision medicine"—the strategy of giving patients treatments and tests uniquely suited to their health and genetic backgrounds—as a way to ultimately prevent and cure illnesses and curb health care spending. But precision medicine works only if insurers pay for the treatments doctors recommend.
If insurers want to help their customers, and their own bottom lines, they need to think long term and cover treatments that prevent and wipe out diseases.