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The Fox Guarding the Hen House

I apologize for another health tip on troubling trends in the healthcare industry. I know you prefer articles about supplements that can melt away your love handles, firepower your libido, or transmogrify your skin to the smoothness of a baby’s behind, but these professional secrets will have to wait.

(If you’re desperate, click over to mercola.com, leave your credit card, and then hit the “back” button to finish this article.)

Whether or not a doctor is a member of the AMA (only one doctor in three is–I am not), its weekly newspaper shows up in every doctor’s mailbox. Every issue should be bordered in black because each one delivers gloom and doom on the troubled state of health care: declining insurance payments, increasing malpractice premiums, physicians declaring bankruptcy, rising rates of anxiety and depression among physicians, and where to buy a decent 1990 Toyota Corolla (only kidding on that one). Peruse a couple of issues yourself to learn why 75% of physicians actively discourage their kids from becoming doctors (as I did with my own).

One recent front-page article entitled “Insurer-owned clinics bid to offer more patient care,” stirred in me all the clichés we associate with fear. You know these from the back cover of any Stephen King book–blood runs cold, lump in throat, deer in the headlights. Reading the article, I felt paralyzed with helplessness, physician Gulliver tied down by health insurance Lilliputians.

“Insurer-owned clinic.” The concept of a health insurance company owning its own clinic likely means nothing to you, but this is old stuff to me. Twenty-five years ago, my dealings with “insurer-owned clinics” almost compelled me to walk out of health care altogether for the peace and quiet of my own Dunkin’ Donuts franchise, pouring coffee, counting Munchkins.

I’d thought clinic experiments by the insurance industry had finally died in the early 1990s. Forgotten names like PruCare, Share, ChicagoHMO, and Michael Reese Health Plan may not even register with you. Even Humana owned its own hospitals and clinics. But trust me on this: you’d rather have the zombies from “Night of the Living Dead” come back to life than insurer-owned clinics resurrected.

I have difficulty getting a few facts about insurance companies across to people

  • All insurance companies make profits for their investors by collecting money (premiums) from the innocent and naive and then keeping as much as they can for themselves.
  • Only in the direst of circumstances and under the greatest of pressure will insurance companies part with this money.
  • Although they’ll cancel your policy if you’re a few days late on your premium payments, they shift to slo-mo when it’s time for them to write anyone a check. Health insurance giant CIGNA is now one full year behind in physician payments with their State of Illinois enrollees.
  • When it’s something obvious, like the euphemistically named life insurance, you’d think there would be no problem forking over the money to your loved ones after you died. But even after you die, they’ll meticulously comb through your doctor’s notes, any forms you filled in long ago, and so forth, looking for something—anything–to weasel out of payment. To answer your unasked question, yes, our office gets “records requests” from life insurance companies when one of our patients dies.

When it comes to your health, common sense tells you you’ll need a trained professional (c’est moi!) to find out what’s wrong with you and help you get well. And this is important to remember: Your physician’s decision-making process is always based on what’s best for you, and never what’s best for your health insurance company. Financial considerations–i.e., does the patient have insurance and, if not, can she afford the care–play a role in the doctor’s thinking, but these considerations are always secondary to what’s best for you.

So when an insurance executive uses the phrase “we want to control healthcare costs,” he really means “we need to figure out a new way to avoid paying benefits because doing so chips away at company profits.” After all, the $102 million salary recently awarded to the CEO of United Healthcare has to come from somewhere.

“What’s best for the patient” is so ingrained into a physician’s psyche that during the 1970s and 1980s, when the health insurance industry tried to change this thinking and teach doctors to put finances first, they met an intractable and insurmountable wall of physician resistance.

And this is where my own story applies
I was involved in the debacle of insurance-run clinics a couple of decades ago, when I was employed as medical director of a 50-plus doctor group, where virtually all of the patients were enrolled in the newly invented HMO (an ironic euphemism, “Health Maintenance Organization,” harrumph! Snort!). Although our group was not owned by any single insurance company, the situation was actually worse. At least a half dozen of the insurance giants watched our every move, with me as the point person to call if they saw something they didn’t like. Which, naturally, was often.

And what they didn’t like was easy: spending good money on something as mundane and inconsequential as patient care. Each company had its own suggestions on cost control, each its own policy and procedure manual. Every trend in our group’s medical decision-making was scrutinized by an insurance company team consisting of the insurance company’s medical director, a “utilization review” nurse, and several MBAs (the initials really stand for Management By Arrogance and to this day I am uncomfortable in the presence of one).

The team never examined our clinical skills, compassion, or whether our patients were happy with their care, but rather how much money we were spending per patient. Whether the clinical decisions involved something inexpensive (such as a blood test) or expensive (like hospitalization), their attitude was always, “How can we reduce our costs?” or “Did you really have to order that (test, procedure, referral)?”

True story: As medical director of our group, I met with one of the insurance company medical directors every few weeks to review expenses. During one such meeting, we were in a restaurant and this man was admonishing my group for sending too many patients to podiatrists for foot care. In the middle of dinner (I kid you not), he reached into his pocket and pulled out a pair of toenail clippers and starting clicking them in the air above our food. “I carry these wherever I go,” he said. “When any patient wants a referral to a podiatrist, click, click, I trim his nails. Saves us a fortune and patients love it. They tell their friends, ‘My doctor clips my toenails!’ I think you should buy a set of toenail clippers for every doctor in your group.”

I pictured the look on the face of our bookish psychiatrist, our prominent neurosurgeon, as I handed out toenail clippers to everyone. I also realized in this “toenail moment” that healthcare was heading for big trouble. To the detriment of this particular medical director, he applied his bizarre frugality to himself. He was opposed to colonoscopies between ages 50 and 60 (the standard recommendation) as being too costly. The price? He died rather young of undiagnosed colon cancer.

What finally compelled these insurance-owned clinics to close up shop was their inability  to generate enough profit for themselves despite their incessant harping on physicians to reduce costs. Understand this about any doctor’s training: from high school graduation to becoming a practicing physician is a minimum of 11 years of education, including years of hospital work. By the time a doctor is educated enough to treat patients, thousands of inviolable rules are ineradicably etched into his or her brain, rules like “follow up on an abnormal chest x-ray with an MRI,” or “every patient with chest pain needs to be sent to an emergency room.” No insurance company can ever change that, even one whose medical director waves around toenail clippers.

Years later, I was speaking with a now-retired health insurance executive and asked what finally killed off the insurance-owned clinics. He answered, “The doctors! We couldn’t control the doctors.”

Back to the future
So why are CIGNA, United, Humana, and all the usual suspects going back into the clinic business? Because there’s a delicious smell of money in the air: Obamacare. Remember, there’s no public option. Under the new law, everyone “chooses” a private health insurance company and the government picks up the tab. So the insurance companies open clinics in areas dense with the politically voiceless: low-income Americans, immigrants, the elderly. Put up flashy signs and give every new enrollee a free iPod for signing onto their plan and wait for the money to pour in.

But this time they’re smarter. This time they’re not going to bother with those pesky doctors. To really control costs, they’re going to limit the clinic staff to nurse practitioners and pharmacists, and make them all employees of the insurance company. No physicians to push back against insurance greed.

Really there’s nothing wrong with nurse practitioners or physician assistants as healthcare providers in underserved areas or at the clinics you find in drugstores, especially with the looming shortage of family physicians. But when any health-care provider is an employee of your insurance company, you, as the patient, automatically become the victim of an egregious, frightening, and potentially dangerous conflict of interest.

The insurance company fox is guarding its neighborhood clinic henhouse and licking its chops.

Do me a favor and please…

Stay well,

David Edelberg, MD



Leave a Comment

  1. I actually prefer these blog posts. This is information that is much harder to obtain.

    It terrifies me, I am living in Amman Jordan, a developing country. I have better health care here and I have affordable health care costs.

    We purchased a $350 annual health insurance policy because I am having reconstructive surgery next week to remove excess skin from extreme weight loss. It will be covered 100% by insurance because my doctor feels that my health will be better without this excess skin and fat that will probably never be lost.

    No questions asked no approval needed by the insurance company. He said I need it I get it.

    The USA should be ashamed.

  2. Addie says:

    It looks like general public opinion is with you. This is from the June 15, 2011
    Insurance Networking News:

    “Interestingly, insurers fared poorly against other industries when it comes to public trust. For example, while 71% of respondents expressed trust in the retail sector and 65% expressed trust in packaged food manufacturers, only 39% expressed trust in insurance companies. Indeed, only financial services companies (35%) and the federal government (31%) tallied a lower degree of trust among respondents.”
    For the complete article go to:

  3. c.laporta says:

    Blue Cross Insurance just made a huge profit for 2010, and one executive earned $8 million! God help us all, we can not ever be ill. And if/when we do need medical help, will it be there?

  4. Tony Spreitzer says:

    Common “health” sense will one day win out over
    getting the bucks/greed. For better or worse, it will be because folks will realize that prevention costs less. Thank you, David, for keeping us informed and for keeping up the fight!
    Be well yourself.

  5. I cannot say I’m surprised….as a massage therapist I encourage my clients to go as holistically as possible…I share your newsletters with them and especially the ones about statins, they are dumbfounded that doctors (use that term loosely) prescribe because of Big Pharma, we need to do something NOW!!!

  6. Patrice Gallagher says:

    Ugh – I feel sick!
    Dr E, thank you for your expose and for my new talking points on this issue.
    I’m so grateful you are my Doctor!

  7. Very interesting. I esp enjoyed the podiatrist part. As you are probably aware, there was a recent independent evaluation that found that podiatrists see the worse off cases and yet have the fewest hosp days and money spent on amputations and diabetic foot expenses.
    I’ll send you the reference!. Debra

  8. Nancy says:

    How is this different from what the banks are doing to people with mortgages? How is this different from what the states are doing to front line staff who work with the mentally ill, the working poor, the indigent, and those who have lost their jobs to bail out the banks?
    What we need is NO INSURANCE health care with a single payer through the government. It works in all the advanced countries! I am so tired of being told, “In Canada they have to wait for health care service”s — perhaps so, but they do get care! In the USA, too many people get no care, or very bad care, and we are told it is “the worlds best medical care” — if you can afford to pay for it. Insurance companies are now worming their way into vet medicine and just watch the prices go up and up.
    We all need to wake-up and stand together against this greed.

  9. Jude Mathews says:

    Dr. E: Do not imagine we don’t appreciate these articles on the state of healthcare in the US. We’re learning things from you, and arming ourselves, to the extent that we are able, against the immoral assault on good medical care for all people. Any ideas about how we can convince enough people to get real change to occur?

  10. As an autism mom, researcher, and expert I have gained the knowledge that if I want the cause of why I am sick treated I go to an integrative medicine or functional medicine dr. it is very unlikely these dr’s take insurance. It is for the very reasons you stated. Physicians like u need to be applauded. U are practicing REAL wellness care.

  11. Nanci Chesek says:

    Lest we forget it was the Republicans who thwarted Obama’s plan for medical health reform that included a single payer option. The real tragedy is that he could not win the battle. Shame on all those who opposed HIS plan.

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