Saturday, January 21, 2012

White bagging, or the seventh circle of health insurance Hell

Let's say you're a patient with a low income who qualifies for help from a drug company. That drug company is willing to deliver the drug, free of charge, to an infusion center near you.

Great, right?

And let's say your insurance is contracted with Scottsdale Chemo Hut. (Sure, it would be nice to get the infusion done at your oncologist's office, but your insurance won't cover treatment there, even though it will cover office visits. That is the sixth circle of Hell, which has more circles than Saturn has rings when it comes to health insurance issues.)

So let's say you are getting everything set up with Chemo Hut, and in the process you  speak to the pharmacy manager. And you are told this: Chemo Hut does not accept drugs directly from drug companies. The drug can arrive in an armored vehicle, in a suitcase chained to the wrist of the president of the company, and they'll still refuse to accept it.

And why is this? Because Chemo Hut cannot bill for it. If they use their own supplier, they can make money. Increasingly, more hospitals and infusion centers are refusing to administer free drugs that their patients qualify for. This is because they are upset about a trend known as "white bagging."  

Under white bagging, insurance plans use their own specialty pharmacies to supply drugs at a cheaper rate than those purchased through the hospital supply chain. By some estimates, this now accounts for some 25% of infusions. Complimentary drugs for the less financially fortunate are collateral damage in this tug of war between insurers, who want to contain costs, and hospitals, which want to maximize profits.

Hospitals also complain about the inconvenience of having to store these drugs separately and write things like "for David Arenson only" on the outside of the box.

FYI, there is also something called "brown bagging," in which the drug is delivered to the patient, who totes it in along with their lunch. Maybe I can see that one being a problem. Chemo Hut may not want to be responsible for infusing you with ofatumumab you bought off a guy in a truck down the block.

Still, for patients who need chemotherapy and who cannot otherwise afford it, Chemo Hut and other hospitals and centers are making no exceptions, and this makes life difficult, not to mention a little more absurd than it already is.

In my case, Chemo Hut will infuse the drug if it is ordered through their supplier; our insurance company does not work with specialty pharmacies, and it has approved the drug under my medical benefit, which means I have to pay 20% coinsurance. Or, we estimate, upwards of $20,000 by the time all is said and done.

Well, lucky me, Chemo Hut also has a financial assistance program. A patient may qualify for a reduction in the bill of up to 100%. I say "may" and I use the term guardedly, because a patient may also not qualify, and be stuck with angry collection agencies and dings on their credit if they are unable to pay. The coinsurance the patient owes must now be written off as a loss. And while the insurance company will pay 80% at a negotiated rate, there is probably not a huge amount of profit there. So how much money is Chemo Hut actually making when all is said and done?

Chemo Hut could have administered free drug and still earned money on the costs of infusion, which is not chump change. But that would have been too easy. I know from running a business that sometimes you sell something and make a lot of money, and sometimes you sell something and make a little, but that you need both kinds of sales to stay profitable. (Not to mention the moral issues involved, but we're talking the health care system here, so that may not apply.)

There is one alternative, perhaps. One might ask the insurance company to approve infusion of the drug in the oncologist's office after all. The oncologist doesn't have a problem with white bagging because the oncologist actually cares about the patient. The oncologist, BTW, would like to be "in network" with the insurance and is willing to negotiate a fair price.

All of this would save the insurance company from having to pay huge sums of money for an expensive drug that can be gotten for free. Compared to the costs of the drug, paying the cost of administration is a substantial savings.

The savings would be, as they say on Vulcan, logical. This is Earth, though, specifically the United States. The insurance company (and Chemo Hut) would rather create a ridiculous financial morass that benefits no one, including the patient.


stew (WORCESTER) UK said...

Hi Dave ,
Hope it all works out for you ,just wanted you to know your diary is really beneficial and informative especially to recently diagnosed cll sufferers(most grateful) ,must admit bewildered by the health care system in america although may get better with obama . i appreciate you have your own on going difficulties but Would it be ok to pick your brain from time to time (i know your not a doctor)
Stew (student nurse)

Anonymous said...

This type of thing has been the most disheartening aspect of my CLL journey so far. Who thought up the idea of making huge amounts of money off of really sick people? It is immoral and repugnant. I am ashamed of the USA in this regard, and hope someday to live in a society that takes care of its sick and poor.

Anonymous said...

well well well your still alive i'm surprised you havn't died from strss related problems...
i was glad to track you down with your recent post..i started my cll journey 4 years ago...reading all your old post
gave me lots of insight and courage to make decisions..everything for my blood counts are normal 4 years into cll...except the white blood counts are high takes about 12 to 14 months and the counts are running 100 to 150 then we start to treat it ...back to the courage ...i am alergic to rituxinab,,almost killed me in the chair the first time 2 hrs into the drip...that was 3 years ago...yesterday i decided to try it again same problems.. not as bad on a very very slow drip..i will finish this bag in the morning..if it hadn't been for your post from when you first stared writing i would have neaver started it again..same with me i changed doctors,,i seen him kill too many people in three years..he is now gone and i have a great new doctor who acualy cares about me and my cll..and she begged ne to try the rituxinab again with this very slow drip approch...i'm happy your still here with us all i enjoy reading your cll diary and good luck with your journey..sad to say a friend of mine in town also had cll and he refused to take any treatments for it after 4 years he has my word is like yours get out there and fight and you will win this war on cancer,,the cure for cll is just around the corner maybe 5 years out from today,the penn state study with 3 people with cll will change the way we are treated using your own blood that they program to seek and kill all cll cancer cels from every part of your body...lets fight to be here for that day and recive that treatment
joey from montana

David Arenson said...

Good to hear from you, Joey, and glad things are going well for you. One reason I keep blogging is because of posts like yours where I was actually able to be of some help to someone. . . . I'm sorry to hear about your friend. His story reminds us all that sticking your head in the sand is a sure way to stop breathing.

Best of luck in the future,