For nearly a year now, Cliff and Karen Fischer have glimpsed the future of health care. They are not thrilled with the view.

In recent months, the Clinton administration and Governor Roy Romer have unveiled plans to correct health-insurance woes. Although different in some respects, both strategies rely on a form of bidding for medical services as one means to control soaring costs.

Such bidding, on a smaller scale, already is a standard practice within health maintenance organizations and preferred provider organizations. These companies frequently negotiate exclusive contracts with hospitals and other providers in exchange for discounted prices.

Many experts expect the strategy to become much more widespread as various national and state health-care-reform plans seek ways to slash medical costs. To patients who have run into kinks with the discount-pricing-for-exclusive-contract system, however, such reforms are not necessarily good news.

Just ask the Fischers.

Cliff and Karen Fischer knew that their daughter, Michela, had a bad liver soon after she was born. But the organ didn't become a real issue until last winter, when the ten-year-old broke three bones in a matter of weeks. Although they hoped the fractures were just the result of normal childhood roughhousing, the Fischers suspected that Michela's brittle bones were a symptom of her bad liver.

The family's fears were confirmed at Children's Hospital, where Michela had been receiving checkups and treatments since 1984, when the Fischers moved to the Denver area from Dallas. After a battery of tests, the doctors said the time had come for a liver transplant. "They told us the transplant was not a matter of life and death, but rather a quality of life issue," Karen recalls. "Still, there were a lot of reasons not to wait too long."

Soon after the evaluation, Cliff, a 37-year-old engineer at Martin Marietta, called his insurer, Cigna HealthCare of Colorado, to ask how the operation would be paid for. In order to have the insurance company cover the entire cost, the Fischers were told, they would have to stay "in-network"--that is, bring their daughter to one of three "LifeSource Organ Transplant Centers" preselected by Cigna to do transplants. Their choices of centers: Los Angeles, Cleveland or Omaha.

Although the family was pleased with the Cigna representative's helpfulness, they balked at leaving behind the fine care that Michela had received at Children's. "We wanted to get the transplant done here," Karen explains. "We thought, one, it would be easier on the family; and, two, we were familiar with the doctors here. They knew Michela; they'd worked with her for her whole life. We had confidence in them."

She adds, "When you go in to see a doctor one time every three years, you don't care who your physician is. But when you're putting your kid's life in their hands, you care a lot."

Children's Hospital is a well-established, if young, transplant center. Although the hospital didn't begin doing liver operations until 1988, it has since allied itself with University Hospital and become the busiest pediatric transplant facility in the Rocky Mountain region, according to David Avrin, a hospital spokesman.

As a result, the Fischers were confident when they approached Cigna with the possibility of staying in Denver for the operation. But they quickly learned that the penalty for leaving the Cigna network was high: The insurance company would garnish a percentage of Cliff's salary each year until the out-of-network deductible of $5,300 was covered. Worse, if Michela were to suffer future complications, the deductible would have to be paid each additional year she needed treatments as a result of the operation.

Not willing to give up, the Fischers say they offered to pay the deductible for one year if Michela could have the operation done at Children's. Next, the family enlisted the help of Children's Hospital itself, which Cliff says offered to lower the cost of the operation and subsidize post-operative costs. (Doug Pascal, a financial administrator at Children's, says he can't recall details of the hospital's offers. Generally, Avrin says, "we attempted to negotiate a payment arrangement with the insurance company.") Cigna, however, would not budge.

Kathy Gies, health service manager for Cigna HealthCare of Colorado, explains that the company selects transplant sites based on various medical factors, including how many operations it performs, patient outcomes and satisfaction rates. She adds that, while Cigna currently is evaluating Children's Hospital for inclusion, the Denver hospital nevertheless remains out-of-network.

In addition to evaluating a hospital's track record, of course, Cigna also negotiates a lower price for volume business, adds Wendall Potter, Cigna's director of corporate relations in Hartford, Connecticut. He declines to discuss details of the price breaks Cigna enjoys in exchange for exclusive contracts with its LifeSource centers. But he assures that "the discount is not the overriding consideration. Our overall objective is to make sure that the quality of care is the best."

Indeed, says Karen Fischer, Cigna "made you feel like they were looking after your best interests." She adds, "They said it's not just the money." In April, the Fischers decided to trundle Michela off to Omaha.

The decision didn't seem bad at the time. Karen's parents lived in Omaha, and Cliff's family wasn't more than two hours away. Even after Michela's initial two-day visit at the end of April, during which the Nebraska team concurred with Children's recommendation for a transplant, the Fischers had no qualms about their choice.

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