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…
Baud
I’ve always wanted to ask how specialists are allocated to patients in single payer systems.
OzarkHillbilly
Speaking as the father of a couple cute kids, I never felt much leverage when I was battling with soulless bastards.
rikyrah
Uh uh uh ??
satby
And the locals will blame Obamacare for it; hell, they’ve probably been told that’s a cause. Because both the huge health systems and the huge insurers have learned it’s a perfect way to deflect blame for the extortion.
gene108
Would these hospitals accept what would have to be lower rates of compensation, if we switched to single-payer?
I don’t think we can do single-payer and maintain private for-profit reimbursement rates.
So hospital staff would be taking some kind of pay cut, along with people at pharmaceutical companies, device makers, etc.
Elizabelle
@gene108: It’s why they fight it so hard. But the highly paid medical specialists (and insurance executives) are grifting off the rest of us.
Europe shows a viable way. Lot of money pouring in to make sure we don’t hear about the good of other first world healthcare systems, just the problems.
Maybe with all the bullshitting Trump is NOT getting away with, unwoke Americans might wonder a bit about Obamacare and if it’s really as bad as the discrediting-themselves-more-every-day sources say it is.
Lee
As someone who has had to take their kid to the Children’s here in Dallas, I can certainly understand how they are going to win this battle.
The level of care provided at the hospital is far above anything I have seen elsewhere (think Mercedes E Class versus Ford Fiesta).
The hospital is well loved by the entire region. Another hospital wanted to rebrand its pediatric hospital to something that was almost identical to ‘Children’s’. IIRC, they changed it to something different not because of the lawsuit but because people said they would never step foot in any part of the hospital if they didn’t change the name.
From what I can tell the doctor’s around here love it as well. When our kid went it was ‘I have no idea what’s going on. I want to send her to Children’s. Is that ok? Good because their ambulance is already here to transport her’. We heard the same story from other parents.
Anonymous At Work
@Elizabelle: Former employee of SCH and someone who lives around pediatricians and pediatric specialists. So, let me say that the overwhelming majority of them would support single payer in a heartbeat. They’d grouse over the lost money but would rejoice over the healthier children, the fewer dead children, the saner and more relaxed parents. Going into a pediatric specialty means *knowing* that you will deal with suffering children. Very few do that for the money.
Lee
That’s why I could never in a million years do that job.
Ruckus
My understanding is that soulless bastards win every time. Aren’t they always the ones with the money?
dr. bloor
@Elizabelle:
Physician salaries are a small (maybe 10%ish) piece of hospital expenses. That cute kid’s medication costs likely dwarf his doctor’s annual salary.
Ruckus
@Lee:
Think about the positive outcomes. You can’t win them all but you can win. And while that might not make up for the ones you lose, winning is pretty damn good.
Barbara
The issue is this: Are you willing to pay two or three times what you need for a lab test or an x-ray so that if you come down with the 1 in a 1000 chance disease you can get the care that supposedly can only be provided at Children’s Hospital. (My pediatrician told me years ago that in her view most Childrens’ Hospitals overhype their uniqueness and that she would help me find specialists that were just as good at a local teaching hospital.) Many payers will spot you the “unique” out of network care at full charges at Children’s just to stop the daily bleeding of paying so much more for things that you can get anywhere. I used to be an idealist on this, and then I actually had something that supposedly required me to go to Children’s. And you know what? They are as soulless as the insurers. I left my insurance card at home and they would not even make an appointment for me until I had given them every scrap of payment information they wanted. I almost made myself drive the extra two hours to go to Charlottesville, Virginia, where the University of Virginia has the same specialists without the added humiliation. I chewed the lady out about the supposed charitable nature of Children’s, and that got me an appointment SO LONG AS I gave them my insurance information before I showed up. I don’t care who “wins” this.
Barbara
@dr. bloor: No, it’s not physician salaries. It’s the high premium that many Children’s Hospitals place on every kind of service — lab tests, x-rays, CAT scans, etc. that are available for far less elsewhere. Payers would gladly offer one of two solutions: match or at least approximate rates for the “ordinary” services and negotiate separately for those that make Children’s special, or have limited preferential status. Either of those would split the difference. If Children’s were truly unique they wouldn’t worry about this, because people would come whatever they charge. But they don’t, which is to say, they do have alternatives. Which is why Children’s tries to shamelessly exploit cute kids instead of being more reasonable in its financial demands.
Parfigliano
It’s Trump World…bet on souless bastard
dr. bloor
@Parfigliano: The “soulless bastards” did win–United patients no longer have in-network access to All Children’s. It’s a blip of bad publicity for them, but I’ll bet dollars to doughnuts that there isn’t a corporate benefits manager in Florida that’s going to let that drive their decision when they’re picking their plans for next year.
Just Some Guy
It’s happening to Children’s Hospitals and Clinics of Minnesota as well. The payer contract with Blue Cross expires this July and Blue Cross wants to cut their Medicaid payment rate by 31%. Blue Cross is requiring agreement on the 31% cut before they negotiate the rest of the contract.
Barbara
@dr. bloor: Is Children’s unique? Where I live, there are three Children’s Hospitals within a three hour drive (one three hours, one approximately one hour, and the local one around 30 minutes). There is also Fairfax INOVA, which basically offers every service under the sun and is closer than any of the Children’s facilities, MCV Hospital in Richmond, and UVA Hospital in Charlottesville. And that’s not counting GWU and Georgetown and Howard and myriad other hospitals in suburban Maryland, all of which have specialized pediatric care. People routinely go to the JHU Children’s Hospital for ophtalmology, for instance, because it is even more specialized than CNMC. The only point I am trying to make is that many people wrongly assume a uniqueness for Children’s that is not actually justified. Sometimes it might be, but often it is not.
Lyrebird
@Ruckus: Thanks Ruckus!
Maybe I missed it, but what I don’t see yet in the discussion is the estimation for how much will be saved in later health-care costs for kids with *treatable* rare conditions where going to the specialist (for our family at least) can make an enormous difference.
Four surgeries instead of 12, less chance of later complications, ..that stuff sounds like it would matter in the cost equation as well as in the hearts of the families involved.
Barbara
@Lyrebird: Good point. The problem is that when dealing with rare diseases it’s almost impossible to quantify those sorts of things because outcomes are too variable. It’s also the case that what really perturbs insurers about children’s hospitals is that they use the “rare” events to justify jacking up the prices of ALL services, rare and non-rare. Whatever money is saved in future costs for the relatively few children whose illnesses fit the category of rare diseases is speculative compared with the known outlays that can double or triple what the insurer could expect to spend elsewhere for non-rare services. One of the reasons why American medical care is so expensive is that we excuse our built-in high expense way of doing things by pointing at the rare and outlier events that we are “best in the world” at treating. That “outlier comes first” mentality is why it’s more possible for people to get treatment for cancer than chronic conditions. It’s an inherent weakness and I have been around long enough to see plenty of similar games being played by Children’s and academic medical centers. I bet a lot of payers would rather put the family up in a hotel at a hospital with equivalent capacity and better rates.
dr. bloor
@Barbara: You seem to be under the mistaken iimpression that I’m somehow pitching for Children’s here, which I’m not. I don’t have a dog in the fight, and the comments by the respective PR people in the article are, predictably, so vague as to be useless in making a determination of who’s being (more) unreasonable here.
My first comment was simply directed at the “grifting doctors are killing healthcare” canard, which simply isn’t true. If every American doc was willing to work on the pay scale of a Walmart greeter, we’d still be in serious shit. My second comment was simply to point out that however big an edge doctors and hospitals have in the “trust” department, walking away from Children’s and the like aren’t going to affect United’s bottom line at all. Those unhappy parents are customers without purchasing power.
Bitter Old Scold
Caregivers (nurses, aides, technicians, physicians) can be kind, efficient, empathetic, incompetent, or burnt-out and how you or your loved ones are treated can be pleasant or unpleasant according to the luck of the draw. Hospital executives, with extremely rare exceptions, should be first up against the wall when the revolution comes, as they are such hypocrites about how their institutions don’t grub for money as much as anyone else in the healthcare system.
Barbara
@dr. bloor: Okay. I agree that while some doctors might be grifters, the vast majority are not.
Bobby Thomson
I’m feeling very cynical that any children have any leverage. Incredibly horrible behavior is rewarded these days. I’ve pretty much lost any hope that Americans will ever do anything big in the public interest ever again.
Bobby Thomson
@dr. bloor: I don’t believe you.
dr. bloor
@Bobby Thomson: It’s not a matter of belief, it’s called “data.” Interestingly enough, some folks have compiled that data.
Uwe Reinhardt also has some thoughts on the matter.
BruceJ
@satby: Actually we just had a similar fight between United Healthcare and Northwest Hospital here in Tucson; I don’t believe the word ‘Obamacare’ was mentioned once in the fracas; it felt more like when the cable company and local affiliates get into one of their periodic ‘contract discussions’ and the next thing you know the World Series might not be on teevee or something, but someone eventually capitulates and agreement is reached.