Are insurer contract disputes ‘business as usual’?
A recent Becker’s Payer Issues article rounds up eight recent disputes between health plans and hospitals — from Maine to Mississippi, Colorado to Georgia, and many states in between.
Can you guess the key players involved? Yup: UnitedHealthcare (United), Anthem, Aetna, Humana, and Blue Cross Blue Shield (BCBS).
While we’ve done a few of these round-ups ourselves (and added our own two cents), Becker’s lets the cases speak for themselves, sans commentary. Fine, but it’s an approach that we think leaves quite a bit of context missing.
Is this level of dispute — one that “can affect thousands of people and their ability to access care,” as Becker’s notes — normal? (Obviously not.) Or, is this evidence of increasingly aggressive behavior by insurers that only services to pad their bottom line as rural hospitals struggle to survive? (Obviously yes.)
On the one hand, contract negotiations are in fact business as usual. Negotiating networks has been part and parcel of our healthcare industry for decades, and it can mutually benefit both sides. Hospitals need patients, so they agree to provide discounts to insurers to be “in network” with the insurer.
On the other hand, for years, contract negotiations were conducted behind closed doors. And while negotiations require some give and take, more recently these negotiations are becoming more public, more hostile, and/or have ended without a resolution, ultimately putting the burden on patients to deal with the fallout.
The fact that contract negotiations span wildly from system to state and are not restricted to a single insurer, state, or patient population makes nothing about this process “normal,” or sensible for that matter. Rather, negotiations are market factor-agnostic, similar only in approach and outcome.
Further, insurers seem to have the lion’s share of the market during these negotiations. According to a MedCity News article regarding an American Medical Association (AMA) report released this fall, “About 73% of health insurance markets are highly concentrated, and in 46% of markets, one insurer had a share of 50% or more.” In other words, insurers increasingly have the upper hand.
The result? Insurance companies have more leverage to demand unfairly low prices. And the hospitals are put between a rock and a hard place – take less than the care is worth, or nothing at all. Typically, health plans cover little to none of the care provided at out-of-network hospitals.
And with insurers like United and Blue Cross Blue Shield of North Carolina (BCBSNC) reporting quarter after quarter of record profits, we can’t help but think these efforts aren’t business as usual — but targeted strategy to amass profits, all while making healthcare harder to access.