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EDITORIAL: Anthem's coverage change is foolish



Anthem 10.4

In a heavy-handed attempt to cut health care costs, Indianapolis-based insurance giant Anthem will no longer cover outpatient medical imaging and scanning at hospital facilities, which includes MRI and CT scans.

To the Editorial Board, this policy is an attempt to alleviate symptoms of a diseased health care system without addressing its root cause. 

Anthem’s Blue Cross Blue Shield subsidiary released a similar policy change earlier this year that denies emergency room visit coverage for non-emergency reasons. Both policies combat 70 percent to 150 percent higher hospital prices by incentivizing patients to instead visit primary-care physicians and independent imaging centers. 

Health care costs nationwide are also highly variable. For instance, the amount paid for hospital-based MRI of lower-limb joints varies by a factor of 12 to one across the country. 

Anthem’s insurance constraints push for a more unified pricing system, and many insurers nationwide are likely to follow suit. This would potentially outsource non-emergent lab testing, surgery and other procedures to more specialized and cost-efficient independent facilities. 

While this policy will not affect coverage of X-rays or mammograms, it could require patients to shoulder the financial burden of in-hospital MRI and CT scans unless a review deems it to have been medically necessary to be performed at the hospital facility.  

At the same time, many insurers, including Anthem, are discontinuing certain Affordable Healthcare Act plans and raising the price of their coverage plans, likely in response to an uncertain health care system destabilized by President Trump’s attempts at reform.

Anthem’s policy will be a severe financial blow to hospitals, some of which receive more than half of their profit from imaging services, and may force them to raise the costs of hospital imaging procedures. 

Hospital radiology departments are usually staffed around the clock, meaning that reducing hospital income will likely necessitate price increases or budget cuts from other areas of the facility.

The Editorial Board worries that Anthem’s actions do little to improve quality of care and may cause patients to hesitate and delay receiving necessary health care. Furthermore, independent imaging centers may be unable to handle the volume of incoming patients redirected from hospitals. 

In a Modern Healthcare article, Scott Wallace described the policy as "such a blunt instrument." "All it does is add dramatically to the bureaucracy of medicine instead of daring to find a more subtle and more flexible mechanism" to reduce costs, Wallace wrote.

Some, however, applaud Anthem’s efforts. Hospital mergers have created monopolistic systems that enable these facilities to charge higher prices without competition from now non-existent nearby facilities, and health care constitutes about 18 percent of the United States' gross domestic product — more than twice the OECD average and 6 percent more than any other nation. 

Incentivizing lower unified costs may help reduce this health care spending and break up hospital monopolies without requiring antitrust legislation, and the Editorial Board acknowledges these potential advantages. 

However, if similar policies are put in place, hospitals will be forced to change when and how they provide care. Though insurer actions may prove to be effective at standardizing health care prices, the most efficient and effective way for this to take place is to allow the government to regulate pricing. 

The policy will only be administered in areas in which there are at least two alternate freestanding imaging centers nearby, meaning individuals in rural areas that may not be able to travel to distant independent imaging centers could still rely on their local hospital. The policy will be enacted in 13 of the 14 states Anthem operates, including Indiana, by March 2018. 

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