By Molly Mulebriar
If hospital contracts include an annual escalator clause, whey then do these contracts need to be renegotiated every two or three years? An average escalator clause assures an annual increase in reimbursement from 4-6% or more. Isn’t that enough?
The answer is simple: If you are a hospital it’s not in your interests to negotiate a new contract to earn less since your payer has already agreed in the past to pay more, year after year. Hospitals have accomplished more through classical conditioning than Pavlov would have ever dreamed.
Payers have been well conditioned to react appropriately when the harpist plays an irresistible siren. One salivates while the other writes the checks.