Contract Negotiations Between Insurers, Hospitals Increasingly Acrimonious

Main Category: Health Insurance / Medical Insurance
Also Included In: Primary Care / General Practice
Article Date: 23 Nov 2006 - 14:00 PDT

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The AP/Arizona Daily Star on Monday examined how contract negotiations between insurers and hospitals increasingly have "taken an ugly turn" as both sides work to control rising costs. Insurers "are under pressure to lower premiums to win business," while hospitals believe that insurers are "skimping on payments to boost their earnings," the AP/Daily Star reports. Insurers also maintain that providers have not cooperated with efforts to tie payments to quality of care. Les Funtleyder, an analyst at Miller Tabak, said, "As costs go up, the pain threshold is staring to be met. Maybe we are just reaching some kind of a tipping point." According to the AP/Daily Star, "[s]everal recent battles" between insurers and hospitals have involved HCA, which is going private in a leveraged buyout. Earlier this month, HCA and UnitedHealth Group reached a nationwide agreement, although some hospitals in Denver and Florida were excluded from the insurer's network for two months during the negotiations. HCA has not reached an agreement with Las Vegas-based Sierra Health Services over whether to renew a contract that expires in December. According to the AP/Daily Star, "[d]eclaring a winner in these brawls is difficult." Paul Ginsburg, president of the Center for Studying Health System Change, said, "It isn't clear whose power is growing in the market. Maybe these showdowns are an attempt to sort it out." Meanwhile, experts say the "ultimate losers may be the patients, who have to adapt to changing networks of doctors and hospitals," the AP/Daily Star reports (Agovino, AP/Arizona Daily Star, 11/20).

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