Because Avera and Sanford can’t get along, going to the doctor is about to become a bigger pain the keester for thousands of South Dakotans. Sanford is pulling out of the DakotaCare network, meaning that, as of January 1, 2017, folks with DakotaCare (including 12,000+ state employees) will have to put up their own cash to visit Sanford hospitals and clinics.
Right now, DakotaCare and Wellmark are the only health insurance providers that includes the two market-dominating hospital chains, Avera and Sanford, in their coverage networks. Both Avera and Sanford offer additional insurance plans, but Avera’s plans don’t include Sanford providers in their network and vice versa.
Last year, Avera bought DakotaCare. So right now, Avera owns a plan that provides coverage at Sanford facilities. Free-market tension ensued:
Earlier this year, Sanford officials say they approached Avera about extending access to Sanford Health Plans to Avera physicians, a move that would have created a third broad network plan in the state and one that would have put Sanford on an equal footing with Avera’s DakotaCare plan. But Avera countered with a proposal that Sanford buy an equity share in DakotaCare.
Paul Hanson, the executive vice president of Sanford Health, said Sanford balked at Avera’s proposal based on philosophical and regulatory concerns. Hanson said he didn’t think it was realistic for two competing health systems to own an insurance company, and he said the move might have raised anti-trust problems with the two owning a single insurer [Jonathan Ellis, “Sanford to Leave DakotaCare After Negotiations with Avera Fall Through,” that Sioux Falls paper, 2016.08.23].
Hmm… maybe it’s not realistic for any health system in South Dakota’s sparse health care market to own any insurance company. If two oligopolizing health care providers are going to leave us with only one broad health insurance network, the market is failing us. The public option—the recommendation from President Obama and candidate Clinton that we offer Medicare to citizens under 65—is now all the more warranted in underserved South Dakota.