Selling Medical Treatment Records: Booming Business?
Date: Tuesday August 5, 2008Posted in: Business, Civil Liberties, Health, Legal, Legislation, Media
Tagged: Department of Health and Human Services, Electronic Health Records, Federal Trade Commission, Health Insurance Portability and Accountability Act, Insurance, United States
A recent Washington Post article suggests that health and life insurers are scouring medical records in evaluating potential new clients. These reports, akin to “credit reports,” will hold the prescription information for more than 200 million American citizens. While the industry has yet to take off, it is expected to in the coming age of electronic medical records.
In the past, insurers would query the patient’s past medical records from individual physicians the patient has had contact with; soon insurers will contact a third party data-mining company which has pre-compiled records on many Americans. While the practice is promised to streamline the costs of health care, privacy advocates have their doubts. Insurers are optimistic about the technologies citing older methods of obtaining records more costly (hundreds of dollars per query) and time consuming and they may soon be able to quickly provide decisions within the same day or even on the spot for about fifteen dollars.
Advocates cite that many consumers must sign the form allowing insurers to release this information if they want health insurance, a big no-no privacy advocates state. It effectively says “You must allow us to disperse your medical records in order to receive coverage.” Unfortunately federal legislation does not protect the privacy of these consumers if they have signed a release form allowing the insurers to release their records.
Insurers may query Ingenix and Milliman’s servers about a patient which will return the most recent drugs and dosages prescribed, when refills were obtained and even the doctor’s address which prescribed the medication dating as far back as five years. The data aggregation tool also provides a “risk score” which implies the higher the score, the higher the medical costs which will be incurred by the patient.
The aggregation services also color code drugs according to price and risk involved citing AIDS and cancer medication amongst the highest risks to insurers.
From a business standpoint, it makes no sense for an insurer to sell a plan with a $200 monthly premium if the company knows that the consumer is taking medications that cost $400 every six months, industry experts said.
Firms providing these aggregate prescription scouring services say that about 10% applicants for insurance do not disclose the pertinent information which are revealed by prescription histories. Advocates also fear that insurers will deny people based on false pretenses for medications with multiple uses.
“I had a patient on Amitriptyline for migraines and they were denied life insurance because it’s also an antidepressant,” said physician Kate Atkinson of Amherst, Mass. “I had to explain it wasn’t being used for depression.” Another patient was on Prozac — not for depression, but for menopausal hot flashes. “I wrote an appeal letter, and they still wouldn’t give it to her,” Atkinson said.
Data aggregate services maintain they only provide information with the applicant’s consent as governed by the 1996 legislation HIPAA. But HIPAA does not hold entities responsible by direct investigation from the Department of Health and Human Services.
Though there is pending legislation within Congress to regulate such an industry by auditing of activities and even ability to impose civil fines. The bill also includes prohibition of the sale of medical records. In early 2008, the FTC issued an order stating that these organizations are regulated under the Fair Credit Reporting Act which mandates these organizations to notify both insurers and consumers denied coverage on the basis of these reports. With this, the consumer and insurers both have the right to request a copy of these reports in order to make corrections and ensure all data is correct.
Bob Gellman, an independent privacy consultant in Washington, said the FTC’s decision not to fine the companies sends “the message that it is okay to ignore the law.” That, he said, “is absolutely outrageous.”
As time goes on, Gellman says, more organizations will be able to compile more comprehensive reports about consumers’ health which will end up driving down the costs of data as well as leave consumers with no recourse toward organizations leaving them without many choices for insurance.
While the idea for a pharmacy database was conceived more than a decade ago, there is a huge case for it being made emergency room operators and to government agencies. Though aggregate companies said privacy is built in the system requiring consent of the patient before data can be released.
The whole story can be read on the Washington Post here: Prescription Data Used to Assess Consumers
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In a society with 47 million Americans without health insurance, the insurance companies are partly to blame. Included in the report it says that people routinely falsify applications in order to get insurance, which is mostly because people know they will be denied based on “preexisting conditions.” Considering the insurance industry (make no mistake, it is an industry) banks on people being healthy and hardly ever using their coverage, the industry denies those that are marked as “high risk.” If the industry insured all, those with and without “preexisting conditions,” the profit margin of the industry would not nearly be as profitable as it constantly shows time and time again.
Aggregation of this data can be useful in emergency purposes, but I do not believe this information should be aggregated for the insurance companies to decide whether to cover an individual or a family. This is going to be a very complex issue in the future when the aggregation of data shows genetic “preexisting conditions.” While there are laws in place to stop refusal of health coverage based on genetics, how close is this to something of that nature? This is a very slippery slope.
The aggregation of medical and prescription information can be useful in providing proper care and diagnoses for patients, but the industry has proven that is not its intent. The industry’s intent (regulated by law) is to generate the most profit possible for its shareholders, not the patients’ best interests at heart. The way to generate profits is by insuring the healthiest people, those who will not cash in on their policies very often, if ever. Those who will be using their insurance often for prescription medication or for hospital visits are not those that will generate profit. Remember, insurance is to provide people with health care in their most vulnerable times; not when it’s convenient for the insurer.
This is precisely the reason many call for socialized medicine, take it from the hands of an “industry” and give it back to those who pay for it: the people. Socialized medicine (while it has its pitfalls and misnomers) will be able to provide care for precisely the 47 million Americans who “aren’t healthy enough” to get health insurance from an industry. To drive the point home, 12 years ago Dr. Linda Peeno in a Congressional testimony said that:
This is exactly what can happen because of non-disclosure of “preexisting conditions.” The same “preexisting conditions” which will get an individual denied health coverage, the same “preexisting conditions” which would be disclosed by the data aggregation shown by the article above. Industries have proven by acting in lewd and lascivious ways with information of this nature, who expects the insurance industry to be any different? If this data were to be used by an industry to actually care for their patients, I may not be so opposed to it. However, when the information deny care to those who had been rightfully paying for it because of some clause about “falsifying an application,” when the medication prescribed years ago is no longer an issue, seems a little asinine to me. Yes, this does happen when insurance companies look for discrepancies in applications or non-disclosures which result in denial of large payouts ex post facto.
Some will argue that “these data aggregation services will lower the cost of health insurance!” Let’s be real, it’s a more efficient way of denying those who need the insurance the most, which in effect raises profits. Remember, corporations (by law) are governed to ensure the highest possible profits for its shareholders; how would “lowering the cost” ensure maximum profits for shareholders?
Some will say that “lowering the cost of insurance doesn’t necessarily mean in price, rather by adding services!” Sounds reasonable, but let’s examine that point. Many health care providers will be launching websites (if not already) that allow patients to login and see their prescriptions, request refills, even attempt their own ailment diagnosis. It may allow readily available access to information (which is always good); it also cuts out the middle man, the health care professional. This in turn saves the insurer money from doctor’s visits, telephone operators (there’s no need to call if it’s all online, right?) and a myriad of other minor costs; but once all added up over millions of people will amount to a whole lot of savings on the insurer’s behalf. Again, it cuts the costs of the insurers, but not the cost to the consumers.
I may be cynic when it comes to the insurance industry, but they’ve given absolutely no reason not to be. Denying coverage to those who need it the most would seem to be the most inhuman, vile act imaginable; but it’s all in the name of the game … profit.
Comment by Michael Jones on August 6th, 2008 @ 8:41 pm