Health care in America: A children's hospital and an insurer duke it out over rates while families struggle. https://t.co/gobu4nVYMw
— Kathleen McGrory (@kmcgrory) May 30, 2017
That is a cute kid.
That is also some incredible negotiating leverage.
Here is the Tampa Bay Times on the situation
As a practical matter, the letters mean the Shreeves will need to find new physicians, therapists and lab technicians for their 5-year-old son, who has a rare auto-inflammatory disease.
They can’t afford the out-of-network rates at All Children’s.
“I’ve cried more about this than I did when we got the diagnosis,” Christina Shreeve said Tuesday. “It took us two years to put together our team of doctors. It runs like a well-oiled machine. I’m not going to get the same quality of care anywhere else.”
The Shreeves, who live in Fish Hawk, aren’t alone. A stalemate between United — one of the largest health insurance companies in the country — and All Children’s could affect thousands of families across the Tampa Bay region….
United pointed out that several other local children’s hospitals are “in network,” including Children’s Medical Center at Tampa General Hospital, St. Joseph’s Children’s Hospital and Shriners Hospital for Children.
United was offering 20% payment increases. The hospital wanted 35%. Now we get to see who blinks.
Childrens’ hospitals are some of the highest leverage institutions. They are often the epicenter of the very few pediatric specialists in a region and they often have a halo effect on quality. We saw this in Seattle Children’s Hospital being left out of the narrow on-Exchange networks in 2014:
If the numbers or waiver system works out correctly, the state regulators don’t care too much how the network meets adequacy. Evidently, the Washington State Exchange plans met adequacy by excluding most services at Seattle Children’s Hospital.
Why would insurers want to avoid flagship specialty hospitals? Wouldn’t that be a unique selling point that a plan offers full in-network access to the flagship academic and specialty medical centers in the region. It would be a differentiator that a place that can do seven organ transplants can also take care of basic care better. That would be the immediate logic, but there is a significant amount of research that shows more expensive flagship hospitals aren’t significantly better on routine care. Instead, they specialize in one-off and low probability cases that require very high end care
Now we get a public relations campaign of the pediatric hospital showing the very cute kids that the mean penny pinchers at the insurer will kill these kids to make the quarterly estimate. And the evil bastards at the insurer loses in the conversation as soon as they say they are willing to pay 20% but not 35% more. Doctors and nurses are the most trusted professions in America. The local hospital and more importantly, the regional tertiary care hospitals are often the good job anchors of a region. Saying no is hard.
The ideal solution is to split the benefit design so that the patients with truly unique and complex cases that are best handled at a tertiary hospital can go there without any obstacles while all the routine care is directed elsewhere. That is the good deal for the insurer, that is a good deal for premium payers and that is a good deal for the families with complex patients. But that cuts out a lot of revenue for the very expensive hospital from fixing broken legs and managing diabetes.
So it is a battle of cute kids versus soulless bastards…