By: Dr. Fran MacMillan – Sept. 2014
Did you know that If you live in Massachusetts, and have an HMO health plan, your plan has been getting a whole lot more restrictive regarding your ability to get care outside of the network of hospitals and physicians that are determined by your primary care doctor’s network affiliation.
Since about 2009-2010, Massachusetts based health plans have been transferring the insurance risk to these networks, most of which consist of groupings of hospitals and physicians. Network development and consolidation of hospital and physician groups has been accelerating mostly behind the scenes. Some networks are anchored by the large academic medical centers in Boston, some are large group practices. Most networks are hospital centered or led by hospitals.
Hospitals perform a necessary public good. They often provide 24/7 emergency services, convenient and centralized outpatient and inpatient care, imaging, laboratory, surgical services, obstetrics etc. Hospitals are almost always among the largest employers in any community, especially the smaller communities, and therefore have political power and considerable clout. Whether for profit or non-profit, I can’t tell the difference except the former pays taxes and the latter doesn’t. Everything else is focused to the bottom line, which is driving as much business to the center, and preventing “leakage” of business to others outside the network. This is the fundamental flaw, and why, in my opinion, the reason that the network model will ultimately fail.
Your doctor has a duty to act as your advocate, your fiduciary, and in your best interest. The network’s’ fiduciary duty is first to themselves. Without trying to be overly critical, the networks can’t provide the healthcare services if they don’t make enough money to keep the lights on and the buildings heated. But they clearly have a public mission, and employ many of our friends and neighbors. They also control the flow of an enormous amount of dollars in our state, have to satisfy multiple constituencies, and consequently they can create corrupting incentives, carrots and sticks that affect you in ways that you don’t even realize regarding your health care choices.
Especially in the HMO environment, your primary care doctor is your guide to all of the healthcare that you may need. He or she also knows your medical history, your preferences, and often has well established relationships with specialists, and knows how to navigate through the big city medical centers when needed. Like all other physicians, I like to refer complex problems to people that I know well, that communicate well, and who treat the people I send to them with respect and with their problems properly addressed. We are indeed fortunate to have outstanding healthcare in New England, with truly world class academic medical centers. There however is no one network that has the top expertise in all areas. Sending someone into town blindly because an in network provider is available is not what I would want if I were sick. Relationships matter.
Our health care system is being corrupted by financial incentives that push patients to self select into restrictive networks.
Employers are being squeezed by being offered insurance products that provide discounts, or more accurately, slower cost increases by restricting access. Workers who contribute to their health insurance through payroll deductions are facing exactly the same pressures. Increased mandates on what the government considers to be “necessary” coverage also exert the cost pressures that support restrictive networks. Hospitals are financially at risk for services that go out of network, and are not at all incentivized to perform services in lower cost settings such as doctors offices, free standing MRI and imaging centers, commercial laboratories and ambulatory surgery centers, when they lose the extra fee that insurance pays to have it done in a hospital setting. Physician practices are squeezed when they pay out of their own pockets, the cost of a patient going out of network. Is it any wonder that there has been a dramatic and rapid consolidation of network hospitals and physician groups to ensure survival, but at increasing cost and restricted choices?
Twenty years ago, the public stood up to similar trends and resistance built to the point that the restricted care regime fell apart. The insurance companies struggled, regrouped, changed. The business climate in Massachusetts has evolved considerably since the 1990s. Many of the large local employers have been purchased by out of state interests. They no longer buy their insurance products locally. Rather, they buy from the large national insurers because they need to offer products that appeal to and cover their employees in more than one state, leading to more adverse risk selection by the locally based insurers. There is no easy answer to this mess, and it is indeed a mess, but I can state with certainty, that the forces favoring consolidation also favor monopoly pricing, downward pressure on supply, and restriction of consumer choice. We can do better than to accept that status quo.
Frank MacMillan, Jr, MD, FACG
Dr. MacMillan specializes in Gastroenterology and Liver diseases, is a Fellow of the American College of Gastroenterology and it’s Massachusetts Governor. He is Vice President of the Massachusetts Gastroenterology Association. Dr. MacMillan is a native of North Andover and practices Gastroenterology in Haverhill at Holy Family Hospital at Merrimack Valley, where he currently serves as the Chief of Medicine. He has also been a member of the North Andover Board of Health since 2007.