Some health systems and health insurers have decided it makes sense to team up. It means the entity that owns the hospitals and employs the doctors also sells and manages health insurance to pay for it.
A case study of the possible harms for consumers is playing out in Pittsburgh, where both UPMC and Highmark sell medical care as well as health insurance.
A dispute between the two means that, beginning in June, people in the Pittsburgh region who have Highmark health insurance won’t be able to use most UPMC doctors and hospitals.
It highlights a distressing potential that has arisen as health systems and health insurers unite: that people won’t have access to the local hospital that’s best for their situation, or the closest one, just because they have the wrong health insurance.
It’s a growing possiblity. In the Harrisburg region, for example, UPMC now owns a half-dozen hospitals. If it chose, UPMC could decide to accept only UPMC health insurance, or refuse to accept certain insurers, such as Highmark or Capital Blue Cross. While people could receive care there no matter what, UPMC could charge them higher, out-of-network prices.
Likewise, Geisinger, owner of Geisinger Holy Spirit, has a health insurance arm, meaning Geisinger could do the same.
Now, state Sen. Jay Costa plans to introduce a bill that would require health systems to contract with all health insurers.
If they couldn’t come to an agreement on reimbursement rates, they would have to resolve the situation through arbitration.
Also, it would prevent a dominant health system from demanding “unreasonable rates for services from insurers,” according to a news release from Costa, who is the Senate Democratic leader and who represents the Pittsburgh area.
Costa as of this week was circulating a memo explaining the problem and seeking sponsors for a bill.
His bill is first aimed at preventing the pending Pittsburgh-area divorce of UPMC and Highmark, which owns the Allegheny Health Network of hospitals and doctors.
But Costa notes the potential for such disputes involving health systems such as Geisinger, which is the dominant health system in many Pennsylvania counties.
“Integrated delivery networks” is the term used to describe health systems that also have a health insurance arm, or vice versa.
“Health care consumers should not have to worry about whether their insurance will be accepted when they’re sick, injured or simply seeking preventive care. Their only worry should be getting healthy. This legislation can relieve that stress and establish consistency for integrated delivery networks,” Costa said in the news release.
