Delay, Diminish, Deny and Blame: What the NHS can learn from American health corporations

“I once tried to explain to a Norwegian woman why it was so hard for me to find health insurance. I'd had breast cancer, I told her, and she looked at me blankly. "But then you really need insurance, right?" Of course, and that's why I couldn't have it.”
Barbara Ehrenreich, journalist and author

One of the arguments that frequently surfaces on here is that an insurance based healthcare system would be more efficient and customer responsive than our state funded NHS. Now we don’t believe that the NHS is perfect, or that it cannot be improved. However collectively we don’t see much future in market based solutions to the NHS.

Indeed we tend collectively to see market based solutions as anathema to a well functioning health service here in UK, and in other parts of the world. And despite the protestations of DK, Tim Worstall and the redoubtable and persistent 'Anonymous', we are still convinced that healthcare is not just another product in a market to be sold. Or at least if it is a product, it is a product that should, at least in basic form, be available to anyone on the basis that they are ill and suffering, not their ability to pay or their moral worth. To us the 100 million Americans with too little cover and from these the 47 million with no cover at all represent a moral outrage. They also seem daft in a healthcare system that spends such huge sums of money. (15% of the huge US GDP)

Fundamentally medical care is expensive (highly trained staff, many of them, lots of technology, lots of capital equipment, drugs, devices etc). The money for it has to come from somewhere and the options are:-
1. From general taxation
2. From user charges
3. From insurance cover
4. Some mixture of the above.

Of all these we tend to support Julian Tudor-Hart’s contention that the pooled risk across a whole society via general taxation funding is the fairest system.

We also contend that the old NHS which kept its transaction costs to the absolute minimum was cleaner, cared more about the patients, more effective, and had greater staff loyalty than the current michmash of policies will ever generate. The current reforms to us seem to increase transaction costs, generate ever more need for management, but not alter the fundamental interactions of patients, nurses, GPs and specialists. Indeed we have said on here that if all the managers were sent off to Mars we’d not miss them.

Some evidence from America supports our fears about insurance based systems and in this piece we want to display some highlights, and link you through to the original report.

(Seumas Milne picks up a similar theme in The Guardian)

In USA the provision of health insurance is a large and profitable business. Even so called “non-profits” have large “reserves” of income over expenditure.

Now as any business knows to make profits you need to get more income in than you pay out. So regular premium income in is good. High risk clients (those likely to claim) are bad. Paying out is bad for business, and should be as little and as late as possible. You mustn’t do this too obviously or people will start complaining that “We’re not getting what we pay for.”

It seems that in USA the patients are not getting what they have paid for. As a piece of consumer feedback this report is devastating for US health insurance companies. They seem to be an example of unfair trade, of taking money for not providing a service. We should consider this report very carefully indeed before letting them have any influence in UK health provision. The USA should consider carefully how much longer it will let them provide US health care.

Anyway here are some great slogans that advertise health care companies. “Over 195 years of wisdom” (Almost as long as Hippocrates) “Nothing is more important to us than the ability to be there when our customers need us following a disabling accident or illness” A friend of mine at university ran for office on the platform of “SLOGANS, not solutions” He did very well on it. But fortunately he was only wanting to run Hikesoc.

Here are some key quotes from the report

“Because of the conflict of interest between health insurance company profits and
necessary health care for all, millions of people in the US do not receive necessary health care and disability benefits, and suffer significant negative consequences”

“Built into institutionalized blame is the assumption that the basis for the health or disability claim is a mental condition, or a personal defect of the individual. One of our interviewees stated, “You are guilty until proven innocent”.

Over half of the twenty people interviewed in our study described feelings of personal
responsibility for their condition or were told by doctors, nurses, or claims managers that the problem was their own fault.”

(Such questions may arise in UK NHS, but don’t stop people from getting treated)

“As mentioned above, we uncovered psychological patterns of accusation and suggestion of fraud as well as blame placed on individuals for their own health and disability problems. Inducing self doubt and frustration into a claimant’s life is a way of psychologically encouraging a patient to terminate the pursuit of rightful benefits. Some of our participants suffered from severe disabilities and spent years fighting their insurance companies for benefits. The average time spent per week in trying to get benefits among our twenty interviewees was 6.5 hours, which included waiting on hold, call transfers to multiple representatives, travel to insurance company
doctors, gathering medical records, and filling out paperwork.”

(How much time and money is being wasted here in endless checking? Are the US people so dishonest and fraudulent that they deserve this level of checking? Or would the patients and doctors do better without the transaction costs this bureaucracy generates?)

“A 2003 study in the New England Journal of Medicine estimates that spending for the administrative costs associated with health care amount to over $320 billion per year, or about thirty-one percent of overall health care costs in the US.”

(To us this spending this percentage of health care dollars on administration must be a waste of money that could have better been spent on getting on with treatment. To the UK Department of Health McKinsey et al are becoming all the rage. Encephalitis bureaucratorum as we doctors know it. They set up great systems…for getting money from taxpayers into their accounts)

“In some cases, the claims process lasted years. One person reported seeing twenty-one different doctors during the course of the claim.”

(This has to be squandering patient and doctor time.)

“Delays by the insurance industry were the most prevalent practice reported by our interviewees. All of the participants interviewed experienced numerous delays including long waits between correspondences, unreturned phone calls, and asked repeatedly to communicate all the details of their case to insurance company representatives.”


(In UK at least we try to treat first.)

“The [disability company] closed my claim while I was going through surgery for
lack of medical documentation. This delay has cost me dearly. The process of
making contact with the [disability company] was a severe hardship during my
chemotherapy and [continues] until this day.”

(UK cancer patients mostly don’t have this worry. They may however have a struggle to get the chemotherapy their doctor recommends. Looks like in USA they may have a similar problem, just at a different point in system)

“Another method of delayed treatment that many of our interviewees experienced was the request for excessive information. People who are disabled are also attending doctor’s visits, taking medication, and trying to survive daily life. Companies demanded that claimants attend multiple doctors’ visits and submit all copies of their medical records. Additionally, interviewees reported that companies requested financial and employment information and would speak to friends, colleagues, and employers; gathering information that was sometimes completely unrelated to
their claims. Interviewees stated that insurance companies requested copies of the same records multiple times.”

(Just like the UK, except that here the bureaucrats work for the government rather than a private company!)

“In 2001 1.458 million American families filed for bankruptcy…About half cited
medical causes, which indicates that 1.9–2.2 million Americans (filers plus
dependents) experienced medical bankruptcy annually. Among those whose
illnesses led to bankruptcy, out-of-pocket costs averaged $11,854 since the start
of illness; 75.7 percent had insurance at the onset of illness. Medical debtors
were 42 percent more likely than other debtors to experience lapses in coverage.
Even middle-class insured families often fall prey to financial catastrophe when
sick.” (Health Affairs, 2005)

(The NHS doesn’t do this to anyone. For all its flaws, there in no-one in UK going bankrupt to pay off medical bills)

“People in the US have a choice. They can continue with the profit-driven private insurance health care system leaving many millions to languish without care, and many millions more to face the frustrations of systematic delays, diminishment, and denials of promised benefits. Alternatively, they can build a common pool health care system that provides necessary health care to everyone– for less than we are paying now”

(The UK and rest of Europe made this choice after WW2. Paying for bureaucracy whilst getting little is rank bad business, and one of the reasons why team Rant is so sceptical about the current UK NHS reforms.)

“Each person interviewed for this study had insurance at the onset of his or her malady. They paid monthly premiums through employer sponsored plans or had purchased individual/family policies directly from insurance companies. The people in this study believed they would receive the benefits they were promised in the event of an accident, disease, or illness. The management practices of the health or disability insurance company delayed, diminished, and denied payment for expected benefits.”


(Buyer regret and customer disappointment. Not a good way of doing business.)

“Each processor is ordered to deny a set dollar amount of claims each month and if the target was not achieved, they lost their jobs.” (personal communication, February 2007)
(It’s a deliberate tactic by the insurance companies to deny benefit to some claimants)

This report from Sonoma State University California shows that US health corporations are far from being a good way to finance health care. The incentives to private companies (profits) mitigate against paying out when needed. The strategies of blame, delay, diminish and deny all work against the interests of insured patients.

The NHS in UK has many faults, but at least we cover the whole population most of the time.

Well at least we used to. Sadly the move of dentistry to the private sector, and the debacle of C Difficile in Kent may be the tipping points where the British start to abandon our collective loyalty to the NHS.

There must be a better way of organising health care than either the NHS (with its excessive bureaucracy, long waiting times, and monolithic response to change) or USA health insurance (with its excessive bureaucracy). Have the continentals discovered it?