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Originally published Sunday, November 3, 2013 at 5:27 PM

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Children’s dispute muddles insurance deals

The dispute between Seattle Children’s Hospital and Premera should be settled by the insurance commissioner next year, argues The Seattle Times.


Seattle Times Editorial

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I love the, "We Are The "Best" So Pay Us DOUBLE" attitude displayed... MORE
Why should Premera be forced to pay Children's TWICE AS MUCH for a simple tonsillitis p... MORE
I actually think this is pretty cool progress in making costs matter. Childrens has... MORE

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THE Seattle Children’s Hospital dispute with Premera opens the unsolved puzzle of Obamacare: cost.

Children’s is a full-service hospital delivering top-flight specialty care. It treats kids, many with serious problems: cancer, cystic fibrosis, seizures, hemophilia, etc. For some of its services, no other hospital in the state provides care. For some families, access to Children’s medical experts and care is crucial.

Children’s tends, by the nature of its patients’ challenges, to be more expensive.

The plans Premera is selling on the state-etablished exchange for 2014 will cover only those services of Children’s that no other hospital offers. Treatments other hospitals do offer — for pediatric appendectomy, asthma, tonsillitis, nausea, etc. — typically cost twice as much at Children’s, Premera says. And to keep the cost of insurance down, those will be done somewhere else.

Children’s says the kids it serves are typically sicker than at other hospitals, and that those patients need full access to the hospital’s specialists and resources. The hospital has filed a complaint with an administrative law judge demanding that Insurance Commissioner Mike Kreidler, who approved the Premera and Lifewise insurance plans, remove them from the exchange.

As a way to negotiate a last-minute concession, this is a burn-the-bridges tactic. If removal actually happened, some rural counties would have no coverage available — or no coverage that included independent physicians. Without Premera and Lifewise, there would be no individual coverage for sale.

Children’s is arguing, in essence, that the market requires it in every plan in the state. No doubt it would be best if Children’s were in every plan. But the insurers are supposed to negotiate costs with hospitals, and it is unclear how that can work if one hospital is declared to be indispensable.

Kreidler is trying to square that circle, and good luck to him. Next March, his office will define the minimum network of doctors and hospitals required for a plan that will have to be sold in 2015. In the meantime, the plans on the exchange are all lawful. People in the market for coverage should choose carefully the plan that fits their needs.



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