Nevada Hospital System Adopts Cost-Plus Reimbursement

We received a call this morning from an actuary firm in Nevada informing us that one of their clients, a hospital system, has agreed to accept cost plus 12%  reimbursemet from all local political subdivisions whose insureds seek treatment at the hospital.

Details to follow.

Editor’s Note: In Texas we know of five (5) hospitals who have adopted the Cost Plus approach for their own self-funded employee benefit plans. We also know of several hospitals who have agreed to accept Cost Plus insureds and are happy to earn a 12% profit margin. And, recently, we have learned of one major hospital system who has agreed to accept Medicare +35%. This is encouraging to traumatized consumers who have been pounded with ever increasing health care costs, year after year, despite representations from PPO networks who tout “superior discounts” for their clients. – look up hospital’s cost to charge ratio here. 

   We have learned that the reason the hospital system agreed to Cost Plus 12% is because the same system has contracted with a few local  payers on a flat per diem of $1,800 for both medical and surgical admissions, with no outlier. They will earn more under a Cost Plus 12% contract.