Skip to Content

The one where Blue Cross Blue Shield Association calls the kettle black

Health insurance companies love to project their problems — and deflect their blame — onto health systems for high costs. We’re not taking the bait.

Almost anyone can relate to or identify with the terms, ‘projection’ and ‘deflection’ — the experience of projecting your thoughts, feelings, and insecurities onto another person, and deflecting the blame away from your mistakes and onto their actions.

Blue Cross Blue Shield (BCBS), one of the nation’s largest health insurance companies, is a master at projection and deflection. Case in point: BCBS Association just released a white paper, “Affordability solutions for the Health of America.” The cleverly drafted argument cites the Health Care Cost Institute’s 2020 Health Care Cost and Utilization Report, which found that between 2016 and 2020, health care prices increased approximately at double the rate of general inflation, with prices being the primary diver of higher health care spending.

First, recent data suggests otherwise. Second, guess what their number one recommendation is to improve the affordability of healthcare? Improve competition among providers.

That’s right — the white paper cites increased health costs “as a result of reduced competition among doctors and hospitals.” It notes, “The trend of big hospitals and health systems acquiring physician practices often results in gaming reimbursement to maximize revenue.”

Talk about a load of projection. As it turns out, three-quarters of insurance markets are “highly concentrated” – and BCBS is the biggest player in 40 out of 50 states.

While “increasing competition” might sound like a reasonable solution, the reality is that big hospitals aren’t running smaller ones out of business like BCBS would like you to believe.

Running a hospital is expensive. Hospitals are required to stay open 24/7 and are staffed by highly trained professionals. It takes hundreds of clinicians, nurses, physical therapists, X-ray technicians, assistants, social workers, and maintenance staff just to keep a hospital safe and functional. The reality is that smaller (often rural) hospitals simply can no longer operate among fewer, sicker patients (in rural areas), high labor costs, and low reimbursement rates.

Now, let’s talk deflection.

Health insurance companies love to deflect the blame onto hospitals for high hospital prices. It seems reasonable, right? If insurers are supposed to pay for their members’ care, then they have a vested interest in making said care more affordable.

But deflecting the blame to hospitals for high costs also gives them an excellent cover for their profits. Insurers often say the reason they have to raise their premiums and/or shift costs to employers are the high hospital prices. Meanwhile, insurers are raising premiums while shifting costs to employers, all while making record profits. It’s a convenient deflection, especially for BCBS, whose operating revenue was $38.5 billion in the second quarter of 2022, a 15.6% increase in revenue from the prior year quarter.

In other words – the issue isn’t a lack of hospital competition. The issue is insurers are squeezing as many dollars out of the healthcare ecosystem as possible and funneling them to shareholders, while blaming hospitals all the way to the bank.

Original Article:

Subscribe to Un-covered Essentials

Insurer policies limit coverage and disrupt patient care, while producing record profits for corporate shareholders. Stay informed with the Un-covered newsletter.