Into the Mind: The Obamacare coverage conundrum

You've had a year of dealing with the Affordable Care Act. Any surprises?

Probably the biggest surprise that affects children's hospitals also affects cancer centers, academic medical centers — the development of narrow networks through the federal health insurance exchanges.

They're a little bit different from what we've had in the past. You always had an out-of-network benefit. You paid more if you went out, but you had insurance coverage. For the first time, we're seeing products where if you go out of the network, you have no coverage whatsoever.

Why did this happen?

The major goal of the federal government was to have affordable coverage. They put tremendous pressure on the insurance companies to have low premiums. The way they did it was these narrow networks. I heard a health insurance executive say it may be a narrow network with very few providers, but it's better than nothing, which is what you used to have. I thought that was very cavalier.

How are patients affected?

Academic medical centers, children's hospitals, cancer centers, because they're high tech, tend to be expensive. To the extent you only utilize them for the high-end services through out-of-network coverage, everything is fine. But when you go to the step of saying that you just can't go to the Arizona Cancer Center or M.D. Anderson because they're excluded from the networks, it's a very big problem for a lot of patients.

We see about 20 patients a day that are referred to our specialists that we can't treat because their parents selected insurance that excludes Phoenix Children's and our physicians group.

The children that come through our emergency or are transferred from other hospitals, we have to treat. Then we've got to figure out how we're going to be paid for out-of-network coverage. With a lot of negotiation and hand-wringing, we tend to get paid. But it causes tremendous anxiety for the parents and families that are going through major crisis.

What happens to those 20 children a day?

If they're in a service that's only provided by Phoenix Children's, like cardiac care, then we take them on and go to battle with their insurer for out-of-network coverage.

If it is something that can be handled by a community provider that is in their network, such as tubes in the ear or tonsils, they're referred to that provider. Our goal is not to saddle people with a lot of out-of-pocket expenses for services they can get in the community.

Without a solution, what's the impact on children's hospitals?

Most of the low acuity work will go to community hospitals, leaving us with an increasingly complex, high-cost group of patients. We look at our costs by severity. Our costs for low-acuity work is very much equivalent to the community. But some of the things we do, artificial hearts, you start getting into that nature you get very high-cost cases.

Is there a danger that an institution like yours could go out of business?

There's always a chance of that. That said, I'm not worried per se about going out of business. I'm very worried about the impact on families.

Is there anything good in the ACA?

There have been positives. The elimination of pre-existing conditions as a curtailment of your insurance is a big deal, particularly for children with chronic illnesses.