According to The Washington Post, the Health Affairs journal released a study explaining the lack of a fight put up by insurance companies when it comes to negotiating costs with medical providers. Small practices are teaming up with larger practices, and larger practices are joining hospitals to raise their own profits, and insurers are not raising an eyebrow.

The study states: “Interviews in twelve US communities indicated that so-called must-have hospital systems and large physician groups—providers that health plans must include in their networks so that they are attractive to employers and consumers—can exert considerable market power to obtain steep payment rates from insurers.” (Berenson, Health Affairs)

Due to the pressure of losing a major hospital as a client, insurance companies have not countered these actions or expressed any desire to do so. The threat of losing a reputable hospital or in-network provider is too much for the insurers to argue with, so they are complying in large numbers.

“A large hospital can make itself a “must-have” for a health insurer’s network and demand higher reimbursements, while an insurer might decide it can live without the smaller hospital down the street.” (Kliff, WonkBlog)

Will insurers stand up to the providers and hospitals? Or do they need an insurvention? This could scare off many policy-holders, those shopping for insurance coverage, and change the face of health care.



About B. Somers

B. Somers is a contributor to Health Insurance News, focusing on medical coverage, carriers, health reform and the conflicts surrounding insurance. Writing for the company's sites has provided a strong introduction to health insurance, and the opportunity to gain knowledge in the insurance industry.