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Culture War Roundup for the week of December 16, 2024

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A Window Into How Health Insurance Companies Harm Consumers by Threatening to Deny Coverage

From the New York Times, we learn about how health insurance companies hire PBMs (Pharmacy Benefit Managers) to help them restrict access to doctor-prescribed drugs. For all the talk of insurance companies directly denying coverage, when it comes to pharmaceutical drugs, specifically, they're able to offload a significant amount of Delay, Deny, Defend onto third parties, in this case PBMs. By restricting coverage, insurance companies are able to reduce costs and increase profits. A bonus is that they don't even have to be The Bad Guy; they can pawn that off on a third party, who is ostensibly making the choices for them. They don't have to personally defend the decisions to deny; they can just obfuscate, wave in the direction of the third party, and let the complexity of The American Healthcare System stymie consumers.

The Times does a deep dive into a Good Guy Pharmaceutical Company and the lengths they have to go through to navigate this minefield to get their high-quality, purity-assured drugs into the hands of the market. Primarily, they've gotta give the PBMs a cut of the money, who in turn share it with the insurance companies and employers they represent. For a while, they were rebating 23% on average, allowing patients to access the drugs their doctors prescribed at prices that were reasonable to them, their employer, and their insurance company. One PBM reportedly wanted (and got) more - 60% rebate to keep prices low and avoid inflaming popular anger with denials. Of course, that still doesn't quite reach how good some Medicare plans were at 'negotiating'; they got about 70%!

The Good Guy Pharmaceutical Company knew how much people wanted its product; they knew that doctors were prescribing it; they knew how dangerous the alternatives could be for many in the market. They were offering a well-known, well-tested product, clean from any adulteration, and outrage would surely rule the populous if folks had to turn to alternative products or sketchier outlets, possibly with less-stringent quality control. So, they selflessly paid the toll to do the right thing, to get their product into the market, to save lives. NYT rightly applauds their admirable efforts to do what they could, at cost to their own bottom line, to protect consumers from the restrictive, denial-focused tactics of health insurance companies and their lackeys.

Oh wait. NVM. It's Purdue. It's Oxy. Flip everything 180 degrees. Apparently, nobody (other than Purdue and their supporters) thinks it's good to flood the market with high-quality, pharmaceutical grade opioids with well-known potency properties. They somehow don't think that this is preferable to folks getting funneled toward lower-quality, potentially dangerous alternatives. They're back to liking the gatekeeping of insurance companies and their lackeys, ya know, so long as they're doing so in keeping with their own political proclivities. Gatekeeping is Good and Right, so long as the folks who buy digital ink by the barrel can browbeat the gatekeepers into doing things the way they want it to be done. ...and they sure ain't even thinking about including libertarian politics on drugs in the list of their demands. Woke politics, tho? Sure, why not?

So, corruption?

If I had a point, which I'm not sure I did, it would be that how you view it turns on other politics. How many people who are screaming about how they want the gov't (Medicare) to "negotiate drug prices", presumably making them cheaper and pulling profits out of drug companies, are going to call these rebates "corruption"? ...can they do so with a straight face, when Medicare plans were getting the biggest rebates of them all? How many people viewed all doctor prescriptions (and their charges for their own services) as sacrosanct, with any gatekeeping by insurance companies being evil, and will now be dissembling that these doctor prescriptions totally need gatekeeping, because doctors are apparently dumb and bad? How many people who would be crying, "Legalize all drugs!" with arguments about how important it is to have quality-controlled pharmaceuticals available are going to say that Purdue actually was "Good Guy Pharmaceutical Company", just fighting for the cause of reducing fentanyl deaths by taking the hit in profits to get their product in the market?

The whole industry is an awful mess, with kludge upon kludge, and many folks can't even figure out what they want from a system. They're easily swayed by framing, and so "negotiation" becomes "corruption" if it's framed that way; doctors are sacred and we need to stop insurance from getting in their way or they're dumb and need gatekeeping depending on how it's framed, etc. The lack of a clear vision and susceptibility to framing makes the whole thing prime for more kludges promising to be fixes, more unintended consequences from a lack of clear purpose in the heaping of regulation upon regulation. (I didn't even mention the confounding factor of people wanting to use it to transfer incomes or the sheer constitutional (little c) inability of folks to allow people to make choices with prices.) It lets anyone be the temporary Bad Guy in the fervor for the latest Current Thing. We broke it, now we've clearly bought it, with no bloody clue what to do with it. So the best thing people can do is try to part it out in favor of their political goal of the minute.

It’s worse. They know what they want, it’s just impossible to provide. They want walk-in world class healthcare for cheap. They want it for cheap if not free. They want to walk into a doctor’s office, get seen quickly, then go to a specialist, pay twenty dollars each for the office visit including any tests, get a prescription for pills that they then pick up at Walgreens for less than $50 for a bottle of name brand life-saving drugs.

I don’t care how you re-engineer our health care system, the system cannot provide what the public wants. No system can. If it’s fast and doesn’t ration care to patients, it cannot be cheap. If it’s cheap, it’s because you either wait or you push the very sick out of the system (likely both). People want fast, world-class, cheap healthcare. At best, we can provide ONE of those things. If you want cheap healthcare, it’s going to be long waits and heavily rationed. Most orthopedic care is going to be reserved for tge very rich. You can expect to wait months for an office visit. And if you need something more than the primary care physician can do, that’s another couple of months to see whoever can fix the problem, and another couple of months to actually get anything done about it. If you want fast medicine, you have to pay for it. Likewise if you want to give everyone world class care without heavy rationing.

It’s a hard sell because people want all three and are assuming corruption or profit is the reason they can’t have cheap healthcare on demand. And politicians can’t or won’t tell people that they are asking something impossible, so the insurance companies get the rap fo4 doctors not being willing to work for the pay of store clerks and drug development costs being high.

There's a way to do it, it's the sausage principle - don't look how the sausage is made. You redefine "cheap" as "no payment at the point of consumption" (or a nominal payment) and you hide the real costs. The best way to do it is through taxation since nobody reads the budgets and nobody is able to figure out how much exactly money is spent on what, and even if somebody does that, it's no longer your money, it's some abstract tax money and you can always demand that the billionaires pay more - it has nothing to do with you. If for some reason the obvious way is not available, you can at least separate payment and consumption by calling a pre-paid subscription scheme "insurance" and by deducting the payments in a way that you never get to touch the money before payment (e.g. payroll deductions) so you don't feel it's your money - it's just your employer provides you the service for free, how generous of them.

You can redefine "fast" as "you can talk very fast to somebody who is in no position to help you". Many healthcare organizations do that - e.g. to get an appointment to a specialist, you need a "referral" from your primary care doctor, and maybe the primary doctor will see you next week, and then the appointment to the real specialist will be in another couple of weeks, and so you waited almost a month or so without even noticing it. And there's no guarantee that specialist can do anything for you either - maybe they will refer you to some tests, then to another one and so on - and you can spend many months in this without even getting as much as initial diagnosis. Of course, added value of this is each interaction must be paid for (sometimes several times over - you can't just put lab technician pay, lab materials pay and visit pay on the same bill, we're not some kind of savages!) but "insurance" covers it so you never actually know how much does it cost, not that it'd help you since you can't elect to use another lab technician anyway if you thought this one charges too much, and in fact nobody is going to tell you how much it costs anyway - because that's exactly what was asked for from the start.

And there's no "rationing" - it's just the doctors are very busy. And for some reason there's never enough of them. As for the quality, if you have to wait several months to see a specialist, and there's no other one in 500-mile radius of you, how much are you in the mood to refuse to visit one because you think they're not world-class enough? How do you even know what's world-class - how many ENT specialists or podiatrists have you seen in other countries to be able to know the difference? It certainly costs a lot, and it seems to be a lot of demand, so it must be very good, right?

So the system is actually going out of it's way to provide exactly what is being asked for. It's just since, as you noted, it's not possible to actually provide it, it works very hard at making it appear as if it's doing it. Because that's exactly what we're pushing it to do. And it is delivering that to us as much as it can. People think it's a hostile system - but very often it's not, it's just reacts to our demands of it within the limitations placed on t and tries to deliver what it can.