MD Anderson Among Top Hospitals Excluded From Obamacare Coverage [UPDATED]

obamacareJust recently, the University of Texas MD Anderson Cancer Center was announced as one of an elite group of six cancer research and treatment centers throughout the world who will participate in an ongoing collaborative effort to fast-track the advancement of cancer treatment development as part of a new GlaxoSmithKline initiative. It is just one in a series of many examples of how MD Anderson is the preeminent cancer research and treatment center in the United States, if not the world.

According to a new report in the Financial Times, new healthcare plans are being nudged by the statutes of the Affordable Care Act, otherwise known as Obamacare, so that they will exclude in-network coverage for patients to visit top cancer hospitals for advanced therapy — including MD Anderson — when the plans go into full effect next year.

Under the new healthcare plans, a cancer center like MD Anderson will not be included as part of the choices within patients’ covered networks. Instead, visiting MD Anderson for cancer treatment would be “out-of-network,” meaning that very little of the cost would be covered by insurance; most would come out of pocket.

According to the FT report, the shift by insurers to exclude coverage to top treatment centers has everything to do with the new statutes handed down by Obamacare, which seeks to balance costs through what critics see as rationing of care and limiting choices for patients:

“One of the biggest goals of ‘Obamacare’ was to make subsidized healthcare plans that are being sold on the new exchanges as affordable as possible, while also mandating that certain benefits, like maternity care, were covered and that people with pre-existing medical conditions could not be denied access.

Amid these new regulatory restrictions, says Tim Jost, a health policy expert, insurance companies have had to come up with new ways to cut the cost of their products. In this new era, limiting the availability of certain facilities that are seen as too expensive – in part because they may attract the sickest patients or offer the most cutting edge medical care – is seen as the best way to control costs.”

The Obama administration has moved aggressively to characterize this lack of coverage as the fault of insurance companies, and that Obamacare in an of itself has not dictated that top research and treatment centers explicitly be excluded from plans that conform to the law’s new rules, with an HHS spokesperson noting that, “Decisions about which private health insurance plans cover which doctors is a decision currently made by insurers and providers and will continue that way.”

Yet, industry experts explain that, because new Obamacare statues have constrained healthcare insurers’ ability to maintain profitability, the only recourse is to narrow healthcare networks to include only the most cost-effective providers. Because of this, top cancer centers like MD Anderson, whose healthcare prices billed to insurers — and ultimately patients — are higher due to its faculty of world-renowned researchers and medical practitioners, are too expensive to include in networks.

Supporters of Obamacare have sought to portray these research institutions’ price points less as a result of their excellence, and more because of institutional inefficiencies. However, Thomas Priselac, president and chief executive officer of Cedars-Sinai Health System in California, explained to the FT, “There is confusion between price and efficiency,” adding, “The major teaching and research hospitals are more expensive not because they are inefficient but because of what they do.”

Ronald DePinho, M.D

Ronald DePinho, M.D.

While Obamacare is already facing the prospect of the so-called “death spiral” in striking a balance in solvency with the risk of the healthy, young “invincible” generation rejecting the coverage, thus hyper-inflating healthcare costs for the rest of Americans, the risk of reducing revenues to research and treatment centers such as MD Anderson is that Americans could lose access to critically important specialized treatments, as well as experimental research that in necessary in continuing to advance new treatments and possibly cures for deadly diseases such as cancer.

Dr. Ronald DePinho, CEO of MD Anderson, offered what can now be seen as a prophetic set of comments on this issue back in May, when he said in a candid memo to the institution: “We can’t run the institution at an operating loss, especially at a time when the health care field faces external challenges from implementation of the Affordable Care Act, the budget sequester and continuing federal deficits. If we don’t make changes now, we potentially will find ourselves in a crisis that will force us to take drastic measures that could hurt our ability to meet our mission.”

If this was Dr. DePinho’s position in May, certainly it has sharpened in the months since the rollout of Obamacare.

[UPDATE 12/9/2013 1:15pm CST: An MD Anderson spokesperson issued the following statement to the press in response to the Financial Times article:

“All patients deserve access to top tier cancer care. MD Anderson and the nation’s other top cancer centers play a key role in the fight against cancer, and particularly aggressive forms of the disease or rare cancers where expertise is limited to only a small number of facilities worldwide.

In addition, our country’s leading cancer centers help bring down the cost of care for all patients by conducting research that leads to new and better treatments, better cancer fighting strategies and increased efficiencies that lead to cost savings. This knowledge is shared among all cancer care providers to benefit patients in the US and beyond our borders.

While every cancer  patient may not need to come to  MD Anderson, we believe both insurance providers and our health care system must work together to ensure patients have that option so that all of us have the best chance of beating cancer.” ]

About Mike Nace

Mike Nace
Mike Nace is the Editor-in-Chief of BioNewsTexas. He regularly covers corporate and political news pertaining to the Texas biotech sector.
  • keith

    Obamacare doesn’t hand down statues. Proofread before publishing!

    • Mike Nace

      Thanks for helping us improve the article, Keith. Your help is greatly appreciated!

  • Jenna Otto

    My brother lost his fight with Cancer and he had the help of MD Anderson. I can only imagine how much less time we would have had if he was unable to benifit from the minds at MD ANderson. I am so saddened to read that this health care system that was supposed to help people like my brother wil NOT be able to any more because of the all mighty dollar that the insurance companies “need”.

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