Dominant Hospital Systems Appear To Be Driving Community Healthcare Costs.

Modern Healthcare (11/19, Evans, subscription required) “Private insurers pay significantly more to some hospitals than others within the same market and hospital prices vary widely across the US, a new study found.” The Center for Studying Health System Change “analyzed hospital rates as a percentage of Medicare rates across eight markets and results suggest some hospitals have market clout to raise rates.” The study “also found variation in outpatient payments for seven of the eight markets.”

        The Milwaukee Journal Sentinel (11/19, Boulton) reports that the analysis “looked at hospital and physician rates and was based on data from insurers Aetna, Anthem Blue Cross Blue Shield, Cigna and UnitedHealth Group. The markets were Milwaukee; Cleveland; Indianapolis; Los Angeles; Miami-South Florida; Richmond, Va.; San Francisco; and rural Wisconsin.” The health insurers included in the study “paid rates ranging from 167% to 333% of what Medicare pays for inpatient care and from 234% to 439% for outpatient care in the Milwaukee area.”

        The NPR (11/19, Rau) “Shots” blog reports, “The work by the Center for Studying Health System Change used actual insurance payments from four large insurers and benchmarked them against Medicare payments to take into account differences in cost of living and wages.” The results appear to “support the argument that some high-priced hospitals are getting the upper hand with insurers,” and “builds on previous work of the author, Paul Ginbsurg, making the case that regions with a few powerful hospital systems are able to negotiate much higher rates than places with a lot of competition.”

        The Indianapolis Star (11/19, Rudavsky) reports that Anthem’s Dr. David Lee pointed out that the presence of several “dominant hospital systems” only served “to really drive up the cost of healthcare for the entire community.”

        The Wall Street Journal (11/19, Mathews, subscription required) “Health Blog” reports that the American Hospital Association has called the analysis “too deeply flawed to be a usable policy tool,” and says that the various methods used by each insurer to generate the study didn’t definitively show that hospitals wield the clout to affect insurance rates.

        Modern Healthcare (11/19, Evans, subscription required) reports that AHA president and CEO Richard Umbdenstock called the analysis “at best, unreliable” in a prepared statement.