They Know What’s in Your Medicine Cabinet
by Chad Terhune
BusinessWeek
July 23,2008
That prescription you just picked up at the drugstore could hurt your chances of getting health insurance.
An untold number of people have been rejected for medical coverage for a reason they never could have guessed: Insurance companies are using huge, commercially available prescription databases to screen out applicants based on their drug purchases.
Most consumers and even many insurance agents are unaware that Humana, UnitedHealth Group , Aetna (AET), Blue Cross plans, and other insurance giants have ready access to applicants’ prescription histories.
An investigation last year by the Federal Trade Commission found that the two companies supplying these pharmacy profiles—MedPoint and IntelliScript—violated federal law for years by keeping the system hidden from consumers. But the FTC has merely required disclosure if prescription information causes denial of coverage or some other adverse action; the agency imposed no penalties.
MedPoint and IntelliScript buy the data they disseminate mostly from another group of middleman companies known as pharmacy-benefit managers (PBMs). Large PBMs, such as Medco Health Solutions, provide services to insurers and employers. In playing that role, the PBMs gain broad access to prescription information from drugstores.
http://www.businessweek.com/print/magazine/content/08_31/b4094000643943.htm
MedPoint and IntelliScript represent the type of administrative services that the private insurance industry is selling us. These services are not for the purpose of assisting individuals in gaining access to the health care that they need. These services are for the purpose of allowing the insurance industry to exclude from their plans anyone who might actually need health care. And we’re paying more in administrative costs to defeat this risk pooling function of insurance.
Some say that all we have to do is to increase regulatory oversight of this industry in order to use private insurance as the framework of comprehensive reform. The problem with this reasoning is that business model of private insurers in the United States has nothing in common with the model of private insurers used in some other nations with comprehensive systems. Other nations use private plans to bring everyone in under the umbrella of insurance coverage. We use private plans to keep premiums affordable while shoving those who need health care out into the storm to either fend on their own or to be picked up by taxpayer-financed safety net programs.
We will not achieve our goal of universal health care merely by increasing regulatory oversight of the insurers. We will have to totally transform the private insurance industry from a “successful” business model where success is measured by not paying for health care that people need, to a public service model where success is measured by seeing that all of us get the care we need.
Rather than disassembling these companies and rebuilding them as new private insurance entities within a social insurance system, it would be far easier, more efficient, more equitable and less expensive to dismiss them and replace them with our own publicly-financed and publicly-administered program.
If we leave them in place and merely increase regulation, their business model will dictate that they must introduce yet more innovations that circumvent regulation for the purpose of enhancing their business outcomes while shifting more of the responsibility of financing health care to the taxpayers. We can’t afford it any more. We need an efficient system that actually gets people the health care that they need.
