Dying for Health Insurance

04/28/2010 05:12 am ET | Updated May 25, 2011

Bob Iritano's doctors told him he had an incurable form of cancer. But, they said, there is a treatment that could keep it in check--at least for a while. Bob was willing to try anything. He has a wife and four kids. But while fighting for his life, he ended up also having to fight his insurance carrier.

Bob Iritano's story tragically mirrors that of another local families struggle with their health care provider. Three years ago Los Angeles resident Hilda Sarkisyan fought her insurance company's refusal to cover a liver transplant for her teenage daughter Nataline. 2010-02-26-20071221_nataline_sarkisyan_18.jpg
TV cameras captured her confrontation with CIGNA spokesman Wendell Potter and the ensuing protest in front of the company's Philadelphia headquarters. Although CIGNA eventually reversed its decision, the victory was tragically short-lived. Nataline died later that same day. Potter was so deeply moved by her death that he quit his job as head of communications and become a leading advocate for health care reform. So Cal Connected tracked down Potter to get his take on Bob Iritano's struggle to live.

Q: What is your initial reaction to this case?

A: It happens all the time, and it's only the occasional incident that comes to the public's attention. It's something that regrettably the American public just doesn't seem to understand. They have been made to be so fearful with this debate on health care reform of the government getting more involved in health care. Yet what this demonstrates, and what I've been talking about over the past several months is that we have a Wall Street-driven health care system. And decisions are made by for-profit driven health care companies to meet analysts' expectations and investors' expectations. [We have] once again all the evidence anyone would ever need that a doctor's opinion, a doctor's request for treatment can and often is overruled and denied by a corporate employee at a big insurance company.

Q: And these medical boards that make the decisions, they're paid by the insurance companies-- in this case, Health Net-- is that correct?

A: That's exactly right. Health Net, and the other big insurance companies, have a contract with doctors who they send cases out for review. And they pay them. They actually pay them. And the doctor that does this review that is paid by the insurance company, never sees the patient, always just sees the paperwork, and always is that removed and often is probably in a different part of the country. They are paid by Health Net, and Health Net will protect their identity. If you go to Health Net and ask them who made the decision that this was experimental in this case and I bet you they won't tell you. They'll tell you that they have to protect the anonymity of the person who's doing the reviewing. [They did provide KCET with a copy of the peer review final report but they the name of the third party radiologist was blocked out].

Q: Furthermore, in this case it's clear that what they recommended--the chemotherapy--it's in his records that he had an allergic reaction and almost died from it when it was tried before.

A: I suspect that what Health Net is saying is that be that as it may, that now--considering his current health--the prescribed treatment is perceived to be or agreed to be by the reviewers to be experimental ...[and] what the reviewer was asked to consider might not have been the complete medical record. I know that that happens.

Q: You are in such a unique position because at Cigna you were the man who would be doing this stonewalling and not giving me the names and the straight answers. You've referred to having lost your moral compass.

A: Yeah. I did. I came to realize that I was doing something that I felt was the exact opposite of what I was often trying to do when I was a reporter, which I was in my first career, of trying to make sure that people had the information that they needed to get to be informed, and to try to get at the truth. I felt that I was maybe doing just the exact opposite -- I was NOT providing information for one reason or another, and usually because it was information that wasn't deemed to be appropriate. I just...I came to conclude just based on my own set of values that I didn't want to be involved in doing that again, and I didn't want to be involved in another effort to try to kill reform, which I knew that I would be. Because of the work that I had to do, I would have been in a position to have had to have support the industry's efforts to do what it's doing to try to influence and defeat reform or shape it in the industry's benefit. I didn't want to do that anymore.

I felt that a lot of practices and procedures of the insurance industry is a direct result of the profit-motive and the expectations from investors. For investor-owned companies, they have a legal obligation to serve their shareholders first. That's exactly what they do. They do a lot of different things to be able to meet investors' expectations, including using the use of pre-existing conditions, which they've been using for many years; getting rid of customers when they have some reason to think they might have not included something in an application; purging small businesses when an employee gets sick through raising rates so high that the small business but to drop insurance; and denying care, or denying coverage, is what they would say. They would say that they never denied care, which is technically correct, I guess. But the reality is that it's denial of care. When you're denying paying for something, the real world consequence of that is that it's a denial of care, because most people don't have the means to be able to pay some of the cost of treatment that they would have to go to, often to survive.

I knew that people cannot afford to assume the burden of medical care in this country, even if they're insured. And even if they are covered under certain plans, they have to pay so much out-of-pocket anyway before insurance kicks in that in many cases people forgo care because they just can't afford their co-insurance payments or meeting that deductible. But the in cases like [Iritano's] know this: that it could have been approved at CIGNA or Aetna or another company. It varies. It's the luck of the draw, because it's an opinion. It's nothing more than an opinion based on a review of some documents, not the review or physical examination of the patient.

Q: If the chemotherapy was the more expensive option, how worried do you think Health Net would be about the experimental nature of the other process?

A: What they will tell you is that the reviewers are never made aware of the cost of a procedure or treatment... but of course anything that is sent out for review, you can rest assured it's a big-ticket item. But they will tell you, and they have to do this for legal reasons, that the reviewing physician is not made aware of what the cost of the procedure would be. Of course, the reviewing physician would have an idea because the reviewing physician theoretically is someone who has knowledge of the disease or the reason for the treatment.

Q: I understand from a previous interview that you did that within the health care industry money that's actually spent on a policy holder is called a "loss?"

A: Yes, the term in the industry for losing money for care is called a medical-loss ratio. The industry's trying to put a euphemism on that, and often now you'll see companies referring to it as medical-care ratio. And that ratio has been coming down for many years, and it is a measure of the percentage of premium that an insurance company takes in that it actually spends on claims.

Q: Getting back to that moral issue. Assuming you're not the only person in the history of the health care industry to find your moral compass, I'm wondering if you have any advice for Bob Iritano of his approach to Health Net, and how he might appeal, or who he might appeal to.

A: I would appeal to the CEO. That may not get anywhere, but that's one thing I would do. Try to make as big a stink as possible. Now, they've already done that through the story in the Los Angeles Times, So they were fortunate that they found a reporter who was willing to tell the story, and therefore get Health Net to reconsider. It's very interesting and not a bit surprising that in the statement that they gave to David Lazarus, [they emphasize that they] are not setting precedent here. Because they're doing it at the advice of lawyers to make sure that this is not seen as they're making an exception here based on their own rules, that they're deciding to do this out of the goodness of their hearts, essentially is what they're trying to say. But when a case attracts media attention it immediately becomes a high profile case within the health insurance company, and typically you'll see conference calls being scheduled very quickly for the PR people, the lawyers, the medical executives, the sales people, whoever needs to be involved, and the medical reviewers, to be on a call very quickly. And the PR person has to say well here are the PR consequences of your decision. So, often the company will change hoping the publicity will go away.

Q: You were at a press conference earlier this week with Nancy Pelosi to talk about some new legislation that would repeal antitrust exemptions?

A: That's right I did join Speaker Nancy Pelosi and some other House leaders in supporting the legislation which would repeal the insurance or health insurance industry's exemption from the federal antitrust laws which they've enjoyed for 65 years. [The House voted 406-19 in support of the Health Insurance Industry Fair Competition Act which is now headed to the Senate for its consideration].This is a substantive development. It is one of the ways that the insurance industry has been able to get such a strong grip over our health care system.

Q: So for the consumer, what does this translate to?

A: It will make the insurance companies behave like every other industry there is except baseball--the only other industry that has this antitrust exemption. It will mean that regulators will have the authority to scrutinize these insurers more than they have in the past, and to make sure that they're not engaging in anti-competitive behavior that is anti-consumer behavior. It means that regulators will have more incentive and the legal authority to look more closely at the behavior and the practices of insurance companies.

Wendell Potter's blog.