Deadly Spin (19 page)

The United States has entrusted one of the most important societal functions, providing health care, to private health insurance companies that have consolidated into huge players with weak competition. More than one out of three Americans is now enrolled in a plan administered by one of the seven largest insurance companies—all of them listed on the New York Stock Exchange and owned primarily by big institutional investors.

Despite the recent reform, most analysts expect consolidation to continue as the big insurers buy smaller competitors or push them out of business. Consolidation is inevitable because the government’s failure to control it has resulted in a cartel of huge insurers so influential that smaller companies will eventually have to sell out or shut down.

The industry itself is even suggesting that the law will lead to further consolidation. In the May 16, 2010, edition of the
New York Times
, WellPoint’s chief financial officer said that he believed the new law would create opportunities for WellPoint to buy many of the smaller nonprofit Blue Cross plans that were still operating in the United States, because those small plans might have difficulty competing against much larger companies like his. “We have a unique opportunity to be a Blues consolidator,” he said.
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It will not be the new law that creates opportunities for WellPoint and other big companies; it will be the fact that the government failed the public by allowing the cartel to be formed in the first place.

In the future, it will not be “Obamacare” that takes choice away from Americans, as the insurance industry and its allies contended during the recent debate. It will be the unfettered invisible hand of the marketplace.

C H A P T E R   V I I I

An End Too Soon

W
HEN
she was a little girl, Nataline Sarkisyan loved to dance and sing and write poetry. She was a Girl Scout. She dreamed of growing up to be a fashion designer. She was also proud to be an Armenian American and the daughter of Grigor and Hilda Sarkisyan, who had immigrated here from Armenian communities in Lebanon and Syria when they were children.

The Sarkisyans sent Nataline to a private Armenian elementary school near their home in Los Angeles because they wanted to make sure their only daughter could speak their native language. And Nataline was so proud of her heritage that she spent part of every weekend at the Armenian Youth Federation teaching the language to other kids whose parents couldn’t afford to send them to her school.

Nataline was also very religious. She loved Bible school and was always praying for her family and her friends. Her mother said they used to pray together every night. “Just the two of us. We never missed a night.”

The first time I heard about Nataline was late on the Friday afternoon of December 14, 2007. I’d been traveling that day and hadn’t had a chance to check my voice mail messages. There were lots, as usual, and most of them were routine—except for one from a TV station in Los Angeles that stood out because it just didn’t make sense.

The reporter said she’d been told that CIGNA was refusing to cover a liver transplant for a Los Angeles teenager because her family owned a second home. I replayed the message to be sure I’d heard it correctly. I couldn’t imagine why anyone at CIGNA would care if a family had a second home and, even if they did, how it would have any bearing on whether or not to cover a transplant. Nevertheless, for the sole reason that a TV reporter had called about a CIGNA health-plan member, I gave the Nataline Sarkisyan case “high profile” status.

My staff and I took every call from reporters seriously, but we gave special attention to reporters working on “horror stories,” as I mentioned earlier. Typically, whenever any of us got such a call, we would arrange a conference call with senior managers, often including the chief medical officer, and sometimes even the CEO. This one didn’t seem to warrant such a call—at least not yet—but I telephoned my office to find out if any other reporters had called about it.

None had, but the same TV reporter had phoned again. I asked a colleague to call her back to try to get more information and, if necessary, to e-mail her a bland statement of some kind.

E-mail had become the most common way we communicated with reporters. It enabled us to click “send” and dispatch a statement that usually had been blessed (if not already written) by an ad hoc committee of lawyers, corporate doctors, and businesspeople. With e-mail, we were sending not just a statement but a broader message: “Here’s our response to your question. Take it or leave it. It’s all we’re going to say.” More often than not, reporters would take it and not bother us for more information. They were often on a deadline, and even if they weren’t, they knew from experience that they weren’t going to get much more out of us.

The statement we sent to the Los Angeles TV reporter didn’t acknowledge that Nataline was a CIGNA member, much less answer any specific questions about the alleged denial: “Due to federal privacy laws we are unable to confirm that this individual is a CIGNA member at this time. Cases such as this are not decided based on cost, but rather on the medical appropriateness of treatment. There is an appeals process in place whereby physicians who are not with CIGNA review a case and provide another viewpoint on the appropriateness of treatment. We always encourage our members and their physicians to make an appeal in situations where they disagree with a decision.”

We hoped that would be enough to kill the story, but it wasn’t. On Saturday evening, December 15, KTLA-TV aired a brief report about the case. “Members of a local family say they’re living a nightmare, and they blame their insurance company,” said the station’s anchor, introducing the first of what ultimately would be thousands of stories about CIGNA’s refusal to pay for Nataline’s liver transplant.

For the first time, I started paying close personal attention to the case. Not only did I not want CIGNA to get any more bad publicity, but I also couldn’t help thinking about the family. As the father of a daughter just three years older than Nataline, I couldn’t help putting myself in their shoes, wondering what life would be like for my wife and me if we were fighting with an insurance company to get it to cover a lifesaving transplant for our daughter, Emily. Just thinking about it caused me to ache. I tried to quickly put it out of my mind.

Nataline had been diagnosed with leukemia on May 28, 2004, just weeks before her fourteenth birthday. After a series of chemotherapy treatments, the leukemia was in remission. “She only had two treatments left by the time of her sweet-sixteen birthday party,” her mother said. A year later, though, just as she was getting ready to go to the hospital for routine blood work, she told Hilda, “I feel weird, Mom, like something is wrong with me.” Something was: Her leukemia had come back.

This time, her doctors said, chemotherapy wouldn’t be enough. She needed a bone marrow transplant, and it turned out that her older brother, Bedig, was a perfect match. He gladly agreed to be the donor, and CIGNA agreed to pay for it, as long as the procedure was done at a hospital in CIGNA’s network, Mattel Children’s Hospital at UCLA.

“We rushed to get Nataline admitted because timing is so important,” Hilda said. Nataline had to have the bone marrow transplant within a few days of a heavy dose of chemotherapy.

Although Nataline knew her leukemia was back, “you would never have thought she was even a little sick,” her mother said. “She walked into the hospital smiling, knowing she would go back home soon. She looked like she was in perfect health.”

IT WAS THE BEGINNING … OF THE END

Nataline was admitted on Monday, November 12, 2007. Across the country in Philadelphia, I, too, was having a busy, stressful Monday, starting with an eight
A.M.
Public Policy Council meeting at which CIGNA’s lobbyists in Washington briefed my boss (general counsel Carol Ann Petren) and me on the latest talk on Capitol Hill and in the presidential campaigns about health care reform. Immediately after that, I met with one of the company’s securities lawyers about a Securities and Exchange Commission filing. At one
P.M.
, I was off to the boardroom on the seventeenth floor for an important briefing on CIGNA’s Investor Day, which would be held the following Friday at the Mandarin Oriental Hotel in New York. Because the company expected Investor Day to go well—we had told investors and analysts a few days earlier that we expected the company to earn more than a billion dollars by the end of the year—I was asked if I could get a reporter from the
Wall Street Journal
to cover it.

Nataline’s bone marrow transplant, eventually performed the day after Thanksgiving, went well, but serious complications soon developed, especially in Nataline’s liver, stemming from the heavy chemotherapy infusion and accompanying radiation and the transplant itself. A week after the procedure, her doctors said she had to have a liver transplant.

In early December, not long after CIGNA’s Investor Day, which had cost $250,000 ( just feeding the 150 investors, analysts, and CIGNA executives at the six-hour meeting had cost $60,000), Nataline was taken to the ICU, where she would wait for her new liver. Knowing that insurers normally require prior authorization—a liver transplant costs about $250,000, or the same amount CIGNA had just spent in New York—her doctors contacted CIGNA’s transplant unit and asked for approval.

It never occurred to the Sarkisyans that there would be problems. The biggest worry they had was whether a liver would become available and be a match for Nataline. Early in the morning a few days later, Hilda got the call she had been praying for. “Put on your best outfit, because we have the perfect fit for your daughter,” she recalls one of the doctors telling her.

Because it was the Christmas season, Nataline’s favorite holiday, Hilda decided on a red outfit and rushed to the hospital, grateful that Nataline would soon be getting the liver to save her life. She was stunned when one of her daughter’s doctors pulled her aside and told her, “Hilda, we have a liver, but we don’t have clearance from CIGNA.”

“What are you talking about?” she asked him, not understanding why CIGNA would have a say in the matter. “We have insurance, and I know it covers transplants, so what kind of clearance do you need?”

Nataline was covered under a policy that her father had obtained through Mercedes-Benz, where he worked as a technician. CIGNA administered the health care benefits for the company’s employees and their dependents. It was a self-insured account—Mercedes-Benz, rather than CIGNA, assumed the risk—a fact that had seemed of little consequence at the time but that the Sarkisyans would soon learn was of enormous consequence.

Nataline’s doctors told the Sarkisyans that before they could get approval to proceed with the transplant, they would have to do a biopsy of Nataline’s liver to satisfy a request received from a CIGNA medical director. The Sarkisyans felt they had no choice but to agree to it. “They had to cut her and get a piece of her liver just to prove to CIGNA that she needed a transplant,” Hilda said.

By the time this procedure was done, however, the liver that had been a perfect match had had to be given to another patient. The family now could only wait—and pray—for another one.

Another liver did become available a few days later, but the Sarkisyans were in for yet another shock: CIGNA refused to pay for the liver transplant, even though her doctors said it was her only hope for survival—and even though the procedure CIGNA had demanded had proved that her liver was indeed failing. A CIGNA medical director sent a message to Nataline’s doctors at UCLA, where hundreds of transplants are performed every year, saying that the transplant for Nataline, in his view, would be “experimental.”

It had never occurred to the Sarkisyans that their daughter’s fate would be in the hands of someone whom they had never met and who had never laid eyes on their daughter, much less personally examined her or assessed her condition.

When Nataline’s treating physician, a professor of pediatrics in the Division of Gastroenterology, Hepatology and Nutrition at UCLA, submitted his original request for prior authorization, a CIGNA transplant case manager in Pittsburgh began the process of reviewing Nataline’s medical records and the Sarkisyans’ benefit plan. Three days later, she recommended that CIGNA cover the transplant. However, because Nataline by then had developed a lung infection while in the hospital and was very weak, the case manager asked the medical director of CIGNA’s transplant unit to look at the case.

The medical director denied the request from Nataline’s doctors, noting that the Mercedes-Benz benefit plan did not cover “experimental, investigational and unproven services.” In his opinion, a liver transplant for someone in Nataline’s rapidly declining state of health would fall into that category.

Within hours of receiving this denial, Nataline’s treating physician and three of his colleagues at UCLA pleaded for him to reconsider, insisting that the requested transplant would not be experimental. They contended that similar patients had been shown to have a sixty-month survival rate of approximately 65 percent.

Despite the doctors’ plea, CIGNA was not persuaded that there was enough documented evidence that a liver transplant for someone in Nataline’s condition would be appropriate. The company stood by its decision. In communicating that it was upholding the denial, CIGNA said that the lung infection and other problems that had developed since Nataline had been admitted to the hospital would be unlikely to result in a successful outcome for Nataline and that, consequently, the surgery would not meet CIGNA’s definition of medical necessity. Who was right? The reality is that in many cases, no one ever knows. If a critically ill patient dies after an insurance company refuses to pay for a doctor-ordered procedure, which often happens, it can never be proved that the patient would have even survived the procedure.