Caring for the Crew
Navigating The US Healthcare System
by Christina DeSimone
CEO Future Care, Inc, the leading US medical case manager
Introduction
One of the most unpredictable areas of loss control for shipowners and their liability underwriters is the cost of medical treatment of ill or injured seamen in the United States. The primary difficulty is not necessarily that the treatment is expensive per se, but rather that the maritime industry is globally diverse and does not have a coordinated approach to medical management and cost containment when services are rendered in a United States medical facility. The reasons for this lie with the manner in which medical costs are assessed in the United States and the lack of a substantial presence by the maritime industry in any one market. An individual shipowner may only need treatment for a single crewmember in a port once in a while. Furthermore, the insurers of shipowners are not typically health insurers and cannot avail themselves of the purchasing power of health care and workers compensation insurers to influence charges for services rendered.
As a commercial venture, medicine is extremely competitive in the area of routine treatment, which includes common illnesses and injuries. Therefore, medical providers are responsive to commercial pressures. As a result, medical underwriters throughout the United States, as well as entire industries, have negotiated reduced rates for medical procedures and hospital costs. This has been possible because of the economic presence these entities have in the marketplace.
Medical service providers have also agreed to a system of case management, stipulating which procedures are acceptable as initial treatment and which procedures require the underwriter’s additional approval. The benefits of these agreed rates and management structures are obvious: not only do they allow insurers to obtain a substantial discount in price; they also afford a greater predictability in both the quality and cost of the care provided.
Contrast this regimen with the haphazard manner in which medical treatment of mariners is provided and assessed. The itinerant nature of the shipping business complicates the scenario because there is no established business volume in any one place to bring commercial pressure to bear. Shipowners are treated as if they were uninsured customers, who always pay the highest rates chargeable. There is no rate structure in place, nor is there mandatory case management when a seaman seeks medical treatment in the United States.
The Problem
When an incident occurs, the shipowner’s first point of contact is generally the ship’s port agent. In the case of tramp ship operators, it is most often the charterer’s agent who is responsible for making the necessary medical arrangements. While shipping agents are adept at getting seamen to medical service providers, they are not experts in patient support or medical case management. Agents are understandably reluctant to become involved in signing a crewman into hospital for fear that the hospital and the doctors will look to the agent for payment of the fees. Once delivered to the hospital or clinic, it is up to the shipowner (and his insurers) to address both the costs and the quality of the care after the fact.
In some of the larger, busier ports this reluctance has led to the creation of a cottage industry of medical outpatient facilities with finance rather than patient care being the driving force. Through aggressive marketing, agents are encouraged to refer the crewman to one of these facilities, which then assumes the initial financial responsibility with the hospital for the seaman’s treatment in the event that hospitalization is required. Some of these facilities have sophisticated (and expensive) outpatient medical equipment and expertise. They endeavor to conduct much or all of the treatment in-house. These facilities are profit-oriented and bill on the basis of the number and complexity of the procedures performed. There is potential for abuse not only in the number, cost and necessity of these procedures, but in invoicing for ‘extra medical’ services. Here again the absence of agreed rate schedules and case management protocol places the seaman, the shipowner and his underwriter at a distinct disadvantage.
Furthermore, once the ill or injured mariner is admitted into the hospital or other facility, there is often no one with medical expertise looking after the ship owner’s interests. Typically the agent, or in serious cases, the P&I Club’s local correspondent will contact the mariner as an act of reassurance to the patient and perhaps the doctor, in an effort to obtain a preliminary estimate of the character, duration and cost of the treatment. Unfortunately, in the overwhelming majority of instances, neither the agent nor the correspondent are qualified to adjudicate on the medical issues involved in the seaman’s treatment or on the cost.
The result is that after discharge, the hospital and doctors’ bills are sent to the agent, who is eager to pass them to the shipowner in order to avoid an unprofitable and time-consuming dialogue with the hospital regarding payment. Sometimes, the invoice will be sent to the Club’s correspondent, or the Club Manager, for review and negotiation with the provider. More often, this negotiation with the hospital consists of an effort to reduce the bill, based on a promise of speedy payment, usually resulting in a discount of 5% to 10%, even though the bill may have been inflated by a greater margin. In the cases outlined above, the shipowner and his Club start with a pronounced disadvantage: the services have already been rendered and billed. It is extremely difficult to persuade the doctor and the hospital that they have performed unnecessary procedures – at an excessive cost – after the fact, when the seaman has been discharged and repatriated.
The Solution
The solution to the chaos currently confronting the shipowner over medical costs in the United States is to retain an expert medical case management firm. The key to securing the best medical care at the lowest cost is to obtain agreement with the hospital and doctor on the specifics of these two items before, or contemporaneously with, treatment. The qualified medical case management firm accomplishes both these goals by introducing independent medical expertise and by securing the hospital and physicians’ acceptance of a greatly reduced fee schedule in advance of admission. Ideally, the qualified medical case management firm employs a Registered Nurse (RN) to supervise each individual case. The RN will assume responsibility for the case from inception, discussing with the patient and physicians the course of treatment as it is proposed, and will be capable of coordinating outpatient or rehabilitative treatment, if required, and of proposing a plan for recovery and repatriation. The qualified medical case management firm will also employ, or have access to, one or more independent physicians for advice, as and when needed.
The qualified medical case management firm also brings the financial advantage of membership in one or more preferred provider organizations (PPO’s) that afford the shipowner reduced rates for hospital and physician charges. These preferred rates can result in savings of 40% to 50% or more, as compared with non-member charges, and are generally not available to individual shipowners outside of these PPO networks. Participation in a PPO network through a qualified medical case management firm thus allows the shipowner to benefit from the collective buying power of all the other members of the network, greatly reducing the costs of medical treatment.