The missing connection

The lead anecdote in a story about tiered network health plans in Monday’s Boston Globe omitted one potentially key fact.

According to the story, Glenn McCarthy of Weymouth needed surgery to deal with an aggressive form of prostate cancer. He had the choice of making a $1,000 copayment and having the surgery done at Brigham and Women’s Hospital in two weeks, or he could wait more than a month for an opening at Faulkner Hospital, where he was being treated, and pay a copay of just $150. His surgeon advised against a delay, so McCarthy opted for the higher-tier hospital with the higher copayment.

What the story didn’t mention – and what McCarthy didn’t know, according to his wife – was that both hospitals fall under the same corporate umbrella, Partners Healthcare System. In essence, both tiers were controlled by the same company.

Paul Levy, the former CEO of Beth Israel-Deaconess Hospital, said originally in his blog and then in an interview that the relationship between the two hospitals raises questions about the appearance of conflicts of interest. He said hospital networks – those with affiliations and those owned by the same parent company – may have found a way around the increasing use of tiered health plans that penalize higher-priced hospitals by pushing patients into less-costly facilities through higher copays and deductibles.

“Where there is the potential for a conflict of interest that would cause a patient to have to spend more money for the same service, it would seem to me to be incumbent on the hospital system that it would be presented clearly to the patient so they can make an informed decision,” Levy said in a phone interview.

Tiered networks break health care providers into groups based on quality and cost and help reduce premiums by requiring patients seeking care at higher-cost facilities to pay a greater share of those costs. About 15 percent of health plans in Massachusetts are tiered. In the state’s Group Insurance Commission, which covers all state employees and a growing number of municipal workers as well, 30 percent of employees are covered by a tiered plan.

Tracy McCarthy (her husband was working and could not be reached) said she wasn’t aware of the affiliation between the Faulkner and the Brigham and said no one from either hospital talked to them about cost or potential scheduling alternatives.

“We were told that we didn’t have time to wait,” Tracy McCarthy said. “We didn’t think we had any other options.”

Rich Copp, a spokesman for Partners Healthcare, dismissed questions about a potential conflict of interest and said all care decisions are based on the health of the patient. He acknowledged, however, that the health care evolution is putting pressure on hospitals to make transparent the entire decision-making process around care.

“We are seeing a health care environment that is evolving with different insurance products being introduced,” said Copp, who pointed out he could not comment directly about the McCarthy case because of privacy concerns. “Perhaps what is needed is a health care dialogue to better understand these products. I don’t think we would ever want to see the day in which insurance products or financial incentives take precedence over the best interest of the patient’s health (but) Partners and other providers are also taking a look at what’s the best approach. Decisions like this right now are made between the patient and the doctor.”

McCarthy’s surgeon could not be reached for comment.

Blue Cross spokeswoman Tara Murray said tiered networks are gaining in popularity because of the cost savings, but she noted the networks still allow patients the choice to be treated at more expensive facilities at their own expense.

“[Patients] have to wrestle with the fact it’s going to cost more money if they choose a higher-tier hospital,” Murray said. “The copays are designed to incent a thought process around quality and cost. Members still get a choice but it costs them more out-of-pocket. It costs the health care system less.”

Murray said hospital networks and affiliations are not the issue when it comes to tiering. “I don’t think they try to hide it,” she said. “Why does it matter? It’s not unusual for hospitals to have affiliations with one another.”

Levy says it might matter if administrators are steering patients to a higher-tiered hospital and failing to explore cheaper options. For example, he asks, could the procedure have been done more cheaply at another lower-tier hospital other than Faulkner? Or, since the surgeon operated at both hospitals, could he have put pressure on the administration at Faulkner to rejigger the operating schedule to get McCarthy in sooner if time was, indeed, of the essence?