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Striving to balance member insurance needs versus requirements

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Striving to balance member insurance needs versus requirements: rise in diversity of health and disability claims challenges coverage, drives up cost
Bruce Palmer, Managing Director
Lately, I have been thinking a great deal about the future. Some of my reflections are prompted by a recent change in my role at the OMA, some are brought on by the unrelenting passage of time and the inevitable changes this brings, and some result from the fact that a new year is upon us.

A good friend recently sent me an email that posed the following question: "One month left in 2016 — will we remember it as a good year or a bad year? A year helping create the future we love, or a year fighting against a future we wish to change?"

She is contemplating some significant career decisions and is trying to figure out what to do next. Her preferred choice — the one that would best fulfil her personal goals — comes with a 50% cut in pay. This has prompted serious consideration of goals versus needs, and whether the cost of "doing the right thing" is worth it for her.​​​

This dichotomy — the price of wanting what is "right" versus the cost of needing what is "sensible" — affects us greatly at OMA Insurance, and is the source of much discussion and consideration.

Our policies are intended to serve our membership, but they are individually purchased by members. And balancing the best interests of members and the membership is not always as straightforward as it seems.

​ Balancing the best interests of members and the membership is not always as straightforward as it seems.

For example, with respect to health insurance, there are cases where ill members who have had little or no success with conventional medical treatments have sought out, and benefited from, non-traditional treatment modalities that are not recognized or paid for by OHIP. After undergoing these treatments — often at great personal expense — many such members will seek reimbursement through their personal health insurance policy.

Similar circumstances have arisen in cases where an ill member requires an expensive prescription medication — costing in the thousands to hundreds-of-thousands of dollars per year — which, although not approved for use by Health Canada, has been used successfully to treat similar medical conditions among patients in the United States (where the same medication has been approved by the U.S. Food and Drug Administration). People who have paid out-of-pocket for such medications have also turned to their personal health insurance policies to seek reimbursement.

The number of these types of claims is growing; the challenge is that such cases are driving insurance costs through the roof. These are not the types of claims that "traditional" health insurance policies were intended to cover. As a result, these policies were not priced to accommodate such claims, and premiums are going up.

To put things in perspective, consider that to satisfy a member claim worth $300,000 per year for use of an "experimental" or "off-label" medication would require more than 300 physicians paying $1,000 each, per year, with no claims. The reality, however, is that most people who buy health coverage do make claims at some point, so, in reality, that $300,000 per year costs every doctor in the OMA health insurance plan an extra $20 per year in premiums. Should the plan pay, even if that means higher premiums for all?

Perhaps the solution lies in finding alternate approaches that do not drive up the costs for the majority of members who will never find themselves in these circumstances.

To make the situation more complicated, one must keep in mind that health insurance coverage is not based upon the "success" of treatment: at OMA Insurance, we pay expenses for covered situations regardless of the health outcome of the claimant. To argue that coverage should be provided because a treatment is successful implies that coverage should not be provided when treatment fails: to us, this is an unacceptable argument — and a dangerous step backwards.

The strains on health insurance are going to continue to grow. This is very much a society-wide issue rather than simply an OMA issue, but it is still an issue we need to resolve. Expensive specialty drugs are the most easily identifiable trend, and our entire system is going to have to face the issues of how to pay for hundreds of thousands of dollars in costs per person per year.

​ Our entire system is going ​​​to have to face the issues of how to pay for hundreds of thousands of dollars in costs per person per year.

The future is also putting strain in other areas as well. Disability insurance is seeing more residual disability claims, as people recover from challenging health setbacks sufficiently to work part time, but not full time. While these are good-news stories — it's wonderful to have members back at work — they are complicated claims that make it very difficult over time to calculate how to reimburse people working part time for what they "might have earned" working full time, especially given the current economic realities facing Ontario's physicians. Add to this the fact that some physicians' part-time hours can be similar to the number of hours a non-physician works full time, and the claim gets complicated for the insurance company.

In life insurance, we see terminally ill patients extending their lifespans by weeks, months, and years through the use of aggressive — and often not fully funded — treatments. This is great news if you have the resources to afford such treatments. Fortunately, features like "accelerated benefits" (the term that the life insurance industry has developed to describe paying you your life insurance proceeds while you are still alive) can help, but they are not available on every product.

What does this all mean? Simply put, nobody knows for sure. What we do know is that there are tremendous gains being made in extending human life, and in allowing us to live a better life. And we also know these gains often cost a great deal of money — the type of expense that traditional insurance policies are simply not designed to cover.

All of this brings me back to the question: how will we remember this year? Personally, I will remember it as the year of helping to create the future we want: we have started to look at health insurance and how we can deal with these really profound and difficult questions of cost versus affordability, of helping our members live better lives while ensuring our membership has access to affordable insurance; we have begun reviewing our disability claims and how we treat and assist members going through the life cycle of an actual disability from which they recover over time; and we are discussing the need for affordable and meaningful "accelerated benefits." Most of all, we have recognized that the world is changing at an accelerating pace and we must change to stay relevant.

What I'm saying is this: at OMA Insurance, we face the future with the same mixture of excitement, anticipation, trepidation, and uncertainty as everyone else.

  • Excitement: we are excited about the future, and excited about opportunities to keep working on expanding our offerings to physicians and to serve more physicians in managing the risk in their lives. The more we work with physicians at all stages of their careers and lives, the more we understand their unique needs, and how important it is for their coverages and services to be tailored to their needs.
  • Anticipation: we are looking forward with anticipation to the continued development of new treatments for illness and accident, and for new approaches that enable people to live healthier and longer lives while also recovering faster from the inevitable incidents in their life. Seeing our members live longer, happier and more ​​​productive lives is one of our goals: an implied goal of ​managing the risk in our lives is to reduce that risk.
  • Trepidation: this best describes our thoughts on the topic of drugs and health care costs. As costs skyrocket, and as expensive specialty drugs targeting larger populations come to market, we worry about what will happen to the availability of health insurance. Costs also threaten to undermine the history of equal access, equal treatment, and equal outcomes that have been the foundation for much of the development of the Canadian health care system.
  • Uncertainty: will we have all of the "right answers" when it comes to serving physicians' insurance needs in the future? We simply don't know. Some would see this uncertainty as weakness, but we see it as recognition of the significant changes happening within society, within the health care community, and within the world of physicians, and of the many ambiguous and often contradictory indications that these changes imply. We are certain that the world of insurance will be different in the coming years, but we are uncertain exactly how it will be different.

As a new year begins, we know that OMA Insurance will be there to serve you. We will work to keep our service, our coverage, and our options current. We know that it will be exciting, anxious, trepidatious, and uncertain. As we balance member needs versus membership requirements, we will continue to be focused on you. We will serve you as our only clients.

​OMA Insurance: Not for Profit, All for Doctors.