Tuesday, October 15, 2013

Fwd: qotd: Physician-hospital-insurer entities forming narrow networks

Quote-of-the-day mailing list

-------- Original Message --------
Subject: qotd: Physician-hospital-insurer entities forming narrow networks
Date: Tue, 15 Oct 2013 12:28:11 -0700
From: Don McCanne <don@mccanne.org>
To: Quote-of-the-Day <quote-of-the-day@mccanne.org>

The New York Times
October 12, 2013
Out of Network, Out of Luck
By Theresa Brown

For several hundred patients at the University of Pittsburgh Medical
Center, it started with a certified letter informing them that they were
no longer allowed to see their physicians. The reason? They were unlucky
enough to have insurance called Community Blue, which is offered by a
rival hospital system. Astoundingly, they were barred even if they could
pay for the care themselves.

One patient, in the middle of treatment for lung cancer, said at a
hearing before a State House of Representatives committee that she was
prohibited from seeing her U.P.M.C. oncologist. Another, with the
debilitating autoimmune disease scleroderma, said she was dismissed from
the U.P.M.C. Arthritic and Autoimmune Center. A third, a five-year
breast cancer survivor who needs follow-up care every six months, was
cut off from the doctor who had been with her since she was first given
her diagnosis.

Community Blue is sold by a company called Highmark. Like U.P.M.C., it
is both a hospital system and an insurance provider, part of a growing
trend toward vertical consolidation in the two industries. These and
other companies insist that such consolidation streamlines the
caregiving system and thus benefits the patient. But in the short term,
they are waging a vicious war over patients — and as the experience in
Pittsburgh shows, it's often the patients who are losing.

Historically, U.P.M.C. was the biggest health care provider in
Pittsburgh and Highmark the largest insurer. U.P.M.C., though, has been
selling its own brand of insurance for over a decade, and Highmark
recently affiliated with a local multisite hospital system, now known as
the Allegheny Health Network.

U.P.M.C. responded to the formation of the Allegheny Health Network by
labeling Highmark a competitor and a threat to its financial
sustainability. It has also announced that its current contract with
Highmark will not be renewed, meaning that in December 2014 almost all
U.P.M.C. hospitals will be open to Highmark customers only at
out-of-network rates, which are among the highest in the country.

At the same time, U.P.M.C. is running an aggressive ad campaign for its
own health insurance plan, and Highmark subscribers with Community Blue
have been denied access to their U.P.M.C. physicians.

More health systems nationally are following the lead of U.P.M.C. and
Highmark, combining health insurance with the provision of care itself.

The worry is that integration will yield not better care but higher
profits achieved through monopolistic consolidations and self-serving
business practices.


Comment: Integrating health care is a great concept that theoretically
should improve coordination of care, reduce duplication, provide
incentives to meet quality and outcome targets, improve access to
appropriate specialized care - in general, improving quality while
reducing costs. That is the idea behind the Accountable Care
Organizations established by the Affordable Care Act. How is it working
out in the real world?

We've watched as insurers have consolidated. Although they tout that
they are providing higher quality at lower costs through managed care,
in fact they have used their oligopolistic leverage to limit patient
access to their selected network providers. Although they contend that
they are selecting the highest quality providers, in fact, they are
excluding quality institutions such as academic medical centers and
going with the cheapest contracts they can extract from the health care

In response, we are witnessing an explosion in consolidation of health
care providers - hospitals and physician groups - often into single
entities. Obviously this results in "must have" groups that in turn have
leveraged their oligopolistic negotiating power in dealing with the

Not to be outdone, we are now seeing insurers and consolidated health
care systems joining together to increase their control of markets, and
thereby share in the spoils. When you see patients with lung cancer,
breast cancer, and scleroderma being cut off from their care strictly on
the basis of realignment of the health care business models, you can
dismiss the concept that these changes are changes that are designed to
benefit patients. The ugly competition that is taking place between
Physician-hospital-insurer entities (Phi) is cutthroat and certainly not
in the patients' best interests. (Phi seems to be an appropriate symbol
for these entities since, in Lacanian psychoanalysis, it is the symbol
for "the phallic function.")

The Affordable Care Act very specifically was designed to keep control
in the private sector. Private sector business models will always do
what they are designed to do - anything to make more money. If we really
do want a system designed to provide the best care possible with our
available resources, we need to dismiss the private insurers and put our
own public stewards in charge. They would have the responsibility of
answering to us.

No comments:

Post a Comment