Americans who are buying insurance plans over online exchanges, under what is known as Obamacare, will have limited access to some of the nation’s leading hospitals, including two world-renowned cancer centres.
Amid a drive by insurers to limit costs, the majority of insurance plans being sold on the new healthcare exchanges in New York, Texas, and California, for example, will not offer patients’ access to Memorial Sloan Kettering in Manhattan or MD Anderson Cancer Center in Houston, two top cancer centres, or Cedars-Sinai in Los Angeles, one of the top research and teaching hospitals in the country.
Experts say the move by insurers to limit consumers’ choices and steer them away from hospitals that are considered too expensive, or even “inefficient”, reflects the new competitive landscape in the insurance industry since the passage of the Affordable Care Act, Barack Obama’s 2010 healthcare law.
It could become another source of political controversy for the Obama administration next year, when the plans take effect. Frustrated consumers could then begin to realise what is not always evident when buying a product as complicated as healthcare insurance: that their new plans do not cover many facilities or doctors “in network”. In other words, the facilities and doctors are not among the list of approved providers in a certain plan.
Under some US health insurance plans, consumers can elect to visit medical facilities that are “out of network”, but they would probably incur high out of pocket costs and may need referrals to prove that such care is medically necessary.
The development is worrying some hospital administrators who see the change as an unintended consequence of the ACA.
“We’re very concerned. [Insurers] know patients that are sick come to places like ours. What this is trying to do is redirect those patients elsewhere, but there is a reason why they come here. These patients need what it is that we are capable of providing,” says Thomas Priselac, president and chief executive officer of Cedars-Sinai Health System in California.
One of the biggest goals of “Obamacare” was to make subsidised healthcare plans that are being sold on the new exchanges as affordable as possible, while also mandating that certain benefits, like maternity care, were covered and that people with pre-existing medical conditions could not be denied access.
Amid these new regulatory restrictions, says Tim Jost, a health policy expert, insurance companies have had to come up with new ways to cut the cost of their products. In this new era, limiting the availability of certain facilities that are seen as too expensive – in part because they may attract the sickest patients or offer the most cutting edge medical care – is seen as the best way to control costs.
“It’s like buying a Mercedes-Benz or a Chevy. You have to decide whether you want to pay for the highest product out there, which is probably pretty good quality, or the less expensive product,” Mr Jost says. “Everyone is in favour of competition until they see what it looks like. Then they think, maybe it’s better for someone else just to pay for the whole thing.”
Kathleen Harrington, who heads government relations for the Mayo Clinic in Minnesota, says that access to the famous clinic was initially limited in the Rochester, Minnesota area until officials at the healthcare exchange board in the state encouraged insurers to expand their network options.
While the Mayo Clinic will now be available on seven different plans offered by two different insurance carriers in Rochester, Ms Harrington says the long-term concern for the hospital is that intense focus on bringing down costs will hurt “centres of excellence” like Mayo that attract the most complicated medical cases in the country.
“I don’t think there is any doubt that a significant portion of the Mayo base are very sick patients. You don’t come here for primary care. We do treat the sickest of the sick. We do experimental treatment. This is where you come for innovative treatments for life threatening illnesses,” she says.
“If healthcare, the full spectrum from primary to top speciality care, becomes commoditised, it becomes a concern for the American healthcare system,” she adds.
When the Obama administration was asked whether the new healthcare exchanges were offering adequate network options to new consumers, a spokeswoman for the Department of Health and Human Services (HHS) emphasised that the new exchanges would “vastly increase” the access to medical providers to millions of uninsured Americans.
“Decisions about which private health insurance plans cover which doctors is a decision currently made by insurers and providers and will continue that way,” said an HHS spokeswoman.
The top lobby group for US health insurance plans, America’s Health Insurance Plans, said the new healthcare law brought “new costs” to the industry and that selecting hospitals and physicians that meet “quality standards” was one way of making health plans more affordable for consumers.
But Mr Priselac at Cedars-Sinai in Los Angeles says the creation of ever more narrow provider networks by insurers is being driven by price alone, and not by quality. He says the hospitals that are being excluded are leaders in innovation, which saves billions of dollars for the healthcare system in the long run.
“There is confusion between price and efficiency,” he says. “The major teaching and research hospitals are more expensive not because they are inefficient but because of what they do.”