Limited health networks raise the ire of snubbed hospitals

Two new lower-cost health offerings offer proof that ‘the ground is shifting’ in N.H.’s health insurance market

Valley Regional Hospital is in Claremont, a city with a 15 percent poverty rate and the lead plaintiff in the lawsuit against the state over the adequacy of education funding in New Hampshire.

So it should be no surprise that Valley Regional CEO Peter Wright was riled up after he learned that Anthem Blue Cross and Blue Shield in New Hampshire didn’t approach the hospital to be on the network of providers it put together for its offering on the new health exchange.

The network was deemed by state officials as providing adequate statewide medical coverage. But, asked Wright, if the exchange is supposed to attract the uninsured, “and we have some of the highest level of private pay in the state because they don’t have insurance, why not reach out to the major provider in this community?”

Wright answered his own question: “It’s an attempt by a for-profit to seek the most lucrative market and avoid what doesn’t accrue to its earnings.”

Nevertheless, Wright’s assertion is being echoed at Upper Connecticut Valley Hospital in Colebrook and hinted at by Frisbie Memorial Hospital in Rochester, two other hospitals left out of the network Anthem put together for its exchange offering in 2014 – which, if it is approved at the federal level, it will begin marketing on October 1.

But Paula Rogers, a lobbyist for Anthem, rejected that accusation. “That’s a highly disturbing suggestion,” she said, pointing out that Concord Hospital, Portsmouth Regional Hospital and Parkland Medical Center in Derry are also off the list. “Clearly there has been no discussion of such a thing. We developed a narrow network.” And that network, she said, “could have been more narrow,” but Anthem “exceeded the rules.”

She said a narrow network will bring down costs by giving Anthem a stronger hand in negotiations with the participating hospitals. That, she said, will help attract uninsured residents to the network.

Narrow networks are not new – they were part of the original health maintenance organization game plan. Some HMOs involved only a few hospitals and a limited number of doctors, but they were billed as a cost-cutting alternative in providing health coverage.

As HMOs got bigger, and competition fierce, accessible networks became the selling point, and soon nearly everybody was in a network.

‘Sustainable health system’

“Everybody understands that the ground is shifting in a fundamental way,” said Alex Walker, senior vice president for operations and strategic development at Catholic Medical Center in Manchester.

Indeed, four days after Anthem unveiled its network, Harvard Pilgrim Health Care, Dartmouth-Hitchcock Medical Center and the Elliot Health System put forward their own limited network, called ElevateHealth.

That partnership will serve the group market at first, differentiating it from Anthem’s health exchange plan for individuals, but both Harvard Pilgrim and Anthem hope to move into the other market, albeit with a different group of hospitals.

ElevateHealth’s three founding institutions would divvy up the pool of premiums and split them three ways. The savings claims are more modest than Anthem’s – about 10 percent off the premiums of similar plans – and the deductibles will be high, ranging from $1,500 to $5,000 a year.

The “sustainable health system” will consist of “taking care of people,” “value, not volume” of patients, and a new shared-risk “payment model,” said Dr. James Weinstein, president and CEO of Dartmouth-Hitchcock.

“This has never been done between a payer and two provider systems,” said Weinstein. “It will change the landscape in the way we live that needs to be changed.”

ElevateHealth’s 3,000-provider network, which is ready to go into effect on Dec. 1, is currently even more limited than Anthem’s, concentrating on the southern tier of the state, the Upper Valley and other areas, such as Keene, Derry and New London. There will be no provider network in half the state’s 10 counties.

Concord Hospital has declined to participate, but the Dartmouth-Hitchcock clinic in Concord will.

CMC in Manchester and St. Joseph Hospital in Nashua say were not approached to participate, though they have worked closely with Dartmouth-Hitchcock and Harvard Pilgrim in the past. Southern New Hampshire Medical Center in Nashua, which was left off the Anthem network, signed on.

But because ElevateHealth is being marketed alongside other plans and may yet enter their territories, hospital officials aren’t as concerned about it as they are by the Anthem health exchange plan.

Anthem’s health exchange plan is the only one offered at this point under the Affordable Care Act, meaning that those with individual policies, as well as those in the assigned risk pool, will simply be moved to the Anthem network.

The population that will get insurance on the exchange is an uncertain mix. They could be uninsured sick individuals or healthy people who choose to buy health insurance rather than pay the federal penalty for not having it, or there could be those refugees from the group market — if employers, as some threaten to do – cancel their health benefits in response to the ACA.

There are about 160,000 uninsured individuals in New Hampshire, but one study estimated that only 70,000 people will end up on the exchange, including those already with individual coverage. Small groups (those under 50 employees) might do so as well, though nobody expects many to join this year.

‘A travesty’

No matter what the numbers, hospitals are upset at being left out of Anthem’s health exchange network.

“We need every patient,” said Alvin Felgar, CEO of Frisbie Memorial in Rochester. “We have the worst payer mix on the Seacoast.”

Felgar’s disappointment is not restricted to lost revenue. He remembers hearing President Obama claim that no one will have to switch their doctor because of the ACA, but many of Rochester’s primary care physicians work for the hospital. That means those with individual plans will have to switch their doctor or dig deep into their pockets.

“So once we get the details, it’s not true,” Felgar said. “That’s a travesty. It is no mean feat to change doctors.”

In addition, there are all those uninsured patients who have been showing up at his door in the past. If they go on the exchange, they will be insured. “We would finally be able to collect something from these people,” he said, “but they will be going somewhere else.”

Felgar said he approached Anthem about participating. “We have the lowest rates on the Seacoast,” he said. “It’s quite baffling that a major player won’t talk to us.”

Felgar, unlike Wright at Valley Regional, won’t offer an opinion why. He saved his major criticism for the state.

“Where is the fairness here? Where is the insurance commissioner? How could they let this happen? We don’t have to be in the network, but to not even ask us?”

The previous Republican-controlled Legislature rejected the idea of New Hampshire forming its own state-controlled health exchange, so the federal government essentially has oversight, although it is clear that it is deferring to the states.

“CMS (the Centers for Medicare and Medicaid Services) will rely on state analyses and recommendations when the state has the authority and means to assess issuer network adequacy,” the agency said, though the agency could overrule them if it doesn’t come up to the state standards.

CMS would not comment on Anthem’s plan until it is officially approved. The state, however, has had no problem with the coverage offered.

“Anthem has met our adequacy standards. Our regulations set a floor for minimum access. We have never required carriers to sign on every hospital in the state,” said Deputy Insurance Commissioner Alexander Feldvebel.

Travel time

The state’s standards call for 90 percent of the population to be within 15 miles or a 40-minute average driving time of primary care providers and 45 miles or 60 minutes’ travel time for most specialists.

According to Google Maps, Frisbie is 16 minutes from Wentworth Douglass, in Dover, which is part of the Anthem network, and Valley Regional is 23 minutes to New London and a half-hour away from Dartmouth Hitchcock Medical Center, both of which are on the network.

“We don’t have a public transportation system,” Wright said. The result, he said would be that many people on the exchange will wind up after hours in the hospital emergency room – which defeats the whole purpose of the ACA, he added.

Traveling distance is even more of a problem in the North Country. Indeed, Anthem added two North Country hospitals – Androscoggin Valley Hospital in Berlin and Littleton Regional Hospital – because of criticism that the only area hospital it had previously signed up, Weeks Medical Center in Lancaster, did not have a maternity center.

Anthem didn’t approach Upper Connecticut Valley Hospital in Colebrook to participate. Upper Connecticut Valley’s chief administrative officer, Charlie White, said his hospital is “the smallest in the state with the largest coverage area.”

Upper Connecticut Valley is about an hour from Weeks and an hour and a quarter from Berlin, and the population to its north, in towns like Pittsburg, are another 45 minutes away. That means travel time for some residents to the closest hospital in the Anthem network would easily exceed state standards. But only 90 percent of a hospital area’s population have to meet those parameters, and the Colebrook area is a very sparsely populated area. The town of Colebrook has fewer than 1,400 residents.

Selective networks make sense for urban areas where there are two hospitals in a city, “but not in a rural areas where there is limited access,” he said. And they certainly don’t make sense when there is no competition, he added.

“The purpose of the exchange is to provide consumer choice,” he said. “Where New Hampshire went terribly wrong is that there is no consumer choice – you take it or leave it.”

White suggested that the North Country wasn’t going to take it. Hospitals in the area are thinking of teaming up with Dartmouth-Hitchcock to either form their own network or work with ElevateHealth.

If so, it seems, the war of the networks would then begin in earnest.