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How Risky Is It When Insurance Companies Overrule Doctors?

When physicians prescribe a drug, should insurance companies be able to overrule that decision? Are insurance companies practicing medicine?

Doctors don’t always know best, but they certainly know their patients far better than an insurance company representative. Physicians used to be able to prescribe medications without being second-guessed. That seemed logical. After all, health professionals have the expertise to determine the most appropriate treatment for any given patient. But now insurance companies can make life and death decisions without knowing important details about a particular patient’s health.

In theory, the insurance company representative who rejects a doctor’s decision to prescribe a particular medicine or procedure is doing so based on “best practices.” But are these insurers practicing medicine without a license? Even when a doctor at the insurance company says NO to a drug or a surgery, is he helping or hurting the patient? Is denial more about saving money than saving lives?

Are Insurance Companies Cost Effective?

Americans spend more for our healthcare than six other advanced countries combined (Health Affairs, Dec. 13, 2023). Germany, Italy, Austria, Spain, France and the UK all have universal coverage for their populations. That means everyone is covered by taxpayer-funded healthcare.

Those six countries have a total population of 335 million people, which makes them as a group comparable to the US with 331 million people. American taxpayers shelled out $1.8 trillion in federal and state health care costs in 2022. That’s not quite half of the total health care bill which came to almost $4.5 trillion.

The total bill for the six nations that cover their entire population came to $1.2 trillion, about two-thirds of what the US government spent without covering everyone. The United States ranks 34th in the world in terms of health despite spending the most.

The Healthiest Countries in the World:

There are a lot of people in this country who hate the very idea of Medicare and Medicaid. They promote private insurance as the answer to all our health ills. And yet if we look at the healthiest countries in the world in 2023 we see the following:

Rank            Country                  Bloomberg Health Index

1                      Spain                           92.75

2                      Italy                            91.59

3                      Iceland                       91.44

4                      Japan                         91.38

5                      Switzerland              90.33

6                     Sweden                      90.24

France comes in 12th with a score of 86.94. Austria is 13th with a score of 86.3, the UK is 18th with a score of 84.28 and Germany is 22nd with a score of 83.06. All the countries at the top of the health index have universal health care.

The US, which is a mix of public and private (through insurance companies) ranks somewhere between 34th and 38th depending upon the ranking system. It’s numerical value is 73.02 based on the Bloomberg Global Health Index at this site.

So, we spend the most but don’t get a big bang for our bucks!

Doctors, Patients, Insurance Companies and Prescriptions:

In most states a doctor must perform a medical evaluation before prescribing any medicine. As far as we can tell, insurance companies do not perform medical exams. And they may not always review medical records carefully.

That’s the startling report by Linda Girgis, MD, in an article published online in MEDPAGE TODAY’S KevinMD.com (March 29, 2018).

Here is the gist of the article:

“Earlier this month, it has become known that the former medical director of Aetna, Dr. Jay Ken Iinuma, admitted under oath that he sometimes did not look at any medical records when making these determinations. Additionally, when he did review the medical records, he reviewed only portions of them.”

“As doctors, we all know patients who had care denied in spite of the fact that they really needed it. It seems that the more we appeal a decision based on evidence-based medical practice, the less likely it is to be approved. As it is, the insurance companies are not required to follow evidence-based guidelines and often follow the ones they choose, creating their own guidelines with the goal of cost reduction, not clinical outcomes.”

Insurance Companies Can Just Say NO:

Insurance companies can refuse a particular prescription, demand prior authorization through a third party (pharmacy benefit manager or PBM) or substitute a different medicine for the one the doctor prescribed.

We are outraged by the high prices drug companies often charge for brand name medicines. But if a doctor determines that the brand name is essential for the health of a patient, we do not understand how an insurance company can refuse to pay.

The Case of the Dying Mailman:

Many years ago, we heard from our mailman that he had spent weeks in the intensive care unit as a result of an insurance company decision. His doctor had prescribed brand-name Zantac (ranitidine) for his acid reflux. This acid-suppressing drug had worked well with no side effects.

When generic cimetidine (Tagamet) became available at a much lower price, the insurance company insisted that he switch. Not long after starting on cimetidine, he developed a life-threatening reaction called Stevens-Johnson syndrome (SJS).

In this condition, the skin blisters and peels off. Mucous membranes are also affected. The mouth can become extremely sore and inflamed. Infections, pneumonia and organ failure are potential further complications.

After weeks in the hospital, our mailman finally began to recover. It took months for him to get back to work. The insurance company spent an untold amount of money for intensive care.

When it came time for him to fill his next prescription for Zantac, however, the company again tried to insist that he take cimetidine, the drug that had left him close to death. Needless to say, he chose to pay for brand-name Zantac out of pocket instead.

A search of the medical literature turned up other cases of Stevens-Johnson Syndrome linked to cimetidine. The first we found was published in The Lancet on August 19, 1978.

The authors noted that:

“Cimetidine was the only drug which the patient was taking before the onset of the Stevens-Johnson syndrome. Neither could we find evidence of any other precipitating factor. To be sure that cimetidine was the cause of the problem we would have had to challenge the patient with the drug; however, we felt that this was ethically unjustifiable.”

Amen to that! How, you might wonder, could an insurance company be so short-sighted as to require a patient to take a medicine that had nearly killed him? The costs to treat this adverse reaction were astronomical. Perhaps there was little, if any, actual thought involved in the decision to reject the brand name Zantac. If an insurance company physician was involved in this decision,  we would propose that he might be vulnerable to malpractice. Any state legislator that allows such incompetence from insurance companies should be booted from office.

Penny Wise and Pound Foolish:

This is not the first time patients have been harmed by cost-saving decisions made by insurance companies. A cardiologist we know often spends hours on the phone trying to convince an insurer to cover the brand name medicine he believes is essential for the health of his heart patients. This is time not spent caring for patients directly in the clinic.

He has had patients with hypertrophic cardiomyopathy develop complications because a generic beta blocker did not perform as expected. Patients with heart failure need to control fluid retention, usually with a diuretic like Lasix. This cardiologist has seen patients deteriorate when taking certain generic furosemide formulations that the insurance company required and the pharmacy dispensed.

Readers Speak Out About Insurance Companies:

Readers have expressed their own outrage. One person wrote:

“I am very upset about insurers that refuse to honor prescriptions for brand name drugs. I was on losartan, but it was recalled because it was contaminated with a carcinogen. I started buying Cozaar instead, but my insurance doesn’t cover it. I guess the insurance company would prefer I get cancer.”

Another reader noted:

“In the past few years, I’ve had problems with four generic drugs not performing like the original brands. In each case, it has affected my health negatively. I’ve had additional difficulty due to insurance company intractability.

“This situation is becoming increasingly frightening, in part due to the influx of medicines from China, and I have a bad feeling that it is going to get a lot worse before it’s addressed.”

We do not disagree. The FDA has congratulated itself on the increased number of generic drugs it has approved over the last few years. This accelerated approval process means that more foreign-made pills are destined for the U.S. marketplace.

We are not opposed to manufacturing in other countries. That said, we want much better scrutiny of the process and we want the FDA to test the quality of all the drugs entering this country from abroad.

Patients vs. Insurance Companies:

We receive an extraordinary number of comments from visitors to this website. They share their stories about a wide range of issues. We hear frequently from people dealing with insurance company challenges.

Martha in North Carolina has serious dry eye syndrome:

“I have been prescribed Xiidra. It’s about $625 a month. My insurance refuses to cover it, nor will they apply it to my out-of-pocket max. The manufacturer will not allow use of their savings card because I have insurance. None of this makes sense to me. The real question is, how do I get the drug at an affordable price?”

Martha asks a great question. We do not have a good answer. She is caught between the manufacturer and the insurance company and neither wants to cut her any slack.

Lifitegrast (Xiidra) is a treatment for severe dry eyes (Journal of Pharmacy and Pharmaceutical Science, Jan. 9, 2019).  It works differently from previous dry eye drugs. It reduces inflammation. Summarizing the clinical data, we would say that roughly 15% to 20% of patients with dry eye disease saw a substantial improvement with Xiidra compared to those on placebo. Not a home run, but a solid double for symptom relief.

Sadly, the price, even with a coupon, is between $650 and $760 for a month’s supply. In Canada the cost is also high, but about half as much as in the US. Without insurance company assistance, this medicine will be out of reach for most patients.

A far more serious situation came from George. He wrote about prostate cancer.

“My oncologist prescribed Leukine (sargramostim) injections to stimulate my immune system and lower my PSA. My doctor believes that if Leukine is added to my other medications I can maintain a durable remission against prostate cancer.

“The cost of Leukine is over $3,600 a month. The insurance company has refused to pay for this drug. I cannot possibly afford this medicine. My oncologist appealed the insurance company’s decision, but that didn’t work. How can an insurance company refuse the doctor’s decision?”

We fear that it happens all the time. States apparently allow insurance companies to get away with this practice. We do not understand it either.

We don’t think that insurance companies should be allowed to play doctor. There must be other ways to help control rising health care costs. The physician alone is in the best position to determine the most appropriate medication for the patient.

What Do You Think?

Please share your own experience with insurance companies, for better or worse. Should insurance companies be allowed to make life and death decisions about treatments? You can add your thoughts or story below in the comment section.

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About the Author
Joe Graedon is a pharmacologist who has dedicated his career to making drug information understandable to consumers. His best-selling book, The People’s Pharmacy, was published in 1976 and led to a syndicated newspaper column, syndicated public radio show and web site. In 2006, Long Island University awarded him an honorary doctorate as “one of the country's leading drug experts for the consumer.”.
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  • Hartman, M., et al, "National Health Care Spending In 2022: Growth Similar To Prepandemic Rates," Health Affairs, Dec. 13, 2023, https://doi.org/10.1377/hlthaff.2023.01360
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