Do Anti -Torture Arguments Apply To Some Utilization Review Decisions?

In a previous post on psychiatry and torture, I pointed out the American Psychiatric Association's official position paper on torture.  It states unequivocally that psychiatrists should not be involved in  torture and describes the premises for that argument.  As any reader of this blog knows, I have described the impact of managed care on psychiatry including the fact that managed care has had a disproportionate effect on the field probably because of widespread biases against psychiatry, psychiatrists, and patients with psychiatric disorders and addictions.  Some would cite the subjective nature of the field, but the abuses I have seen occur in areas where  there is limited subjectivity such as inpatient and treatment settings where there are unequivocal and severe disorders.  Obvious examples would be people with psychotic disorders who are engaged in unsafe activities due to delusions and/or hallucinations or a person compulsively drinking 1.75 liters of vodka per day despite having numerous auto accidents and nearly freezing to death because of intoxication.  Every psychiatrist I know is aware of cases where these people have been denied care by an insurance company based on an arbitrary decision made by a remote reviewer who has no responsibility to the patient in question.  Although many of these patients are oblivious to their plight and would be content to proceed with no treatment, many are highly distressed.  They are distressed because they know that proceeding with no treatment places them at risk on several fronts and the basic act of being denied coverage causes them a great deal of distress.

That lead me to the thought: "Is this distress the equivalent of torture?"  As always that depends on the definition.  Post 911, the United States has used various definitions of torture including some that rationalize actual physical blows to a person as not constituting torture.  Timelines of various Department of Justice memos with these interpretations are available and I will not get into them here.   There are obvious problems with not calling a coercive beating torture.  A more widely accepted definition is available from the United Nations:

1:  For the purposes of this Convention, torture means any act by which severe pain or suffering, whether physical or mental, is intentionally inflicted on a person for such purposes as obtaining from him or a third person information or a confession, punishing him for an act he or a third person has committed or is suspected of having committed, or intimidating or coercing him or a third person, or for any reason based on discrimination of any kind, when such pain or suffering is inflicted by or at the instigation of or with the consent or acquiescence of a public official or other person acting in an official capacity. It does not include pain or suffering arising only from, inherent in or incidental to lawful sanctions.

In this case, torture is defined as potentially mental suffering with no physical component.  Since the UN is dealing with torture inflicted by states there is the expected implication of states in the process and the cases of lawful imposition of pain and suffering inflicted by states.  The definition is also limited to obtaining information that a person wants to keep undisclosed or coercing them to do something they do not want to do.  A more general dictionary definition from Webster's would be:

To afflict with severe pain of body or mind.

Part of the convenience to businesses denying psychiatric care is the stereotype that these are just minor medical conditions, that treatment is elective, or that treatment does not meet some arbitrary business criteria like "failing outpatient treatment first" or "we don't do medical detox in a hospital".  The pain involved with mental illness is an abstract concept to anyone who has not experienced it or who has not be involved in trying to treat it.  I don't think it has been studied.  You won't see anyone asking the question:

How painful was it to learn that your insurance company would not fund for the treatment of your mental illness or substance abuse problem and realize that you would be losing your home, spouse, children, job, etc?

Professionals treating the patients in question also avoid the issue of psychic pain.  It can be more easily dealt with as the expected anxiety or depression of an adjustment disorder rather than unnecessary suffering inflicted by a third party.  Some professionals will address it as grief from the expected losses.  But most often it is just glossed over as business as usual. The legal system has already indemnified managed care systems from any liability for decisions that lead to injury removing them further from the consciousness of patients, their families and the providers in question.  The physicians involved are conflicted - they know they are powerless given the legal landscape and further they don't want to make any waves with the companies who might be paying them.  We have culturally removed one of the most toxic factors in our health care system - the denial of care from consideration.

Like all psychiatrists, I have had to pick up the pieces when the proposed treatment plan is denied and all of the secondary problems come into play.  Suddenly I am talking with a person who not only has a severe psychiatric problem and/or addiction, but they are now homeless or without a job or a family.  It is the worst care scenario from the perspective of comprehensive care and it is up to me and my colleagues to piece together a suboptimal plan.   The outcomes of those suboptimal plans are rarely very good.  The best that I usually hope for is that they can be safe for a long enough period of time to find other resources to deal with their chronic mental illness or addiction.  In some cases the expected worst case scenario occurs and if the patient is lucky they are readmitted and there is another chance to try to obtain funding from their managed care company.  There is a good chance the proposed plan will be refused again.

At what point is the human suffering involved in this sequence of events recognized?  At what point does a change in the system need to occur.  Steven Sharfstein, MD made this decision when he was the President of the APA and he banned the participation of psychiatrists in any step of the interrogations occurring in the mid 1990s to this date.  Is that a step that psychiatry should consider in managed care settings?  Should we eliminate psychiatrists from sitting in a remote office and reading notes about the care of one of these severely ill patients and making a decision that favors the insurance company that they work for?  Psychiatric professional societies have adapted to the cultural blindness of the culpability of insurance companies when they legitimize medical decisions by making sure that some psychiatrists are in these reviewer positions.  I guess  the thinking was that they could suspend their loyalty to their employer to make decisions in the best interests of patients and the profession.  History has clearly showed that things don't work that way.  I have had some reviewers tell me that their decisions were based on a set number of days irrespective of anything I would tell them about illness severity or complications.

I can understand the obvious counterargument to my position that the denial of care is a form of torture.  It can be argued that the patient is not a passive player and that they have a "choice" about whether they continue to have severe symptoms, continue to use drugs and alcohol, or continue to harm themselves.  The idea that all of these problems are based on conscious voluntary choices remains an unrealistic business approach to mental illnesses and addictions and not reality.  There is also the business as usual argument.  That is - this is the way we have done things for the past 30 years with the help of politicians even though it does not contain costs and it provides poor quality care.  It that really enough justification for creating more stress on already distressed patients?

At what point do we all acknowledge that denied psychiatric care results in more mental pain and suffering and takes psychiatrists out of decisions that are in their patients best interest?


George Dawson, MD, DFAPA




Graphics Credit:

Graphic is downloaded from Shutterstock per their standard agreement.  It is entitled "Depressed man in a tunnel" by the artist hikron.

Holding Tank Or Psychiatric Unit?

In the event that it is not obvious, the bulk of my career was spent as an acute care psychiatrist.  I staffed inpatient psychiatric units for about 22 years in one of the most acute care facilities in the largest Metro area in the state of Minnesota. That meant that most psychiatric emergencies, especially those involving aggressive behavior were generally brought to this facility and I was one of a handful of inpatient psychiatrists who would be seeing that person. In order to do that work even reasonably well there has to be a reasonable environment. I am an expert in that environment and this post is about how that environment deteriorated as a direct result of government and business intervention that was designed to turn healthcare over to the business community and out of the influence of physicians.

Before I get into those details, let me describe my current perspective on inpatient psychiatric care from the vantage point of an outpatient psychiatrist.  In October of this year, I will have been working in an outpatient setting for a total of 10 years. I have seen hundreds of people who were detained or admitted to inpatient psychiatric units over that period of time. I always ask them what their care was like and the reviews are never positive.  The most common term that I hear as a description is that it was a "holding tank."  They describe incredible boredom, very brief contacts with staff, and the role of the psychiatrist as asking them if they were suicidal or not. Many of them knew they could adopt a game strategy: "I knew if I said I was not suicidal they would let me go and they did." They often tell me that arbitrary medication changes were made to medications they may have been taking for a number of years. Their psychiatrist or physician was rarely contacted. Follow up in these circumstances is not very good.  They discharge prescriptions were rarely filled and often they did not get an explanation for the medication changes.

My experience trying to get care for people who need inpatient care has been equally unsatisfactory.  I have been overruled by non-physicians working in emergency departments when I referred people in who needed acute care.  There is nobody in the world or the history of the world who knows more about who needs inpatient care than me. I have been unable to refer people for electroconvulsive therapy with severe depression and suicidal thoughts, even directly to the hospital where I used to work. I have been sent severely ill and unstable people to take care of in an outpatient setting - who should have been treated on an inpatient unit.  That level of care in unacceptable to me both as a professional who knows the field and as a family member who wants anyone with mental illness in my family to get the same care and resources as somebody who goes to the emergency department with chest pain.  They currently do not.

How did inpatient psychiatric care fall to such abysmal depths?  Basically by stealing the decision making ability from the physicians who were trained to make the decisions. The decisions I am talking about include treating the patient in a particular setting, the treatments and specific medications offered, and what their overall treatment trajectory would be. Beginning in the 1990s it was possible for an insurance company to deny treatment based on whatever basis they decided and sustain no liability for a wrong decision.  At that time a physician employee or contractor could just call the hospital, have a cursory discussion with the attending physician, and deny care. To illustrate how that works here is one of my typical conversations with one of these "utilization reviewers" from that time. The conversation refers to no specific case but represents an amalgam of these reviewer conversations:

Utilization Reviewer (UR):  "Hello I am Dr. X calling to review the care of Mr. Patient Y.  Why is he on your inpatient unit?"
Me: "He has longstanding depression and for the past two months has been drinking a fifth of vodka per day.  On the day he came in his wife found him sitting at their kitchen table with a loaded firearm saying he was going to kill himself.  He is currently being detoxified and treated for depression."
UR: "He needs to be sent to detox."
Me: "The county detox unit is a social detox with no medical coverage and they refuse to take anyone with suicidal ideation or behavior."
UR: "He needs to be sent to detox".
Me: "Did you just hear what I said?"
UR: "Is he suicidal RIGHT NOW?"
Me: "He has been under my care for less than 24 hours and at this time is at extremely high risk for immediate relapse and high risk for recurrent suicidal behavior. He needs stabilization."
UR: "But is he suicidal RIGHT NOW?"
Me:  "I don't understand what you mean. He has no access to a firearm right now. He is in a hospital."
UR: "Then we are done here. We are not going to cover the hospitalization."

Having many conversations like the one above over the years set the tone for the demise of inpatient care. At one point it was easier to recruit psychiatrists to be utilization reviewers because it was an easier job with no liability and predictable hours compared to psychiatrists trying to actually provide the care.  This process remains one of the greatest unspoken conspiracies in the history of American healthcare and it is the reason for the red transition arrow in the above graphic. It is also the reason why we began incarcerating people with severe mental illness rather than treating them.  It is how county jails are now opening jail facilities that they are calling mental health units. It "saves" any insurance company that adopts these polices a significant amount of money and puts all of the people who should be treated in a safe and supportive environment at risk for that profit to the company.

Holding tank is a term, that has come full circle.  We owe it all to the managed care  industry.


George Dawson, MD, DFAPA

Shut Down The Psychiatric Gulags - Don't Build More!

On my drive home from work yesterday, I heard an outrageous story about a judge ordering LA County jail to build 3,200 psychiatric beds to treat mentally ill inmates in that facility.  As is typical of MPR, I could not find the link today but I did find the link to this LA Weekly story , that basically brings people up to speed.  It is a typical journalistic approach with the human interest component.  In this case the human interest portion was interesting to me, because I have heard these stories hundreds of times from people I have treated who have been incarcerated with a few variations.  The most significant variations have to do with suffering acute alcohol or drug withdrawal and not being assessed or treated for that problem and not having access to maintenance medications that have proven effective for the specific mental illness.  The current plight of the mentally ill in the LA County jail system and increasing judicial pressure on the basis of rights violations for the lack of treatment led county supervisors to vote to build what was called the most expensive building project in county history.  From the article:

"That day, county supervisors ........ voted to spend nearly $2 billion on a long-sought jail to replace notorious Men's Central, a facility that federal investigators say is plagued by suicides, abusive conditions and violence. The funds will build a two-tower compound given the ungainly name "Consolidated Correctional Treatment Facility."

According to the article it will be a 4,860 bed facility,  3,260 (67%) beds of which will be dedicated to treating prisoners with mental illness.  My most recent post on the matter includes information that LA County jail has 19,386 inmates and that recent epidemiological surveys suggest that 30-45% of inmates have problems due to severe mental illness and impaired functional capacity.   That suggests that unless public policy changes, the most expensive building project in LA County could be overwhelmed by demand before it gets started.  The author in this case points out the folly of building this tower.  It is basically the folly of building any large psychiatric facility in the absence of any other infrastructure, but in this case compounded by the fact that this is in fact a jail and not a treatment facility.  There is really no evidence that the problematic aggressive or suicidal behavior will be any better in a new "two-tower compound" with the same jail atmosphere and mentality.

I have previously posted about the plight of the mentally ill being incarcerated in America and the fact that county jails are currently our largest mental institutions.  It is a basic collusion between governments at all levels and the business community to enrich corporations that have been set up to "manage" the American healthcare system.  As usual, the most vulnerable people are "cost shifted" out.  Cost shifting refers to cost center accounting that basically leads divisions within the same organization to try to save money on their budget by shifting the costs to somebody else.  In managed care systems it can lead to all kinds of distortions in care.  It also happens with outside agencies.  I was told about a situation where workers in one county actually dragged an  intoxicated patient over the county line and into another county so that patient would no longer be their  financial responsibility!  Cost shifting is the end result of these perverse incentives.

There is perhaps no better example than incarceration rather than hospitalization.  There are estimates as recent as from a few days ago that treatment and possible hospitalization may cost $20,000/year as opposed to incarceration costing $60,000/year.  In both cases the taxpayers pick up most of the tab.  The cost shifting has occurred from insurance companies and health care systems to the correctional system.  If an insurance company can dump a patient with a severe mental illness into jail, it doesn't cost them a thing.   If that same patient is hospitalized they may receive a one-time DRG (Diagnosis Related Group) payment of about $5,000 irrespective of how long the patient stays.  The hospital incentive is to get them out in 5 days whether they are stable or not to maximize profit.  When they are discharged, the patients are generally expected to go to appointments to discuss their medications.  Clinic profits on these visits are minimal but the main problem is that many of these appointments are missed - in some cases up to 50-60%.  Many of these patients lack stable housing and they frequently end up back in the emergency department and back in the hospital.  Hospitals now have bottlenecks in the emergency department and many people are discharged back to the street.  The cycle of ineffective care continues.

I can attempt a brief analysis of the problem as I watched it unfold during 23 years of inpatient practice.  I will demonstrate how things have changed to the detriment of patients with severe mental illness.  Consider the hypothetical case of Mr. A.  He has diagnoses of depression, schizophrenia and alcohol dependence.   He recently ran out of his usual medications and started drinking.  He became progressively depressed and stopped talking with his family members.  They went over to see him and noticed he has a loaded handgun on his table and was talking about shooting himself.   They called the police who came, confiscated his handgun, noted that he was acutely intoxicated and sent him to the local hospital emergency department.  How has the management of this scenario changed over the past 30 years and why?

In the early 1980s, Mr. A would have been assessed as a person who was high risk for ongoing suicidal behavior (depression, schizophrenia, alcoholism and acute intoxication) and admitted to a psychiatric unit.  The psychiatrist there would have done everything possible to stabilize all three conditions even if it meant civil commitment to a long term care institution.  The length of stay (LOS) would have been on the order of 20-30 days comparable to many current psychiatric LOS in the European Union.

By the late 1980s, a managed care company would have called the hospital or psychiatrist in charge.  They would initially demanded that the patient be discharged to a county detox facility.  They would claim that alcohol withdrawal detoxification was not a psychiatric problem, and therefore the patient does not meet their "medical necessity criteria" for inpatient hospitalization.  If that was ineffective they might say that he was no longer "acutely suicidal" or "imminently dangerous" two additional medical necessity criteria.  In the end they always win, because they just stop paying and the administrators force the clinicians to discharge the patient.  The length of stay is now down to less than 1 week and the patient may not be stable at all at the time of discharge.

By the 1990s, the patient might not even make it to the inpatient unit.  By now psychiatric departments are continuously burned by managed care companies, especially in the case of any patient who is acutely intoxicated at the time of admission.  Many have closed their doors.  Many departments have strongly suggested that the emergency departments send any intoxicated patients directly to county detox units if they are available.  The counties respond by refusing to take any patients on any intoxicants than than alcohol and even then the patient has to blow a number on a breathalyzer consistent with acute alcohol intoxication.   At any point in this process a decision can be made to just send the patient home.  There are various ways the patient can access more firearms at that point or even get the original firearm that was confiscated.  There are also various ways that the patient can end up incarcerated including going back home, drinking and getting arrested for disorderly conduct or public intoxication.  A more complicated situation occurs if the patient is intoxicated and wanders into a neighbor's home or place of business.  I have seen people end up in jail for months on trespassing charges in these situations.   And that brings us in to the 2000s where it is much more likely that a person with severe mental illness will be incarcerated than even make it to the emergency department.  In the 2000s the patient may end up stranded in the emergency department for days or sent home with a bottle of benzodiazepines to handle their own detox if they can deny that the are "suicidal" consistently enough.  There is also the mater of inpatient bed capacity.  Fewer beds are full constantly because bed capacity has been shut down due to managed care rationing and people are often released because there will be no open beds in the foreseeable future.  The LOS in many cases is now zero days, even for people with severe problems.

How did all of this happen?  How did the care of mental illness and addictions fall to such a miserable standard?  It is documented in many posts on this blog.  Professional guidelines were compromised and treatment infrastructure was destroyed by the managed care industry and the politicians who actively supported and continue to support it.  Professional organizations don't stand a chance against pro business state statutes,  commissions stacked with industry insiders, and federal legislation that protects these companies from lawsuits for interference with care.  Even a travesty as basic as prior authorization for generic drugs is unassailable.  I don't understand why these basic facts are so incomprehensible to people in the field.  Just a few hours ago, 1BOM posted a Hall of Shame of entities the original authors claim are failing people with severe mental illness.  This list completely misses the mark and is probably a good example of how deeply entrenched the mechanisms are to prevent treatment  and shift costs away from states and health care companies.

There are countless easy solutions to the problems, but the companies in power literally do not want to spend a dime.  The patient with severe mental illness can receive comprehensive community services and be maintained in their own housing at a cost of $10, 000 to $20, 000/year for clinical services.  That same patient costs corrections departments $60,000 per year.  That patient currently costs managed care companies nothing if they can transfer their care to a local state-funded Assertive Community Treatment (ACT) team.  Managed care companies incur the same cost if the patient is transferred to the correctional system.  If ACOs come to fruition and all of the chronically mentally ill are enrolled, it should be an easy matter to make the managed care companies responsible for both the costs and the patient.  A simple court order to pick up the patient from jail and stabilize them in the community could suffice.

Erecting more gulags won't work.  They are effective only for enriching health care companies that profit by denying care for those with severe mental illnesses and addictions.  They are also another hidden health care tax on the taxpayers who are already paying far too much in hidden health care taxes.




George Dawson, MD, DFAPA

Graphics Credit:  ConceptDraw Pro - this graphic was included as an example with this software.

Can You Trust Your Physician?

I could not help but respond to the Psychiatric Times article with the same title that they e-mailed me this morning.  Trust in an interesting concept when you live in a country that is politically managed for laissez faire capitalism and the only protection that the average citizen has against various cartels is caveat emptor.  The vocal irrational biases against psychiatry should discourage blind trust of psychiatrists even further.  Early in my career, I stayed away from any interpretive approaches to a lack of trust and took a simple cognitive behavioral therapy (CBT) approach.  That goes something like this: "I don't think there is any basis for you to trust me or not trust me.  I would encourage skepticism and taking a look at what I actually do for you.  If you find the recommendations, discussions and treatments that I recommend are useful, that is more clearcut evidence that I might be helpful to you.  If not, certainly let me know and we will figure out what to do  about it".  Many of the people I have worked with over the years who had "trust issues" have found that to be a useful approach.

In reading the article, I find out that it is about the legal requirements involved in informing women about abortion. specifically the fact that in some states physicians are now required to tell women that a fetus will feel pain as it is aborted.  Additional states require women to pay for an ultrasound evaluation and view the fetal image before the abortion, advise women that abortion leads to an increase in breast cancer, and refer women for counseling after advising them that an abortion places them at risk for adverse mental health consequences.  The authors cite the scientific evidence to the contrary in all cases.  Can you trust a physician who is reciting abortion law boilerplate when they are advising you about that procedure?  Probably as much as you can trust a physician doing a safety assessment in a situation where they are prohibited by state law from discussing firearms that the patient may have at home.

 I don't think anyone should be surprised about the lack of science involved when politicians decide to manipulate physicians to do their bidding.  I currently live in one of the most liberal states in the United States and every year I get a letter informing me of the number of abortions performed every year and reminding me of my obligation to report if I perform an abortion.  It is a state law that all physicians receive this letter, even if they are psychiatrists who don't do any surgical procedures.  The intent of the letter is to clearly intimidate physicians into not performing abortions.

To quote the downside from the authors:  "These politically motivated laws undermine the concept that medical decision-making is based on scientific evidence. They force physicians to act as agents of the state government rather than put their patients’ interests first. They are intended to intimidate women so that they will not have abortions. They are corrosive to honesty in the physician-patient relationship, interfere with the physician’s responsibility to the patient, and violate medical ethical principles."

I think that any reasonable physician would agree.  I have been pointing out for decades that physicians have been agents of the state for a long time.  Colluding with managed care and all of its governmental variations is a clear example.  The entire managed care manual on when to discharge people from hospitals and how to do that has nothing to do with science.  The entire concept that all medications in the same drug class are equivalent has nothing to do with science.  Practically all of the rationing that occurs by the government and managed care companies has nothing to do with science.  But it doesn't stop there.  All state statutes having to do with the duty to warn have nothing to do with science and more to do with where the deep pockets are located.  In the original case precedent the perpetrator was detained and interviewed by the police and released before the homicide.  It was a clear example of the failure of the police to protect the victim and yet that was spun into the responsibility of clinicians to warn potential victims.  How much legislation is out there to create work for trial attorneys?

I was at a conference a few years ago where hospice care was being discussed as the latest innovation in hospital care.  When I thought about how people are assessed and discharged from acute care hospitals my question seemed obvious:  "Since there are care managers forcing discharges, isn't there a potential conflict of interest if hospice care is seen as the fastest way to discharge somebody from a hospital?"  The result was dead silence, a moment of confusion ("He really didn't ask that question did he?"), and then I was ultimately ignored as the speaker moved on.  With all of the focus on what are really trivial conflicts of interest in psychiatry, think about that for a moment.  A care manager representing the business interests of the hospital, the MCO/ACO, and the political interests of the politicians interfering with the practice of medicine has options available to them with the potential to short circuit care and provide less intensive care than might be recommended by a physician.

I was in a clinic recently where I was given an impressively long list of exceptions to patient privacy.  I picked up one of my electrical engineering journals the other day and was warned about how the Internet of Things (IOT) will be collecting all sorts of data on the average citizen, but that the owners of the data (Google, Facebook, etc), hope that the average citizen will see the worth in all of this information being in their hands.

Turning over all of this information and power over to the political and business classes is an obvious mistake.  Eliminating what has been described as a mandarin class - the physicians is another.  Unfortunately physicians and their professional organizations are completely inept at dealing with this problem and we are left with these inappropriate political intrusions and physicians acting like agents of the state and business cartels.

That means that politicians will not only try to manipulate who is born based on their ideology, but more importantly who has access to medical care and the level of intensity and who dies.  It is happening right now and it should be a lot scarier than a fictional robot time-traveling back from the future.

Remember the CBT approach to your physician, your health plan and your insurance company and make sure they are doing what you want them to do and not what some politician or business manager wants them to do.

George Dawson, MD, DFAPA

The New York Times Editorial Board on Parity

The New York Times Editorial Board came out with a comment on mental health parity entitled Equal Coverage for the Mentally Ill.  Like most sources with no knowledge of how mental health treatment works in this country - their outlook was very rosy.  I am  sure that is what the authors of the original bill - the late Senator Paul Wellstone and Senator Pete Domenici were hoping for.  Let me tell you why that is not going to happen.  As I followed the link to who is actually on the Editorial Board it is probably significant that there is nobody with health care expertise.  Even if there was the national press has a naive approach to health care and seems to present a distinctly politicized and business friendly viewpoint.  I would generally characterize that as a view that is very short on quality and long on cost effectiveness rhetoric.  The press seems to uncritically accept that "high quality cost effective" health care is the goal of businesses and governments.  Nothing could be farther from the truth.

The actual Rule that was published yesterday is a 205 page document.  It is written in a style that defies comprehension by anyone who is not a Congressional insider or an attorney.  Despite being highly acclaimed by a number of organizations including the American Psychiatric Association (APA) there is a surprising lack of details in why this is some sort of advance.  I go into this with thirty years of experience battling managed care in its various forms and needless to say I am no friend to that approach.  I know that the real goal is for managed care companies to make money and they make money by denying care and providing low quality care.  I also know that governments at all levels are very friendly to the managed care cartel and have bought their theology.  Practically all health care legislation is managed care friendly and the PPACA (Obamacare) facilitates super managed care organizations called Accountable Care Organizations.  With that backdrop and realizing that like most other people, I lack the legal qualifications to read this document, here are a few of my impressions:

1.  Medical necessity - there are 44 references to medical necessity in the document.  There is some concern about transparency.  It is quite easy for a managed care company to tell a person or their physician, pharmacy, or hospital that they are not covering a service because it is not "medically necessary."  This generally means that the company can employ doctors who can arbitrarily deny services.  In Minnesota in the 1990s, several psychiatrists were concerned that these companies were discharging people from hospitals prematurely and they insisted on seeing the actual criteria for these decisions.  They were advised that they were "proprietary" and not available.  The new Rule seems to demand adequate disclosure of these criteria.  Even if it did, the disclosure of this information is irrelevant.  In fact, there are criteria in use right now that are essentially made up on financial information and they have nothing to do with psychiatric treatment.  Unless there is an actual appeal process to a neutral party who has the power to overturn these decisions, managed care companies will continue to do whatever they want.

2.  Utilization review - there is one reference to utilization review (UR), a managed care tactic that is basically designed to harass physicians into discharging patients from a hospital based on the financial demands of the managed care company.  An example would be serial calls to a physician treating a patient with suicidal ideation.  The attending physician who sees the patient every day is concerned that the patient has a significant suicide risk and wants to continue to treat them on an inpatient basis.  The reviewer who is an employee of the managed care company, is sitting in a room several states away, and has never seen the patient and has no professional responsibility to them decides the patient is not at high risk and that they should be discharged from the hospital.  This leads to a series of unproductive conversations and forces the physician working with the patient to call him every day to justify keeping the patient in the hospital.  In many ways dealing with this process is like dealing with a bill collector.  The only difference is that you are paying a penalty for doing  your work and being responsible to a patient.

The rule seems to suggest that the amount of UR done is not a problem as long as it is equally applied across both mental health and general medical surgical services.  There are major problems with that idea.  The first is a decade long initiative by the managed care industry to internalize utilization review by case managers.  They claim these case managers are part of some kind of imaginary patient care team.   In fact they are there applying business standards to force physicians to discharge patients.  The second problem is that UR is completely unnecessary.  Managed care companies have huge financial leverage.  They reimburse a set amount per admission/discharge diagnosis that is a discounted rate.  The only conceivable uses for UR today are to pressure inpatient physicians and to create an incentive through internal UR to increase profits by managing discounted rates.  That happens when a hospital receives a fixed payment for what is probably a 5 day hospitalization and they now have UR by case managers to get physicians to discharge these patients in 3 days instead of 5.  There is no major psychiatric condition requiring hospitalization that  responds to three days of treatment.

3.  Small employer exemption - the Mental Health Parity And Addiction Equity Act (MHPAEA) does not apply to small employers:

 "MHPAEA and the regulations under it do not apply to employers with 50 or fewer employees (although, separately, the EHB regulations adopt MHPAEA)."   

According to the Census that eliminates about 34 million people or about the same number of uninsured that the PPACA purports to cover for the first time.  It also defeats the concept of parity.  But it turns out there are a lot of exceptions.  So who knows the total number of people who will be not even be covered:

"MHPAEA requirements do not apply to:

• Non-Federal governmental plans that have 100 or fewer  employees;
• Small private employers who have 50 or fewer employees;
• Large group health plans that are exempt from MHPAEA based on their increased cost.  Large group health plan sponsors that make changes to comply with MHPAEA and incur an increased cost of at least two percent in the first year that MHPAEA applies to the plan (the first plan year beginning after October 3, 2009) or at least one percent in any subsequent plan year (generally, plan years beginning after October 3, 2010) may apply for an exemption from MHPAEA based on their increased cost. If such a cost is incurred, the plan is exempt from MHPAEA requirements for the plan year following the year the cost was incurred. Subsequently, the plan sponsors must notify the plan beneficiaries that MHPAEA does not apply to their coverage.  These exemptions last one year. After that, the plan is required to comply again; however, if the plan incurs an increased cost of at least one percent in that plan year, the plan could claim the exemption for the following plan year. The following set of FAQ’s provide additional information related to the application of MHPAEA. In particular, see Q. 11 for a discussion of the processes by which plans may claim a cost exemptionhttp://cms.gov/cciio/resources/factsheets/aca_implementation_faqs5.html); and
• Self-funded non-Federal governmental employers that opt-out of the requirements of MHPAEA.  Non-Federal governmental employers that provide self-funded group health plan coverage to their employees (coverage that is not provided through an insurer) may elect to exempt their plan (opt-out) from the requirements of MHPAEA by following the Procedures & Requirements for HIPAA Exemption Election posted on the Self-Funded Non-Federal Governmental Plans webpage (Seehttp://cms.gov/cciio/resources/files/hipaa_exemption_election_instructions_04072011.html), then issuing a notice of opt-out to enrollees at the time of enrollment and on an annual basis. Thereafter, the employer must also file the opt-out notification with CMS"

4.  This bill will have no impact on gun violence.  You can't assess and treat potentially violent and aggressive people in a rationed, low quality system of care that is run by case managers bent on getting people out of the hospital.  There are many better suggestions on this blog but they require a system of quality care and professionalism.

5.  The bill will not save any money.  It should be painfully apparent that delegating the management of health care in the United States to a profit motivated middleman is a recipe for health care inflation.  That point is routinely lost on politicians and journalists.  The other point that these folks never seem to get is that managed care companies have in many cases acquired the means of production that they had sought to control.  This creates an additional conflict of interest.  If you now own all of the MRI scanners, you have an interest in seeing them run 24/7 especially when they might be covering a significant part of your hospital costs.  That might explain what an MRI of the C-spine is $1,500 in the US and $150 in Japan.

6.  The rule is doomed if the Editorial Board is serious about it depending on enforcement by state insurance commissioners.  The members of the Board must not have ever filed a complaint with a state insurance commission.  In many states it is difficult to find the state agency responsible for taking complaints against managed care companies.  Unlike Medical Boards, insurance complaints are often a well kept secret.  There are often pro-insurance and pro-managed care statutes in state law and industry insiders on the commission.  In my experience, the only hope state residents have against the managed care industry is an activist Attorney General.  Activist AGs happen about once a decade.    

These are all huge deficiencies in a Rule that is supposed to assure parity between mental health and substance use disorders and general medical surgical treatment.  Combined with pressure for collaborative care in primary care clinics, it is very easy to imagine that this Rule will not make any difference at all.  That is my preliminary take on the Rule with my previously stated qualifiers.

I fully expect a business friendly government to continue to be an obstacle to the provision of quality mental health and addiction services largely due to the conflict of interest it creates when it uses private businesses to make money by denying care at several levels.  But the New York Times won't be telling you that.

George Dawson, MD, DFAPA

Final Rule on Mental Health Parity.  Federal Register.  November 13, 2013.

What JAMA Psychiatry Doesn't Know About Patient Dumping

JAMA Psychiatry recently posted commentary on a form of patient dumping that I described in a previous post as Greyhound therapy.  The authors' post an impressive chart of state mental health budget cuts and some of the associated problems.  Their solution to the problem "opening a dialogue among providers, funding agencies, and Congress" is a non solution that suggests a lack of appreciation for the details of the problems and how the system of care for people with serious mental illnesses has been systematically dismantled and is no longer capable of providing quality or innovative psychiatric care.  To illustrate my point consider the following 8 points:

1.  The myth of dangerousness is all encompassing.  At some point the government and the managed care industry wanted to make the rationale for admissions to psychiatric units as difficult as possible to ration inpatient psychiatric care.  The standard question is: "Is this person a danger to themselves or anyone else."  This bias has completely disrupted inpatient care.  We now have desperate people who should have been admitted who are lying about suicidal ideation in order to get admitted.  We have people who don't need to be admitted saying they are suicidal and getting admitted.  The point is that this criteria is irrelevant for a whole range of indications for inpatient treatment.  As an example, anyone with a familiy member who has severe mental illness recognizes that there are times when they are completely unable to function due to their illness.  Leaving that person at home to fend for themselves in that condition is not only a bad idea it is inhumane and yet they may not meet somebody's criteria for "dangerousness".

2.  Length of stay in all community based psychiatric units is based on DRG payments.  That means there is a set reimbursement for a diagnosis related stay independent of how long the patient is in the hospital.  As an example a psychosis DRG is one of the commonest DRGs and the last reliable figure I have is that it pays $4,500 per DRG.  That is set by the federal regulatory agency for Medicare reimbursement but practically every managed care and insurance company pays the same way either per admission or per discharge.  If the patient stays 5 days that is nearly the mythical "$1,000/day" that most people believe the hospital is reimbursed.  If the stay is 30 days that is $150/day and less that the cost of most board and care homes.  This is a strong financial incentive for the hospital to discharge the patient as soon as possible.

3.  Despite an emphasis on biological treatments in inpatient settings, there really are no biological treatments that work in the 5 days.  That is the length of stay most hospitals want their patients discharged in.  Most inpatient experts will tell you that severe mental illnesses (as opposed to crisis intervention) often require at least 2 - 4 weeks for stabilization.

4.  Available social service providers have no incentive to assist the hospital with placement irrespective of whether there is adequate housing or not.  The hospital is the least expensive place to house the patient, even if they are stable for discharge.

5.  The economic incentives result in a large patient population that circulates from homelessness to emergency departments to inpatient care.   These same incentives result in the patient being exposed to no single environment that results in their stabilization.  In fact providing thousands of dollars of discharge medications to people who will probably never take them is a massive inefficiency that creates an illusion that inpatient treatment has done something.  My personal conversations and correspondence with many outpatient psychiatrists confirms that most of them consider inpatient care to be a complete waste of time and they acknowledge that they have no good place to send their patients anymore for stabilization.

6.  The same managed care companies that denied hospital claims many years ago currently own the facilities.  They now have case managers essentially running their inpatient treatment and telling the physicians there when a patient must be discharged.  If the doctors working in that environment don't go along they can be forced out or placed in an uncomfortable enough position that they quit.  Managed care companies frequently have proprietary and arbitrary guidelines that dictate when people are discharged.  It is not a coincidence that the suggested lengths of stay are expected to maximize profits and have nothing to do with quality psychiatric care.

7.  Utilization reviewers still exist.  Their job is basically to argue with inpatient physicians and harass them enough so that they discharge the patient.  These physicians were supposed to be "peers" but in my experience talking with them over the years, it was apparent that I was not talking with anyone who had actually worked in an inpatient unit.  Their job was clearly to force me to get the person out of the hospital or play the trump card by denying payment and getting the hospital to force me to get the patient out.  You might ask yourself why they are necessary if their company is paying a fixed fee for inpatient care and I think that is a good question.

8.  The trivial reimbursement for inpatient care deincentivizes access to other assessment and treatment modalities that the patient may need such as specialty consultation, brain imaging, and electroencepaholgraphy.  Patients may be told to come back for outpatient appointments when the treating psychiatrist knows that patient will not return for the necessary appointments and will probably be readmitted soon with the exact same medical problem.

All of these issues combined are why people are discharged to the street or put on a bus.  You can see that the common theme here is actually the rationing of services by the government and managed care industry as well as psychiatry's inability to deliver the quality of care that psychiatrists are trained to provide in this restricted environment.  The suggested solutions in the authors article seem to be written by Joint Commission bureaucrats and will have little impact.

This is a problem that can be solved by psychiatrists but it has to start with a quality approach.  Inpatient specialty training in psychiatry with a focus on providing state of the art assessment and care is necessary.  It is an ideal place to begin to attend to the cognitive dimension of psychotic disorders and mood disorders.  Civil commitment laws need to be reformed with a focus on treatment rather than dangerousness.  There needs to be an appropriate hand-off from the hospital team to  a community team and a housing team.   It is the time to stop demanding "cost effective" treatment from a system that has been practically rationed into non-existence.  It is time to invest in quality to the point that patients with severe mental illness and their families can expect that there will be psychiatric services available as a resource on par with the cardiology services they expect for any middle aged person with chest pain.

George Dawson, MD, DFAPA

1.  Das S, Fromont SC, Prochaska JJ. Bus Therapy: A Problematic Practice in Psychiatry. JAMA Psychiatry. 2013 Sep 25. doi: 10.1001/jamapsychiatry.2013.2824.  [Epub ahead of print] PubMed PMID: 24068366.

American Psychosis - The Final Take

I finished reading E. Fuller Torrey's recently released book American Psychosis - How the Federal Government Destroyed the Mental Illness Treatment System .  I recommended it on the basis of a a quick initial read of a brief section on managed care but can provide additional details at this time.  I will start with the conclusion.  Criticizing an expensive, fragmented, and poorly conceived system of care for severe mental illness is a fairly easy task for any psychiatrist who tries to provide care for the target population of people with schizophrenia, bipolar disorder and severe mood disorders. This book concentrates many of the references about deinstitutionalization, incarceration of the mentally ill, victimization of the mentally ill, and aggression and violence by the mentally ill in one place.  In the conclusion Dr. Torrey also recommends some 10 potential solutions to the problems and more importantly suggests the some of these need to be implemented on a small scale rather system wide.  

I am sure that Dr. Torrey and the publisher of this book would not be very happy if I put all 10 of his proposed solutions on this blog, so I am going to focus on one that is consistent with my initial post and one of the major themes of this blog:

"For profit funding of of public mental illness services has been tried and it does not work." 

This is the real experience of anyone who has worked in psychiatric acute care and by that I mean the hospital in your community where people are brought in by the police on emergency holds.  Even in that setting there are levels of acuity.  In a metropolitan area there may be 8 or 10 psychiatric inpatient units but only one or two of them will accept patients with high levels of aggression or suicidal behavior.  In an ideal world these would be units where there are staff with high levels of expertise in treating these severe conditions, but the reality is that economic considerations are at the top of the list.  There needs to be adequate staffing for close supervision and the staff have to be able to deal with high levels of aggression toward self or others.  There also needs to be expertise in recognizing and treating alcohol and drug intoxication and withdrawal states.  There is usually minimal attention paid to the therapeutic aspects of the environment.

When I first started working in that environment it was the late 1980s.  I had just completed a three year stint as the medical director of a very good community mental health clinic that offered case management and Assertive Community Treatment.  I was well trained in community psychiatry at the University of Wisconsin Psychiatry Department and it was good to actually practice it with a team of highly motivated people.  
                                                                   
The first months on the inpatient unit resulted in several "denials" by insurance company intermediaries functioning to ration care.  Keep in mind that all of these patients were in the highest acuity unit in the hospital, had problems with suicidal and aggressive behavior, and many needed detoxification. The rationale of the "peer reviewers" was the the patient did not require acute care or the care could be provided at a less intensive facility.  Apart from county detox facilities that had policies against admitting suicidal or aggressive patients - no less intensive facilities existed.

When you are in that environment trying to provide care, it is pretty obvious that this peer review process is basically an insurance company game to make money.  In the small print in the denial letters there was an option to appeal all denials to an administrative law judge within the state.  I asked my colleagues and nobody had tried that route.  I collected 12 denials and requested a hearing in front of the administrative law judge.  I took a day of vacation to go to court.  A week before the hearing I was informed that my hearing was cancelled and the administrative law judge decided in favor of the insurance company.  I appealed to the Attorney General on the basis of conflict of interest stating that the peer reviewers worked for a competing organization and therefore this was anticompetitive activity.  The AG informed me that they were independent contractors.  How can you be an independent contractor if you collect a paycheck from the organization that is denying care by your competitor?  It was clear to me that the state government was very friendly to the managed care industry.

The whole managed care strategy for rationing care or in  extreme cases shutting down entire psychiatric units was outlined in my previous post on overutilization.  It is the basic money making strategy of managed care organizations.  It essentially doubles down on rationing.  That occurs because hospitals are paid a set amount for taking care of people regardless of how long they are there and that amount is denied in as many as 10% of cases.  If there is one deficiency of this book it is a lack of granularity on this issue.  Dr. Torrey approaches the problem as a top down problem of policy deficiency, driven by an ideology that bed capacity could be shut down and not missed either because of the toxicity of state hospital settings or too much faith in the federal initiated community mental health movement. 

Assuming that a patient can actually get the level of acute care that they need without being thrown out of the hospital by an insurance company, the fragmentation of care does not stop there.  Even though insurance companies say they are emphasizing outpatient care, getting an appointment may be impossible.  The prescribed medications may be denied.  Housing options or community case management for people with severe mental illness are not usually available unless the insurance changes to a public option.

American Psychosis covers the funding and policy issues on a global level before it gets to the suggested solutions.  Excellent examples are given to illustrate these points.  For example, North Carolina is given as the example of what happens when a state mental health system is privatized (p 158).  The parameters of the dramatic deterioration in services that resulted from this maneuver is a well documented example of what happens when a for-profit entity begins to manage care and shift the responsibility for care of serious mental illnesses to the correctional system.

American Psychosis is a well organized analysis of the problems that occurred as the result of an initiative in the Kennedy administration.  It contains a lot of information and references about what has happened as the result of these decisions.  There is also a subtext and that is it is written from the perspective of a psychiatrist who has been a thought leader on the issue of treating people with severe mental illness.  Only a minority of people in the United States understand that perspective and I think that there will be predictable backlash from the constituencies that believe a severe mental illness is a preferred state and that everyone should have the right to enjoy it.  

That is not the experience of any acute care psychiatrist and Dr. Torrey presents that perspective very well. 

George Dawson, MD, DFAPA       

A Primer on the Utilization Game

I want to post some references on the issue of "overutilization" but it is necessary to review the concept before I can post those references of make any further arguments about it.  Most people fail to understand that when they are talking about psychiatric practice in the US that it is tightly controlled by large health care and pharmaceutical middle men who make their profits to a large extent by denying care or insisting on cheaper care.  The very first articles using this term in medicine date back to the 1970s and involve policing various health care providers who were ordering unnecessary tests and procedures largely to prevent the loss of taxpayer dollars.  Some of the first articles looked at the problem as a combination of the need to assess quality of care according to certain standards, illegal behavior or intentional fraud, lack of education on the art of the practitioner, and "to ascertain where there is overutilization or underutilization of services perpetrated either by the practitioner or by the patient". 

In this early reference dental, optometry and podiatry services were an areas of focus and the measures of overutilization included too many x-rays, unnecessary fillings, unnecessary prescription of orthopedic shoes, and shorting prescriptions.  Professional services were evaluated by peer review and were categorized as being problematic because of unusual pattern of practice, poor quality of care,  unethical procedure, office facilities, qualifications for practice, abuse of billing codes, fraud, and self referral.  Although the source of the investigations and lack of equivalence of markers were problematic there ws a suggestion that overutilization was a significant problem.  Underutilization was suggested as a significant problem in under served populations but it was not systematically investigated.

The most systematic unbiased investigation of overutilization was done by the Peer Review Organizations in the late 1980s and early 1990s.  These efforts are documented to some extent in the National Academy of Sciences texts.  The protocol in the PROs consisted of a list of generic quality screens applied by nurse reviewers to hospital and clinic records.  The charts were also reviewed for appropriate utilization.  If a chart was flagged by a nurse reviewer it was sent to a physician reviewer for confirmation.  All physician reviewers were rigorously screened for qualifications and conflict of interest.  No reviewer could review records from any clinic or hospital that they were affiliated with.  Reviewers also had be in active practice and everyone knew that you could not make a living from reviewing charts for the PRO.

The result of the PRO experiment is a significant untold story.  A total of 6.3 million cases were reviewed using these protocols by 54 PROs across the country.  The denial rate for overutilization was 2.7%.  The frequency of quality problems was 1.3%.  The total cost of the program was about $300 million per year compared with the total cost of Medicare for the same year being $81.6 billion. I was a physician reviewer at the time and was eventually notified that the PRO program was being phased out because the cost of the program could not be justified by the amount of care denied ($300 million versus $220 million).  

What happens when overutilization is handled by companies that profit directly by denying care and the physician reviewers are either employees or contractors with that company?  As you might expect, the denial rate heads in a predictable direction.  Although it has not been extensively investigated, this article showed a denial rate of about 10% with rates varying with the companies involved.  As expected health plans with greater profit margins had higher denial rates and discounts.  Denial rates of 8-10% were replicated in another large study.  

At some point it became apparent to insurance companies that behavioral health services (their term for mental health and psychiatric services) would be an easy target for rationing and so-called "carveout" approaches.  This was buoyed by the Employee Retirement Income Security Act (ERISA).  ERISA effectively indemnified insurance companies and behavioral health plans against lawsuits over improper care.  Although there have been some suggestions that the courts may reconsider this indemnification, there has never been any significant movement in this area.  Managed care companies have successfully had their methods included in state statutes and have generally established a standard of care where rationing is a significant component.

A study by the Hay Group looked at the results of managed care rationing on mental health benefits as opposed to general medical benefits between 1988 and 1997.  There found a disproportionate decrease in mental health benefits across a number of parameters including:

- Fee for service plans were prevalent at the beginning of the study (92%) but they were largely replaced by managed care at the end of the study (20%)

- The value of general health care benefits decreased by 7.4% across the study but the value of behavioral health benefits decreased by 54.1%.

- As a total percentage of health care costs, behavioral health care decreased  from 6.1% in 1988 to 3.1% in 1997.

- Behavioral health care benefits were clearly rationed including a decreased number of inpatient days, a visit limit on outpatient care with per dollar visit limits and annual dollar limits that did not correct for inflation across the time of the study.

- Outpatient behavioral health care utilization decreased by 24.6%  between 1993 and 1996 while general health care utilization increased 27.4% in the same period.

- Inpatient mental health admissions decreased by 36.4% while general health admissions decreased by 12.7%.

The Hay Group Study was the best early evidence that mental health care was disproportionately rationed by managed care techniques.

If we fast forward to the present, managed care companies have taken the next step to make their rationing techniques as opaque as possible.  At some point some the largest companies have actually acquired the resources where health care is actually produced – clinics, hospitals, and groups of physician employees.   In that scenario they can bring their “overutilization” bias in house and use case managers to police doctors and tell them when to discharge patients.  The case managers are backed up by medical directors who are promoting the company line of a managed care company and who will do what they can to back up case managers if any physician is advocating for a longer length of stay.  They frequently have proprietary discharge guidelines that have not been scientifically validated that they use to establish discharge parameters.  It is no coincidence that the discharge dates all happen to be about the same time that most payers set as the maximum number of hospital days that they will pay for. 

The end result creates a health care system that is firmly entrenched to ration health care on the basis that there is an imaginary number of days or amount of money that can adequately treat a problem.  The only person who can advocate for the patient is their physician but he or she is clearly up against it.  The problem is more than being harassed by an outside company.  Now the physician’s job is on the line as well.  Disagreeing with the medical director on a consistent basis even a few times does not bode well for longevity within an organization.  In the case of hospital care we have physicians who realize that they need to discharge people in 4 or 5 days whether they have improved or not.  I can say from 22 years of inpatient experience that most people admitted to psychiatric hospitals with major psychiatric disorders do not improve to the point that they can be safely discharged in 4 or 5 days.  My conversations with outpatient physicians confirms this.  Typical managed care hospitals are no longer viewed as places where anything productive happens to improve patient stability.  The staff there will often admit it by saying that they are there for “mental health crises”.  But what happens when the crisis does not resolve in 4 or 5 days?

The limits on mental health care have also severely impacted outpatient care.  There is an emphasis on prescribing medication, often based on brief symptom checklists.  This also allows for the recruitment of large numbers of primary care physicians to treat problems once the checklist becomes the defacto mental health diagnosis.  Treating large numbers of people with anxiety and depression is much less expensive for health plans if the treatment is generic antidepressants or benzodiazepines.  Each patient is basically being “treated” for about $4/ month and they can be seen in follow up visits very infrequently.  It is well established in the research literature that different forms of psychotherapy work as well and in some cases better than medication for these conditions.  The research proven therapies generally require a specific course of treatment on the order of 8 – 20 sessions.  It is rare to see much therapy beyond three sessions in managed care settings and that would generally be received by a patient who was already taking a medication.

At this point we have devolved to a system of mental health care that devotes little time and effort to the treatment of mental disorders.  The treatment that does exist out there is clearly biased toward saving money for large health care companies who provide the bulk of it. All of that rationing is based on the premise that there is overutilization of services when the largest and best study shows that it does not approach the level of rationing that has occurred.

George Dawson, MD, DFAPA

1: Bellin LE, Kavaler F. Policing publicly funded health care for poor quality, overutilization, and fraud--the New York City Medicaid experience.  Am J Public Health Nations Health. 1970 May;60(5):811-20. PubMed PMID: 5462556; PubMed Central PMCID: PMC1348897
2: (1990) Medicare:A Strategy for Quality Assurance, Volume I: The National Academies Press.
3:  (1990) Medicare:A Strategy for Quality Assurance, Volume II: Sources and Methods: The National Academies Press.

4:  Hay Group: The Hay Group Study on Health Care Plan Design and Cost Trends, 1988 through 1997. National Association of Private Health Care Systems and National Alliance for the Mentally Ill, 1998.
5.  Dawson G.  The Utilization Review Hoax.  February 2012.

Managed Care 101 – The Prior Authorization Hoax

As managed care organizations worked on how they could prioritize pricing over medical decisions they came up with various plans to “manage” how physicians prescribed medications.  I was a member of two Pharmacy and Therapeutics Committees (P & T) that  both had this as a goal.  One of those committees had a much stricter mandate in terms of saving money.  The basic strategy used by that committee was to place a drug “on formulary” or “off formulary”.  If it was “off formulary” it was not available to any doctors within the HMO to prescribe.

The idea that all drugs within a class that had the same purported mechanism of action ruled the day.  As an example, all of the selective serotonin reuptake inhibitors (fluoxetine, paroxetine, sertraline, citalopram, escitalopram, fluvoxamine) would be considered equivalent medications and the committee would decide to place the least expensive ones on the formulary.  At the time, the major controversy was fluoxetine because there was no generic brand available and the company that produced it was notorious for not negotiating prices with hospitals and health care systems.  There was an eventual appeal by psychiatrists who presented to the committee on the unique qualities of fluoxetine.  At the time it was the only medication studied in adolescent depression for example.  Eventually a rule was passed that it was nonformulary for any physician who was not a psychiatrist.

The total cost of the drug was more of a consideration than the absolute price.  Very expensive drugs were approved that had questionable endpoints based on the fact that utilization would be low and that advocates for a particular untreatable illness would want it.  So the decision of the committee and their mandate was to reduce the use of relatively more expensive drugs that would be used fairly frequently.  In some cases, the off formulary drugs were available by “prior authorization” meaning that the prescribing physician needed to usually write up an appeal and fax it to the pharmacy or health plan and in some cases make additional calls.

The health care business has a long history of introducing layers and layers of management driven largely by the amount of money involved.  If you can successfully insert more management for even a small percentage of the available health care dollars you will potentially have a multi billion dollar business.   The management of pharmaceuticals is no exception and the Pharmacy Benefit Manager or PBM was born.  The task of the PBM like the task of a P & T Committee is to control the prescribing physician and force them to choose a medication based on the lowest cost.  Individual variation between patients and all of the other variables that physicians have to take into account do not matter.  If the physician or the patient thinks that they do – it will take a prior authorization for the alternate medication.  

The PBM model was designed from the outset to take a central role in the management of prescription drugs by replacing the relationship that the patient has with their health plan, their pharmacist, and even their physician.  How do I know this?  Take a look at their game plan from an internal memo in the diagram below.  This diagram was taken from an internal memo from over 15 years ago.  The structure depicted in the diagram is the system of care that exists today and the one that 95% of patient have their benefits managed through 

The prior authorization fallacy is essentially the same as the utilization review fallacy.  The most charitable interpretation is that it assumes that a person who is not necessarily a physician and who has no personal responsibility for your care can substitute their judgment based on a cost consideration.    

The diagram is also instructive in the way that the prescribing decision (and the dispensing decision) is trivialized as a "habit" rather than a decision that takes into account the evaluation and personal knowledge of the individual patient.

Today all physicians are routinely subjected to prior authorization procedures that waste significant amounts of their time and the time of their staff in order to make seem like the PBM decision has some degree of medical legitimacy.  The cost to medical practices is huge and completely unnecessary.  If PBMs are really businesses there is really no legitimate reason that they need to include physicians in their decisions of what medication should be covered.  They just need to plainly state that to their patients and deal with the public relations problems instead of wasting about one million hours of physician time per week.  In the weeks that follow I will demonstrate just how far this business plan has infiltrated medicine and psychiatry and what the response has been to date.

George Dawson, MD