Health Advisory Needs of Employers

Employers are taking on unknown risks when they contract for the health care of their employees. The employer is assuming an implied liability for delivering the patient into a competent health care environment. For the moment, the insurance company is off the hook with regard to responsibility for that care. At the same time, the bond between patient and physician is being diminished by managed care. This bond is the single greatest deterrent to the patient taking legal action and seeking compensation when there is an unexpected outcome or when they feel they are not getting the care they have been promised.

The Health Advisory is critical to protect the employer from inadvertently becoming party to substandard care. The deepest and most vulnerable pockets in medical malpractice right now are those of the companies who purchase health benefits for their employees. Most employers believe that they have handed off this liability by purchasing a health plan.

However, the health plan or managed care entity is protected from liability by the Employee Retirement Income Security Act (ERISA) of 1974, which indirectly created modern health insurance. Physicians, when sued, are often relying on the limitations imposed upon them by the managed care plans. The managed care company can pass the buck in two directions, up and down. The employer is further up  the chain and is perceived as having the greatest resources.

The employer needs to have oversight with regard to the care patients are getting. This is partly provided by patient satisfaction surveys and reports from the managed care organization. But the employer should have a high level of vigilance for employees disgruntled with their health care. They need to have a mechanism in place for an independent audit of care in particular cases as they arise. This is the role of the Health Advisory.

While the managed care organization itself will have grievance procedures, it is not a disinterested party. Its judiciary is not separate from its treasury or executive functions. In essence, it is judge, jury and executioner. In addition, its processes are often cumbersome and slow with disincentives for patients and their physicians to pursue grievances. Such decisions are inevitably weighted towards the interests of the bottom line.

Managed care organizations continue to fight hard to remain exempt from legal liability for the consequences of their activities. They have so far been able to use the umbrella of federal protections afforded by ERISA. In addition, managed care organizations have made major contractual efforts to absolve themselves from liability by contractually offloading this responsibility to physicians and other providers. Both of these tactics will eventually fail, through either court or legislative action; however, repeated efforts in this regard have not yet been successful.

In the meanwhile, the most vulnerable party when it comes to malpractice liability remains the corporation or employer who selected the health plans offered to employees. In the finger pointing chain, it is really stuck. While there are only a relatively small number of such cases working their way through the courts, we can expect to see a significant increase as patients bring legal action for what they perceive to be inadequate care.

The employer needs to take preemptive action to head off trouble with its employees in real time, not after an adverse outcome has occurred. Allowing a situation to get to that point is extremely expensive. The time for an independent review of the problem and its suggested diagnosis or treatment is early on in the process. Companies may make arrangements with the American Health Advisory Center for an ongoing relationship in this regard.

AHAC can also provide orientation sessions so that its human relations staff is alert to cases in which such problems may arise. Human relations officers need to walk a delicate line between spotting genuine problems as opposed to stirring up discontent among its workers.

The Health Advisory can serve the employer well from a personnel relations standpoint. By going to this length, a company tells its employees that not only is it going to provide cost efficient care, but it is are willing to go to bat for any employee who is has a genuine reason for dissatisfaction. In many cases, the recommendations of AHAC may not be far from those of the managed care company, but still sufficient to defuse a potentially dangerous situation with an employee.

The cost to the company for a Health Advisory is typically less than one months indemnity insurance would have been for that employee. The company is saving tremendous sums of money on benefits when it moves its employees into managed care. To some extent, the managed care entity is pushing an undefended mandate onto the providers. Redeployment by the employer of a minimal amount of that savings for the Health Advisory, where needed, is an excellent investment against the potential for huge liability settlements. This approach is not only a good business practice, it is good medicine.

Contact DrRobinson@MD-1.com for further information.
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