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Doc Shock
US Healthcare, Now With Smaller Networks Than Ever

The discrepancy between policy and the problems it is supposed to address has never been clearer than in the health care debate. The Seattle Times reports on the network restrictions that are increasingly limiting Washingtonians’ ability to see key doctors and hospitals without incurring major financial risk. The plans offered in the Affordable Care Act exchanges, it turns out, keep premiums low by drastically reducing the number of providers covered. So a lower premium may mean higher health care costs for people with hospitals, doctors, or specialists not covered in-network:

Not only could [patients] wind up paying most or all of the bill [from an out-of-network provider], they would lose the law’s cap on out-of-pocket expenses.

Premera, for example, limits annual out-of-pocket costs for in-network care at $6,350. But out-of-pocket expenses for care outside the network are “unlimited.”

The article goes on to list every insurance company that offers plans in the Washington exchange as well as the hospitals that are in-network for those companies. Pivoting off of that list, Steve Roth points out that two of Washington’s biggest insurers—Primera and Lifewise—don’t have any of the state’s four top specialty hospitals in their networks. If you want the best cancer, trauma, ER, or pediatric care, and your plan is with one of the two biggest carriers in your state, you’re out of luck. Figuring out which insurers cover which providers, and determining from there which provider makes the most sense for you, is a hugely complex and time intensive process, as Roth details in his piece. And even when you’ve done all the research, at the end of the road is the fact that networks keep getting smaller.

This is a trend that the ACA is encouraging, and the acceleration of it is likely to be the next big PR challenge for the Obama administration. More and more we’re seeing that the ACA is doing nothing to reverse the worst trends driving our health care crisis— and that in some cases it’s even intensifying them. Hospitals are getting bigger, prices are going up, the system is getting even more complicated, and networks are getting smaller. Meanwhile, politicians continue to debate reforms that largely fail to address any of these problems.

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  • ToniTexas

    If ObamaCare weren’t such an apt name, DysfunctionalCare would do.

  • AD_Rtr_OS

    It (BarryCare) was never about opening up the health-care system to more people at a more affordable price.
    It was always about control, and making people dependent upon the largesse of government.
    When all is said and done, actually paying for services with cash out of your pocket (you know, the way you pay for car repairs/maintenance) will connect people to the real world and the costs of living within it.
    We have distorted this system long enough (70-years and counting), and it is well past time that we put a stop to it.
    Just another example of the failure of Wage & Price Controls.

  • Jacksonian_Libertarian

    Since you can’t be denied insurance for pre-existing conditions, everyone should pay cash until a financially catastrophic illness makes paying for insurance the cheaper choice.

    This will be good for the Health care industry, as more and more consumers shop because it’s their money, the “Feedback of Competition” that forces continuous improvements in Quality, Service, and Price will improve medical care for everyone. Hopefully employers upon seeing the huge increases in insurance costs, will just start giving the money that they were paying for insurance to their employees, and tell them to go get their own insurance. The more people that are paying cash for medical care, the better the Quality, Service, and Price will be.

    • ontheleftcoast

      Good advice, except that the hospital you wind up in (assuming that care isn’t denied because of the preexisting condition known as “age” or because you don’t have enough QOL points to justify treatment) is going to be a much of a catastrophe as your illness was. Unless you’re one of the privileged class who works for the .gov or one of its union or corporate cronies.

  • NCMountainGirl

    Because getting the government involved always lowers the cost and expands options /s,

  • free_agent

    You write, “If you want the best cancer, trauma, ER, or pediatric care, and your
    plan is with one of the two biggest carriers in your state, you’re out
    of luck.”

    Isn’t this more-or-less what would happen if the patient were aware of prices, and were sensitive to them? That is, they would choose treatment at facilities that had weaker reputations and thus lower prices?

    If I can trust what I’ve read in the Boston Globe, there isn’t any correlation between medical outcomes and hospital price/prestige, so there shouldn’t be much loss from not going to the “best” hospitals.

    • cheato321

      Yeah, I’m not sure why this would be a bad outcome, outside the PR problem for the president. It adds a little of what we need in the healthcare market – price sensitivity.

      • Peter Blair

        Price sensitivity is obviously key to reform, and a great idea, but ad hoc, unadvertised network restrictions isn’t the best way to go about it. If we want price sensitivity to actually be effective and not just a crushing financial burden on people, it has been orderly, publicly, and gradually. The first step would be to make prices and insurance options fully transparent to people, so they know exactly what kind of bill they will get at the end of any given treatment. Only then can they make informed decisions about rationing their own care.

        • http://chicagoboyz.net/ TMLutas

          Making pricing open and transparent is easy and relatively cheap. Congress simply has to buy a national license for the CPT and suddenly everybody will be advertising. It’s fear of the AMA’s legal department that is keeping this information secret at present. Alternatively, CPT could be deprecated and ICD-10-PCS (which carries no royalties) could be substituted.

          Currently the AMA does not give guidance and provide safe harbor to practitioners as to what the AMA considers fair use. Journalists should be hounding them for it as this locks up a great deal of pricing information. They should also be asking what a national license would cost. Neither of these things are happening.

    • Diggsc

      Wow, I sure wouldn’t want to be your kid, and have a serious illness.

      I think you missed the point of both this writer, and the writer from the Boston Globe. The fact that there’s little correlation between price/prestige and outcome doesn’t mean that it’s best to go where the cheapest price is. It is still always best to go where the good outcome is more prevalent, regardless of the price.

    • http://chicagoboyz.net/ TMLutas

      No, you can’t trust what you read in the Boston Globe. They weren’t predicting this outcome when the ACA was being debated, why should their predictions of future medical outcomes have any credibility?

      When your local doctor is stumped and nobody else can figure out what’s wrong with you that’s when you need those top line clinics. That’s when you need actual insurance because it’s very possible that this is when your catastrophic bills are going to start piling up fast. And this is exactly the point where obamacare style insurance fails you.

      Real insurance is lousy for paying predictable, small bills and great at dealing with the true emergencies, stuff you may never actually have happen to you but are devastating if they do. Obamacare gets this exactly 100% reversed.

    • grichens

      “…there isn’t any correlation between medical outcomes and hospital price/prestige…”

      Boston Globe’s strawman doesn’t acknowledge that restricting insurance coverage to within local networks limits a patient’s ability to optimize an outcome.

  • Diggsc

    Hope and Change, baby!
    Hope.

    And.
    Change.

  • Yisroel Markov

    Meanwhile, the tech industry keeps trying to help:

    “Israeli Invention May Spare Visit to Doctor”
    http://www.ynetnews.com/articles/0,7340,L-4443648,00.html

  • Terenc Blakely

    To quote Instapundit about Obamacare; ” It’s like peeling an onion of fail.”

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