Marin Independent Journal

Faceoff between major insurer, health system shows hazards of consolidat­ion

- By Annie Sciacca

For weeks, more than half a million Anthem Blue Cross enrollees who receive health care from the University of California were held in suspense. It wasn't clear whether they would have to find new doctors or switch plans as the health system and one of its largest insurance partners struggled to reach agreement on a new contract.

UC Health accused Anthem of not negotiatin­g in good faith, while Anthem leaders retorted that UC Health had demanded too much and rebuffed the insurer's request for administra­tive efficienci­es. In fact, roughly 8 million Anthem members in California were at risk of losing in-network access to UC Health's vast network of prestigiou­s hospitals and medical facilities, which could have left them with much higher out-of-pocket expenses. While not all patients were made aware of the situation, Anthem notified some enrollees they would be reassigned to new primary care doctors if no deal were reached.

But even as the parties announced an eleventhho­ur agreement on Feb. 5, industry analysts say the conflict has become part of a trend in which patients are increasing­ly caught in the crossfire of contract disputes. Amid negotiatio­ns over rising labor and equipment costs, it's often patients who are ultimately saddled with higher bills as the health industry continues to consolidat­e.

“This type of contract dispute is a routine feature of the health care system,” said Kristof Stremikis, director

of market analysis and insight at the California Health Care Foundation. “At the same time, from a patient's perspectiv­e, it's an unfortunat­e feature of our health care system because it creates uncertaint­y and anxiety.” (California Healthline is an editoriall­y independen­t service of the California Health Care Foundation.)

Stremikis noted that as mergers occur in the health industry, patients are left with fewer choices. Any time there are disputes, disruption­s are felt more widely. And such fights rarely result in lower costs for consumers long-term across California.

A KFF analysis found widespread evidence that consolidat­ion of health providers leads to higher health care prices for private insurance. The same brief from 2020 found some evidence suggesting that large, consolidat­ed insurance companies are able to obtain lower prices from providers, but that has not necessaril­y led to lower premiums for patients. And a 2022 report from the California Department of Health Care Access

and Informatio­n found that health care costs have grown “at an unsustaina­ble rate,” and noted that between 2010 and 2018 “health insurance premiums for job-based coverage increased more than twice the rate of growth for wages.” State regulators also found that health plans spent nearly $1.3 billion more on prescripti­on drugs in 2022 than in 2021.

In trying to slow growth, California in 2022 set up an Office of Health Care Affordabil­ity, which has proposed a 3% spending growth target for the industry for 2025-2029. But enforcemen­t will start in 2028 at the earliest, using spending data from 2026.

Cathy Jordan, 60, a social worker in Yuba City, California, has been a patient at UC Davis Health for two decades. Jordan was diagnosed at the end of 2021 with aggressive small cell carcinoma, a rare form of cancer. She has undergone surgery, chemothera­py, radiation, and other treatments since then, yet her cancer has returned twice.

“I don't have the luxury of time — my cancer comes back fast,” Jordan said.

She is among the group of Anthem-insured patients at UC Health who were at risk of losing access to innetwork care there, and when she got a notice from Anthem, she grew alarmed, she said.

Jordan's oncologist, Rebecca Brooks, said in an interview prior to the agreement being reached that it would be “incredibly disruptive” for cancer patients to have to switch providers in the middle of their treatments.

“It's a detriment to their care,” said Brooks, director of the gynecologi­c oncology division at UC Davis Health. “It's going to disrupt treatment and cause worse outcomes.”

Jordan said she appreciate­s that UC Davis Health has a National Cancer Institute comprehens­ive cancer center designatio­n; the only other cancer center of that caliber in Northern California not part of UC Health is at Stanford University, several hours away in Santa Clara County.

Jordan was worried that she and other UC Health patients would have to compete for treatment elsewhere. She was also uncomforta­ble with the idea of adjusting to a new setting and routine while undergoing intensive medical treatment.

“Someone needs to say, `We need to think about these patients.' Someone needs to step up and say, `What's going to be best for our patients?'” Jordan said. “This is my life.”

Stremikis said such concerns are ever more urgent as the health care industry consolidat­es. UC San Francisco recently announced

 ?? ANNE CHADWICK WILLIAMS — KFF HEALTH NEWS ?? Cathy Jordan, a social worker in Yuba City, has been a patient at UC Davis Health for two decades.
ANNE CHADWICK WILLIAMS — KFF HEALTH NEWS Cathy Jordan, a social worker in Yuba City, has been a patient at UC Davis Health for two decades.

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