AT ITS MOST basic level, the pending divorce between Children's National Medical Center and the region's biggest health insurer, CareFirst BlueCross BlueShield, is a human story, and an alarming one to many area parents. About 21,000 children visit Washington's premier pediatric facility each year as patients covered by CareFirst. Hospital officials estimate that some 5,000 of those are patients who need repeat visits and who will have trouble finding elsewhere the kind of care they need: children on chemotherapy, children who need multiple surgeries, children with spina bifida who need to see multiple specialists. At a minimum, the hospital wants to work out a way for such children to continue using the facility with CareFirst reimbursement. A CareFirst official said his company is open to that but believes there are only "a handful" of patients who will be unable to find equally good care at other area hospitals.
Lest this sound just a tad unsympathetic, CareFirst officials hasten to add that they have nothing but the interests of their customers at heart. They couldn't come to a deal with Children's, they said, because Children's charges too much; and if CareFirst doesn't hold the line, rates go up for everyone and health insurance becomes less affordable. Maybe so. We're in no position to judge CareFirst's claim that Children's prices are out of whack, nor Children's competing claim that its charges for premier pediatric care are in line with other children's hospitals around the country.
It is within our ability, though -- and within the responsibility of regulators in Maryland and the District -- to wonder whether CareFirst's tough negotiating stance and exquisite concern for its own bottom line have anything to do with its intention to transform itself from nonprofit to for-profit and sell itself to a California-based company, WellPoint Health Networks Inc. The proposed sale has already caused controversy because of the excessive compensation CareFirst executives planned to lavish on themselves when the sale was consummated and, more broadly, because of fears of how the newly for-profit company might behave.
Maryland Insurance Commissioner Steven B. Larsen said he will include the Children's stalemate as a subject at a previously scheduled hearing this week and will ask whether there is any connection to the proposed sale. The sale will go through only if CareFirst can demonstrate a certain level of profitability. Profitability improves if you squeeze hospitals -- and it improves even more if some of your sickest customers end up having to turn elsewhere for insurance. Maybe that's not what is happening here. But Mr. Larsen and other regulators are right to inquire.