Today’s Managing Health Care Costs Number is 11
Source. Researchers looked at exclusion of cancer centers in 11 markets. There was less exclusion in the other 7 markets, as enrollment remained small in 2014.
Researchers in JAMA Oncology have shown that narrow networks often exclude highly regarded cancer centers. This is a special challenge since these centers have been shown to have better outcomes for certain rare and even common cancers. In some cities, there are no exchange health plans that will offer patients access to the noted cancer center in town.
I’m a fan of narrow networks. The option of a narrow network with a high actuarial value plan (e.g. low out of pocket payments) is a better approach for many than having access to every hospital system with family deductibles in excess of $6000. But it’s deeply problematic to think that a patient with cancer would be excluded from getting care at the best site for her disease.
First – it’s clear why health plans are excluding high cost cancer centers. It’s not because the unit costs are high (and they are). It’s not because the health plans are evil (and they are not). It’s because no one wants to try to run a solvent health plan in a geography where every other health plan has excluded the name brand cancer center. Sure, the exchange health plans have some degree of risk adjustment (where the health plans that recruit healthier populations offer an effective subsidy to the plans that have adverse selection. But risk adjustment never works for the most expensive cases – and oncology often represents a third or more of the most expensive cases.
Researchers showed similar worrisome results for exchange plan coverage for HIV medication in Florida. Health plans ultimately entered a consent decree to stop putting all HIV drugs on higher priced tier. But it's easy to force coverage for medications to avoid positive risk selection - it's harder to force coverage for providers who already have high prices and high leverage.
Many have proposed a public policy intervention of requiring inclusion of cancer centers in all exchange health plans. This would eliminate the risk selection issue – since all health plans would then offer cancer care at the recognized center. However, these cancer centers already have very high market leverage and resultant high allowable unit prices. Requiring their inclusion in all health plans will remove any leverage the health plans have to keep a lid on prices.
There is one way this could work. If the cancer centers are required to be offered by all health plans, they will look a lot like a public utility. Utilities work – but they generally have regulated prices. There is no way the “market” can control prices – so if we want to mandate access for all to these centers, we will need another mechanism to control costs.
