Not My Health Care

JURY TO HILLARY: THE VERDICT IS in. Cutting the cost of health care sounds great. But when it comes to curbing benefits, watch out. Last week a California court awarded a whopping $89 million in damages to the family of a woman who died after her health-maintenance organization refused to pay for a controversial bone-marrow transplant that doctors hoped would cure her breast cancer. The HMO, Health Net, one of the nation's largest, argued that the treatment was "experimental" and not covered by its policy. Angry jurors disagreed. They concluded that the company had denied the care solely to save money--and sent a signal that was loud and clear. Said one: insurers "around the country have to know that juries will not tolerate this kind of travesty."

If ever the health-care industry and Washington policy-makers got a wake-up call, this is it. As the nation grapples with the most difficult of medical choices--how to balance demands for high-tech medicine against rising costs--people are psychologically digging in their heels. If the California court case shows anything, it's that Americans aren't going to give up cherished benefits without a fight. Increasingly, they are going to court to protect what they already have or think they ought to have. Suing your insurer could become a trend of the '90s, says Richard Carter, an attorney in Alexandria, Va. He should know; he has filed 250 such suits on behalf of medically desperate clients in the past few years alone. All this is troubling for insurers and lawmakers as they try to cut costs and revamp our national health care.

Nothing illustrates the difficulties more poignantly than the case of Nelene Fox. As a 38-year-old mother of three from Temecula, Calif, she was diagnosed with advanced cancer in mid-1991. She underwent two mastectomies and chemotherapy. Her insurer, Health Net, paid the bills. But by then her cancer had metastasized to the rest of her body. Her only chance for life, the HMO's doctors told her, was a radical operation involving high-dose chemotherapy, coupled with a harrowing bone-marrow transplant that generally offers no more than a one-in-four chance of survival.

She was willing, but Health Net was not. Calling the procedure "experimental," as yet unproven to be either effective or safe, it refused to cover the $140,000 surgery. What followed was a remarkable tale of self-reliance. Nelene's husband, Jim, a schoolteacher, didn't have the money to "go outside the plan." So their hometown took up her cause. Family members refinanced their homes. Church groups held bingo nights and bake sales. Teenagers sponsored car washes where townspeople sometimes paid with checks for $100 or $1,000. By August 1992, the Foxes had gathered enough money for the treatment. But eight months had passed since her doctor had first recommended the procedure. Nelene's therapy didn't take, possibly because it was begun so late. Last April she died.

Nelene Fox's death would have gone largely unnoticed, just one more bit of data in the archive of cancer victims, but for her brother, lawyer Mark Hiepler. He sued. The case was a classic tear-jerker: a struggling family, a devoted young wife and mother battling greedy Big Business Medicine. Yet evidence presented in court convinced jurors that this all-too-easy image was true. Health Net's denial of the Foxes' claim appeared arbitrary: just months before turning down Fox, it approved identical treatments for two other women, both of whom testified at the trial as living proof that the therapy withheld from Nelene Fox might have worked. Hiepler raised unsavory questions of money and motive. Health Net's compensation plan, like many HMOs, offered year-end bonuses to executives who "saved" on big outpayments. Most damning, perhaps, jurors concluded that Health Net's refusal to pay was less a reasoned medical decision than a deliberate tactical delay. The longer the HMO withheld payment, jurors suspected the insurer had reasoned, the sicker Fox would get--making it less likely her doctors would recommend the radical and expensive "cure."

Health Net labels the accusations "preposterous" and will seek a retrial. Special circumstances persuaded them to pay for the other two transplants, the company says, adding that "emotional aspects" of the Fox case led to an "unwarranted award." Yet as the jury delivered last week's verdict and found Health Net guilty of bad faith, breach of contract and intentional infliction of pain, it tapped into an emergent American nightmare. More and more, people fear that they, too, could become victims of "rationing," the withholding of expensive medicine in the name of economy.

The Nelene Fox case could encourage more suits. The radical treatment she was initially denied has become common at high-profile clinics, insurers' disclaimers notwithstanding.

Breast-cancer rates are rising. Last year 180,000 women were diagnosed with the disease; 46,000 died. Some doctors estimate that as many as a third of those who are diagnosed might be candidates for bone-marrow transplants, at costs running into the billions. The magnitude of those potential outlays understandably alarms insurers. Some cover the treatment. But many do not, and their number may grow.

As a result, more women are going to court seeking emergency judicial intervention. Susan Slavin, a lawyer in Hempstead, N.Y., has litigated a dozen such cases in the last year or so--and won every time. When threatened with a lawsuit, she says, insurers quietly retreat. Richard Carter, the Virginia attorney, has won all of his 250 cases, only eight of which ever went to trial. Noting that one of every nine women gets breast cancer, he predicts a surge in litigation. "If you sue, you get covered," he says. Some hospitals are taking on their patients' troubles. Memorial Sloan-Kettering, a leading cancer clinic in New York, recently sued Empire Blue Cross and Blue Shield for more than $2 million, covering 21 patients receiving bone-marrow transplants.

Insurers think they are being targeted unfairly. "People say we don't want to pay because it's expensive. That's so wrong," says Susan Gleeson, an executive director of the Blue Cross and Blue Shield Association. Insurance companies routinely pay for equally expensive treatments, such as bone-marrow transplants for leukemia and lymphoma. The difference with breast cancer, Gleeson contends, is there's no conclusive data showing that patients receiving the treatment actually live longer. She hopes that clinical trials underway at the National Cancer Institute, sponsored by insurers, will help point the way.

Certainly state-of-the-art medicine offers few guarantees. But many doctors disagree that such procedures are by definition "experimental." Sloan-Kettering, for instance, finds that one of every two advanced breast-cancer patients who undergo transplants remains free of disease. "It's absurd to refuse to pay on grounds that these procedures are 'experimental'," says spokesman Roger Parker. "Extensive research shows this to be the best therapy for women with an otherwise hopeless condition." Sloan-Kettering's doctors, among others, also worry that cost-conscious insurers will begin applying the "experimental" exclusion to other promising but expensive therapies, from pancreatic transplants to innovative treatments for cataracts.

That's why last week's verdict in California was so far-reaching. Clinton health reformers, as well as insurers, are going to have to deal with the likes of Nelene Fox--or Doris Dunkleberger, 50, a kindergarten teacher in upstate New York. Diagnosed with metastatic breast cancer a year ago, she reconciled herself to dying when her insurer balked at paying. She won by suing and just celebrated a "joyous" Christmas, Her cancer is in remission. "I can understand both sides," she says of the debate. "Treatment like mine is expensive." Here she pauses. "But you know, this is my life. Now I have it back."