Tensions between employers and hospitals advance by driving transparency

Employers who offer health insurance coverage closely analyze hospital price data to get better rates for their employees, which leads to tension with hospitals.

Hospital spending made up the largest share of national health expenditures at $1.3 trillion in 2020, and employers paid most of the nearly $409 billion in spending by private insurers, according to another data From the Centers for Medicare and Medicaid Services.

Data showing employers pay hospitals much more than Medicare does, which has led to employers paying hospitals to rein in their prices. Employers’ health plans and health insurers are now required to advertise their negotiated rates with hospitals, adding new pressure on employers to get the best rates to cover their employees. This has led to friction between hospitals and businesses, as the clash between employer groups and hospitals in Indiana shows.

“As we continue to make this information public, employers are taking it in,” Marilyn Bartlett, a policy fellow at the state’s National Academy of Health Policy, said in an interview. “The more transparency we come up with, the greater this setback.”

Five hospitals leave Indiana’s employer group

In Indiana, where Rand Corp. is located. Reports Gloria Sachdev, president and CEO of EFI, said in an interview that employers pay some of the highest costs in the state for Medicare, five Indiana Employer Forum hospital systems have left since 2020. Hospitals say they are not leaving EFI because of reports but because EFI She pushes for policies that hospitals think are too heavy for government control.

EFI started Rand Reports in 2017 with funding assistance from Arnold Ventures and the Robert Wood Johnson Foundation, and reports have consistently shown that employers across the US are, on average, paying 200% more than what Medicare pays hospitals.

Sachdev author An opinion piece for the Indiana Business Journal in May about RAND findings showing Indiana employers paid the fourth-highest hospital rates in 2020 with 329% of Medicare rates, and the fourth-lowest prices for physician services at 126% of Medicare rates. It urged the state legislature to implement price ceilings for inpatient and outpatient hospital services.

Since 2020, Parkview Health in Fort Wayne has left EFI, followed by the Community Health Network in 2021, the hospitals that have ranked among the most expensive in the state, Sachdev said. In 2022, Indiana Health University, the state’s largest hospital system, as well as the Franciscan Alliance and Ascension EFI will leave, she said.

Sachdev said pricing transparency studies have led health insurer Anthem to renegotiate Parkview Health’s contacts.

Sachdev said the hospital’s exits cut EFI dues by $50,000, less than 5% of its budget.

“Defending Affordability”

“They are not satisfied with the policy’s work because we advocate affordability and the results of the RAND studies,” Sachdev said, referring to hospitals’ reaction to EFI. “We are committed to price transparency.

Sachdev said the EFI called for policy changes in the state legislature, which helped win passage of legislation limiting surprise billing, blocking foreclosure clauses under which providers and insurers agreed not to disclose negotiated rates, and requested well-intentioned estimates of fees. . But EFI’s efforts to prevent hospitals from charging more for services performed in hospitals than they would be charged for the same service at a doctor’s office stalled after hospitals returned, she said.

On July 1, health insurers and employer-sponsored health plans were required to publish all of their health care data on rates negotiated under the Coverage Transparency Rule (RIN 1545-BP47), Sachdev noted. “Price transparency is here. “They just need to hug her,” she said of the hospitals. “Employers and business coalitions will use price transparency more and more in the future.”

Brian Tabor, president of the Indiana Hospital Association, said in an interview that Indiana Hospitals has not left the EFI because of the RAND findings. EFI استشهد was cited study In most Indiana hospitals in September 2021, it found that the average score for meeting hospital transparency requirements was 6.72 out of 8, with 8 being the best score.

Indiana University Health and Parkview spokespeople said in emails that they left EFI primarily because they found the employer group was not making progress in improving health care in Indiana.

“All hospitals want to work more closely with their employers” to reduce costs and improve quality, Tabor said. However, he said, “The Forum is no longer an effective advocate in a collaborative way.”

Not about Rand.

“It’s not about Brand,” Tabor said of the hospitals’ decision to leave EFI. He blamed EFI for the “strict tone, and I would say a very narrow, if not singular, focus on hospitals as the only ‘problem’ in healthcare.”

Tabor, who has written an opinion, said specialty drugs and fast-growing drug prices are also an important part of healthcare costs. Piece In the Indianapolis Business Journal in July, he disagrees with Sachdev’s call for location-neutral payments in which the same amount is paid for a service or action regardless of where it is made.

He said there are “many sites of care located in disadvantaged rural communities across the state where it would not be economically viable to run a doctor’s office,” such as outpatient clinics that provide oncology services. “Because of the rates the government pays for these services, if you’re not part of the hospital, and subject to all the regulations and costs like those clinics if they’re hospital-based, these services can’t be provided.”

Tabor argued that Indiana’s low payments to physicians is a “distortion,” which “is not the hospitals’ fault. Hospitals provide subsidies to physicians because their salaries are too low by Indiana business payers.”

Tabor said EFI should use Rand and other data to help companies create tiered or narrow networks that give beneficiaries incentives to use high-value medical providers and establish direct contracting agreements between employers and providers. A Parkview spokeswoman said the hospital has executed healthcare agreements directly to the employer.

“The forum has gone from being an advocate of transparency to an advocate of more hawkish government solutions,” Tabor said.

Tabor also criticized Hoosiers for Affordable Healthcare, a group that advocates lower hospital rates in Indiana, of which Sachdev is vice president. Tabor said in an editorial July 1 in the Indiana Business Journal that H4AHC has partnered with EFI in “attacks on hospitals while simultaneously rejecting the transparency requirements of insurance companies.”

“All he wants to do is divert attention from the problem,” Hebbard, president of H4AHC, said in an interview. All of these hospitals have billions of dollars in banks that they just invest in the stock market, in private equity, in venture capital. The bottom line is that they are overpaying.” He said Indiana hospitals should lower their prices to the national average or lower.

hospital fact sheets The post on the H4AHC website shows fees for seven Indiana hospitals that are above average national hospital rates, as well as higher profits, cash and investments.

Houston group continues

Employer groups and hospitals are dealing with similar concerns in Texas.

Chris Scisack, executive director of the Houston Business Alliance on Health, said he reached out to area health insurers and hospitals in 2021, mostly to no avail, to discuss why hospital rates are higher compared to Medicare rates.

“There are a lot of drawbacks” on their part with regard to the price disparities between employer and Medicare, Scisak said. However, the alliance is in discussions with St. Luke’s Health, which is one of three large health care systems in the Houston area, he said.

Vivian Ho, chair of health economics at Rice University, sent a message July 18 before the Texas House Select Committee on Health Care Reform, showing lower profit margins in St. Luke’s in 2020 than other large systems. “Employers and their workers bear the financial burden of the high hospital prices that drive these profit margins,” she said.

Douglas Lawson, CEO of St. Luke’s Health, said in an interview that labor costs have gone up dramatically over the past two years due to the Covid-19 virus, which “has put a lot of pressure on us on the price side being more thoughtful and, quite frankly, careful about what we’re negotiating with. payers community.

Lawson has written a book Article – Commodity In the Houston Chronicle on July 3 it said, “Patients receiving care at St. Luke’s Health System, including Baylor St. Luke’s Medical Center, are paying the most affordable rates in the area.”