CIGNA Healthcare Killed Nataline Sarkisyan

Why are health care providers (i.e. a doctor, hospital, nurse, or what have you) lumped in with medical research?

Why is it impossible to have not-for-profit health care providers, while the pharmaceutical industry stays for-profit? How much of the money that a health care provider makes is funneled back into research?

Why is it impossible to have not-for-profit health care providers, while the pharmaceutical industry stays for-profit?

I'm not even sure I like the idea of pharma as for profit. I worked in pharma for quite awhile. Do you have any idea how many drugs never make it to market because the bean counters don't anticipate a sufficiently robust revenue stream? It's disgusting. Do you have any idea how much of the money they do spend goes to marketing as opposed to R&D -- it's even more disgusting.

Regarding basic biomedical research -- most of it isn't pharmaceutical in nature and ultimately, most of the money comes from 2 major sources: tax dollars (NIH and NSF) and foundations (charitable organization in the not-for-profit sector). Why should big pharma profit from that?

I apologize for the confusion. I was thinking "healthcare" more in the sense of suppliers of technology and products, rather than service providers. I would love to see not-for-profit providers, and think it should be pursued.

Why is it impossible to have not-for-profit health care providers, while the pharmaceutical industry stays for-profit? How much of the money that a health care provider makes is funneled back into research?

Very good questions. I would think a not-for-profit requiring the constant services of a for-profit would be difficult to maintain, unless a) the providers had high charges for the services they perform or b) insurance subsidized said services.

So it seems to me a tricky choice:

The current system often forces a decision: high quality, low cost or freedom of choice; choose two.

What I'm trying to get at here is that I see a conflict when the decision as to what kind of care a person gets is determined by a company whose major concern is a good investor rate of return.

I agree that this is certainly a problem. I'm no economist, but I would think that since insurance companies have a good amount of freedom to choose what their covered can and cannot choose, they can directly affect their losses. Since people pay for insurance whether they are currently using it or not, they already have a continual influx of funds.

This is what seems problematic to me. If they have a safe income and can choose how much of it goes out, why do they need to publicly trade and add in a requirement to increase profits for shareholders? It seems to me if they want to publicly trade, then consumers of the insurance should either receive more healthcare choice, or lower premiums.

@smallfork:

Regarding basic biomedical research -- most of it isn't pharmaceutical in nature and ultimately, most of the money comes from 2 major sources: tax dollars (NIH and NSF) and foundations (charitable organization in the not-for-profit sector). Why should big pharma profit from that?

I'm willing to let pharmaceuticals profit off of the payments because they actually did the work to come up with the drugs (i.e. the heavy lifting). Now, I think I would put some riders in the tax dollar parts that say that the vast majority must be used for research (I'm willing to allow a slightly liberal definition and include payment of researcher's salaries here) and none of it can be used for marketing. I don't know if that is already there or not; perhaps you could enlighten us?

@Whyren:

The current system often forces a decision: high quality, low cost or freedom of choice; choose two.

If I have to make such a choice, it is easy: High quality & low cost.

However, I want to know: why is it only in the United States that we have to make such a choice? Why must an insurance company dictate what I can and cannot do, medically speaking?

e_nygma:

I was talking about basic biomedical research dollars. Pharma spends money developing and marketing products. Most of the very basic biology gets worked out in academic labs (not all -- pharma does some basic research and they do sponsor and pay for some academic research). But this basic biomedical work is fundamental to the product development work. In essence, the government and non-profit sectors sponsor basic research, pharmaceutical company's add value to that by performing drug discovery work and regulatory work, and then they profit from it by selling it to sick people.

For the past 20 years (since we changed the laws in the US to permit marketing pharmaceuticals to the general public), exorbitant amounts of money get spent on marketing (those stupid television commercials to try to get you to suggest a drug to your doctor, direct to consumer marketing, direct to physician marketing, etc.). Now drugs become like Nikes. They are a consumer commodity. If we can drive the market with advertising dollars, we can drive the margins and the Wall Street numbers... yadda yadda yadda.

I think this is getting off topic though (and we are certainly off Killfile's topic) -- the point I was making is that a lot of drugs never make it out of the lab because they can't make a profit. We know how to do some things that we just won't develop because of the economics. It's all about profit and not about service.

You could make an argument that pharmaceutical company's ought to provide public service in the same way we used to force broadcasting media company's to provide public service and education as a condition of getting a license to use public airwaves. These company's profit off of a lot of tax payer dollars in basic research. IMO they ought to be forced to take drugs to market that don't meet the business specs in exchange for the free ride they get in basic research.

I don't see what's so bad about those kinds of responses. The claim that many people are making is that CIGNA is culpable for this girls death simply because they didn't pay for the transplant when they could have. Well then, the doctors could have probably paid for it as well, but chose not too. Yet that would be silly to say that the doctors killed the girl. Really, the question of culpability is a question of whether or not CIGNA was actually obligated to pay for the transplant. I don't see how anyone can possibly know for certain the answer to that question without being a medical expert and having all the facts.

I'll also point out that despite pulling in ~$16 billion in revenue, CIGNA actually had negeative cash flow in 2006 (and every year back to 2002).

The people that marched in protest had the numbers and money also to save her but not saving her and protesting was a better political statement instead. That too is sad, why didn't they donate then march? At the end of the day you can't avoid the fact CIGNA doesn't perform liver transplants, thus they couldn't have saved or killed her either way. The rest of the rhetoric are people sickly using this girl's situation and death to advance their politics.

This situation has nothing to do with the payer system and anybody who thinks a government bureaucrat wouldn't deny when the book formula didn't apply is being either naive or intentionally deceptive. The outcome would have been the same under either system, only this way we know about the other it would have already been washed away.

It's funny in a sad sort of way how people will defend an accountant making a medical decision.
"Oh, it probably would have been a waste of money anyway and then you'd just complain the the fees are too high." and "They're just using this as politics"

One question though....
What if it was YOUR daughter?
Would her life be so cheap then?

Either way, CIGNA killed her. They denied her care that they later admitted was appropriate and she died as a result.

They only admitted that they could make a "rare and unusual" exception (assumably due to political pressure), not that they were wrong initially. They may have been, but I don't see how you can be so sure.

What if it was YOUR daughter?

Clearly, ideally we'd all want everyone to get the most possible treatment every time. But there's only so many resources out there for medical care, so in the end there will always be limits to get those resources in the best (most effective) places possible.

What they did is latch on to an escape hatch and bail on her. She has an infection -- oops -- she's disqualified. It doesn't matter what the doctors say -- read the policy.

I don't know what went on in the offices at Cigna or what flew back and forth in the emails -- but it is not hard to imagine someone looking for a reason to not approve or find a reason to disqualify something like this. From the balance sheet point of view, it's not just a 6 figure procedure, it's a life long liability.

This tragedy aside, we should be less angry at a business for behaving in an appropriate business manner than we should be at ourselves and our leaders for placing healthcare in a business setting.

I don't understand why it's so compelling that her doctors wanted to do the transplant. If I were a doctor, I can imagine wanting to go through with expensive procedures even if there was just a slim chance to save my patient. That's human nature. Also, CIGNA still maitains that the transplant wasn't covered in the insurance plan, even after they changed their mind.

Forget about organ scarcity for a moment. There are two things needed to be considered when deciding whether or not to go through with any procedure:

1. What are the medical risks involved and what are the chances it will produce some meaningful benifit? For that, doctors and medical experts have a lot to say.
2. Is that benifit worth the price that you're paying for it (in dollar terms)? That's something doctors don't spend a lot of time thinking about, wheras actuaries and accountants do.

#1 is practically meaningless without #2. And I don't think it's a stretch to say doctors would be naturally biased by human nature to minimize #2.

Evidently Cigna changed their mind at the last minute in response to a massive protest in front of their offices...but they were too late.
"The company recently posted figures for its third-quarter performance this year, which showed profits up 22%. Next year it expects to earn an income of up to $1.2bn". Their obvious loyalty is to the stockholders.

You cannot complain about the steep rise in health care costs on one hand and insist on everything possible that can be done actually be done in every case.

It's a tough call to make.

You could have an adult with a genetic deformity that is causing heart failure at 40 and another who is having the same issue because (s)he ate lots of fatty foods when (s)he was younger.

But who should decide when everything possible should be done? The patient, family, doctor, employer, insurance company, hospital? Moreover, who has the right to make such a choice?

I have known young people who have gotten a transplant, developed cancer, and other infections and come through it. Transplants are difficult and require a lot of juggling of care for a year or more because of the drugs needed to prevent rejection that can cause complications. A compromised system doesn't mean you are at a dead end.

There is no guarantee that this girl would have lived with the liver transplant.

But there was a guarantee that she would die if she didn't get it.

The likelihood that she would recover from the leukemia was not good.

What? The original article said the cancer was all but beaten. The only thing she needed was the liver transplant and she could have made a full recovery. What you say does not match what Killfile said in the article. Somebody needs to clear some stuff up...

Otherwise, good article as usual, Killfile.

I wonder how those big self-funded companies do it, like Microsoft, Amazon and state employees, for example.

Adam, how would a not-for-profit health insurance company be screwed?

I wonder how those big self-funded companies do it

Do what?

Adam, how would a not-for-profit health insurance company be screwed?

I can't explain it any better than Entelechy just said right above my comment:

So, how then to pay for health care? It turns out that the main reason that you can't find non-profit means to pay for health care expenses is because the tax code essentially makes any such organization illegal. To be a non-profit, your benefits cannot be distributed solely to members of the organization (except maybe if you're a religious organization), which means medical expense charities are OK, but mutual aid societies will be taxed like corporations. And since contributions to a mutual aid society are not tax deductible, but insurance premiums are -- it's silly to set up anything other than insurance company.

Some big companies, such as Microsoft, fund their own employee insurance. They hire an company to administer the plan but it is self funded. I'll have to look into it more but I wonder how it manages in the face of what Entelechy says about not-for-profits being screwed.

I'll have to look into it more but I wonder how it manages in the face of what Entelechy says about not-for-profits being screwed.

Microsoft isn't exactly a not-for-profit company.

Some big companies, such as Microsoft, fund their own employee insurance.

What about people who don't work for giant corporations? Consider, for example, most poor people in America. They are likely to be either unemployed, employed by a small business or part of the underground economy. There is no way to generate the pool of resources necessary to protect against large medical expenses without creating an entity that can be taxed as a corporation.

Add in all of the self-employed, like me, who have a pool of one, and you'll see why I was uncovered for three years (until earlier this year) as the cost rose to over $550 a month.

Why can't there at least be a pool of self-employed throughout the country to keep the cost down? Small business is credited with creating jobs, but see how the self-employed are repaid: high health insurance costs, no unemployment benefits, double social security payments (the employer and employee side).

What I envision is something sort of like a healthcare trust. It would be a non-profit organization with the primary task of providing for the healthcare of the trustees, aka those who pay in. If it makes more money than needed, it refunds it all back. It's sole purpose is to provide the best healthcare possible. If it doesn't provide good healthcare, then people are likely to leave a choose a different healthcare trust that does a better job.

This would keep the payment part of healthcare on the non-profit side, but leave people with freedom of choice, unlike a government program.

Why can't there at least be a pool of self-employed throughout the country to keep the cost down?

Marilyn and Adam,

I think these are great suggestions, and sorely needed. My husband is self-employed and went for years with no coverage. We were finally doing well enough to afford private coverage two years ago. Now we pay $575 a month. Since we still have uncovered costs that come close to an additional $1,000 a month at times, it's breaking us since our business went into a downturn.

That's why we need a not-for-profit universal plan for everyone. Insurance premiums are outrageous. I had to cut my private practice and take a pt time job at the hospital to get health care and benefits, otherwise I would not be insured.

sorry for confusion above. I thought Hobson was saying not-for-profit wouldn't work and that didn't make sense to me so I put in the examples of self funded insurance plan...technically not-for-profit and wondered how they could do it.

That decision should be at the sole discretion of the doctor on the ground treating them.

That's unrealistic. Even government run health care has limits to what care you get (some of the programs actually have quite a lot of limits). The only way to make it so that you can get any care no matter what would be if your premiums were tens of thousands of dollars a year.

I'm not suggesting that its a free for all, there would still be a system of checks in place, but it would be at the medical level in the hands of the doctors treating the actual patient at hand vs some suit a thousand miles away looking at a patient as a series of $$$.

Canada suffers from a critically low rate of organ donation which limits availability.

There is always the free market approach ;-)

But anyway, the Freakanomics blog actually does a lot on organ donation and how to increase it. One of the best methods is to use opt-out organ donation rather than opt-in. Basically, when you got to get your driver's license or other identification, instead of assuming that you don't want to be an organ donor and having to check a box to say that you do want to donate your organs, the opt-out method assumes that you do want to be an organ donor and you have to check a box to say no.

This helps because too many people don't even think to check that box, even if they really do want to be an organ donor. Thus with the opt-out method, everyone is an organ donor until you say otherwise, rather than the other way around.

Any reason we're not doing that?

I'm really not sure. I believe in Spain and Austria they use the opt-out system and have far less waiting lists or shortages for organ transplants. In Spain they make it easier to opt-out, even family can opt-out for you if you didn't leave any legal documentation regarding the decision. In Austria you can only opt-out if you leave some legal documentation ahead of time, even family can't step in.

Not only do states here take an opt-in approach, but even if you state in your drivers license or will that you want to organ donate, they allow family members to supersede that and stop the donations.

I would support an opt-out method in a second.

You've kinda contradicted yourself:

It should be simple-we pay for health care

including being available to people who don't have it and can't afford it!

How do people who can't afford it, pay for it?

Let's be fair. Within the last fifty years, name one disease cured. Acne, and hard-ons don't count.

My question...

When was the last cure introduced by a drug company?

Killfile. The Drug Companies cured cancer? I don't think so.

The question also ignores the nature of some diseases. Take viruses for example. Once you get a virus there is no cure. Period. You have the virus and you have to fight it off with your own immune system. There are drugs that can help that fight, or reduce your symptoms, but you can't cure a virus. That's why we still have the common cold and it's still quite common. The best you can do with a virus is create a vaccine for it and inoculate people against it so that their immune system will already carry the antibodies.

This is simplifying things a bit, but I'm not looking to write a book and you get my point.

Killfile, I think you'er missing my point. Cancer researchers have had government and private funds donated to them for decades. When a promising find is discovered. only then do the drug companies get involved. Drug companies work on the Bic disposable razor business model. That is they recoup their money from any research and make their profit from selling drugs that treat illness. Not Cure. If you have a disease, they'll find the pill. But you need to take this pill for the rest of your life. this is not a cure, it is treatment. Vaccines are not invented by drug companies. Cancer treatment is not invented by Drug companies. All these innovations come from the Private sectors of Universities and other privately funded research facilities.

So what exactly is your point then?

If you have a disease, they'll find the pill. But you need to take this pill for the rest of your life.

I don't know, I've been sick a few times like anyone else, and yet I'm not currently on any lifelong medications.

Antibiotics cure illnesses caused by infectious bacteria. and vaccines prevent them. Drug companies make money by treatment, not cures. You have been sick and have taken drugs like Penicillin and it's derivatives the Deuteromycotina with other antibacterial medications that have been discovered in the private sectors of medicine. These discoveries are then bought by the drug companies produced and sold. There is a big difference between catching pneumonia and taking an antibiotic and getting herpes or HIV and having to take a drug for the rest of your life. These are not cures. Drug companies don't make money by selling just one pill, or something you need one shot for. Who invented Penicillin? Who discovered the Polio Vaccine? Drug companies are no better then any drug dealers on the corner are, who profit from your dependance. The only difference is they don't create the need.

The organization Consumers International says that pharmaceutical companies exert an undue influence on doctors' prescribing habits in the developing world, by treating the docs to lavish gifts. Cynthia Graber reports.

Whenever the bottom line becomes more important then a human life then it is amoral.
Insurance and drug companies are nothing but organized profiteers of human suffering.