Dec 14, 2017

What Insurance People Are Really Like


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11/17/2008
Brian S. King
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Joe Paduda posts over on Managed Care Matters about a recent meeting with a group of insurance company executives. The group was deciding what level of care to authorize for a man who had suffered a traumatic brain injury many years before. Joe was impressed with the decision making process because it was apparent to him that the group focused first on the quality of care for the man and made the cost of the care a secondary issue. Ultimately, as between two alternatives, they authorized payment of more money for a higher level of care they felt was appropriate for the patient. Quoting Joe: "few outside this room, or any of the other dozens of rooms holding similar meetings, will ever know about the goings-on around the table. In this case, the claimant, who has been non-responsive for over 20 years, is not capable of knowing. But the people in the room knew what the right thing was, and they did it as a matter of course. Insurance companies are people - mothers, fathers, sisters, aunts and uncles, daughters and sons and nieces and nephews. The vast majority care deeply about their families, their neighbors, their work, doing a good job, doing the right thing. And I'd guess all of them saw the claimant as someone's son, brother, cousin, or nephew, and made sure they did the right thing." I don't doubt Joe's experience. There are circumstances where insurers, for a variety of reasons, provide payment for claims or treatment when they could get away with not doing so. But they also have to compete in a very tight and uncertain business environment. They are not, as Sam Ervin used to say, eleemosynary institutions. If I own stock in an insurance company, I want the officers and directors of the corporation to, as Joe says, do the right thing. But I don't want the charitable impulses of those officers and directors to get in the way of making a profit and competing successfully in the market. My primary purpose in buying shares in the company is to receive an acceptable return on my investment. The reality that these insurers are corporate entities can't be ignored. Corporations don't exist for the same reasons you and I exist. They may be run by someone's son, brother, mom or daughter. But the corporation itself will cease to exist if it doesn't turn a profit for more than a few quarters. They exist to make money. We accept the idea that the best way of doing so is by providing valuable goods or services to you and me and everyone else. But let's not lose sight of the fact that this is the byproduct of, rather than the reason for, their existence. In that sense, the priorities of corporations are the reverse of real people. At least, they should be. Like all corporations competing in the open market, they engage in a delicate balancing act. Provide a service but make sure you do it profitably. My experience representing plaintiffs whose claims have, in my judgment, been wrongfully denied gives me a pretty constant stream of examples of one degree or another of bad insurer behavior. But I don't think insurers are bad or that they act badly on most occasions. Do I think they usually "do the right thing" by the claimant if it's a close call on whether to pay a claim? No. And that doesn't make them evil. That makes them actors dealing with reality. It also gives me an opportunity to help folks during very difficult periods in their lives while at the same time allowing me to provide for my family. I'm grateful for that.

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