Hospitals Suing over Exclusion from Obamacare Exchanges

In order to contain the costs of providing health care services to higher risk consumers, insurance companies have been forced to exclude certain health care providers from the Obamacare exchanges. In particular, “pricey” academic hospitals are left out of the new health care program and some are retaliating.  

Seattle Children’s Hospital has filed a lawsuit against the insurance commissioner in Washington state for being excluded from the exchanges.  “It is unprecedented in our market to have major insurance plans exclude Seattle Children’s,” said Sandy Melzer, senior vice president.

In New Hampshire, Frisbie Memorial Hospital “took legal action against an insurer that excluded it from its marketplace plans, and in Missouri, consumer advocates successfully lobbied an insurer to add a children’s hospital after it unveiled a plan that lacked one.”

But insurance companies are choosing cheaper health care options over quality of care because they are forced to provide care for more patients. 

For example, a pediatric appendectomy at Children’s costs about $23,000, he said. At another community hospital, the cost is closer to $14,100. Melzer said his hospital often bills more than community hospitals for comparable procedures because the children it treats are often gravely ill, so even a routine tonsillectomy may be more complicated.

The “experts” are claiming that community hospitals provide the same care as the pricier academic hospitals.  “Academic medical centers are valuable because they are the only place to get certain specific treatments, but they provide a lot of care that is routinely provided in community hospitals that do it very well at a cheaper cost,” said Paul B. Ginsburg, president of the Center for Studying Health System Change. But are those specific treatments covered if they are necessary? It’s unclear. 

Top hospitals like Cedars-Sinai and the Mayo Clinic are excluded from the exchanges because “in most cases, the decision was about the cost of care.”

If the government forces insurances companies to provide care to consumers regardless of the imminent or potential cost, the only option is to prioritize cost of service over quality. Will the public accept this “anything is better than nothing” health care situation? We’ll see when they are denied specialized treatment to stay alive in the name of cost control. The administration is trying to place the blame for this on “greedy” insurance companies for restricting health care options, but there is simply no way for a business to provide expensive, specialized services on the cheap. 

The blames lies not with the insurance companies (although they jumped on board and supported the program, they had to know the consequences) but with the fundamental nature of nationalizing health care. Death panels may not be far off. 


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