Why Hospitals Charge Auto Insurance, Workers’ Compensation Patients Much More Than Health Insurers

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Insurer market power matters in hospital pricing. Patients with automobile, workers’ compensation, and other non-conventional commercial insurance plans paid much higher prices than patients with HMO/PPO health insurance coverage for hospital services in Florida, new research confirms.

A new Johns Hopkins University hospital costs study, published today in the October issue of Health Affairs, shows a growing gap between the rates paid by public and private insurers and a growing gap between the rates paid by the different types of commercial insurers for hospital services between 2010 and 2016.
The median price paid by HMO / PPO health insurers at 153 private hospitals in Florida has increased from 1.9 times more than the contribution paid by the Medicare program. The median cost paid by automatic insurers and other non-traditional commercial insurers has increased from 2.8 times to 3.8 times the Medicare rate in the same period.

Lar Since automobile insurers and other non-traditional commercial health insurers cover relatively few patients, they negotiate very little with the hospital. Hospitals are in a dominant position that unilaterally determines the price,, says Ge Bai, professor of accounting at the Johns Hopkins Carey Business School.

Gerard Anderson is a professor of health policy and a professor and director of the Johns Hopkins Hospital Finance and Management Center.

He pointed out that arı people with auto and workers compensation insurance should be particularly careful about which hospitals they choose to look for, as prices in some hospitals may be very high. O

N The high prices paid by private insurance are the main reason why health care in the United States is more expensive than in other industrialized countries, “says Anderson.

According to the Medicare Payment Advisory Commission’s March 2018 report, the paper says that payments by health insurance insurers are about 50 percent higher than those made by Medicare. This paper shows that rates are higher for other insurance companies and vary significantly between hospitals.
”Large hospital systems make use of market forces to make them pay more for non-traditional commercial insurance companies, Bai Bai says. According to the study, 20 Florida hospitals owned by the Tennessee-based Hospital Corporation of America were accused in 2016 of 7.8 to 14.1 times the Medicare rate.

(A statement at the end of the paper acknowledges that Bai had served as an expert witness to the applicants in a class-case case against HCA-affiliated hospitals.)

Nontraditional commercial insurers generally pay the prices closely associated with each hospital’s chargemaster prices, which are high prices as the starting point for bargaining, Medicare remittance, private health insurance reimbursement, competition for various products and services, regardless of competition. or other factors.

”The Chargemaster prices are about prices that patients and insurers will pay with very little bargaining power,“ says Bai. ”This is especially bad news for people covered by automobile insurers and other non-traditional commercial insurances, and it is even worse when you think that the turmoil prices determined by hospitals have increased steadily over the last decade.“

To address the issue at the heart of the study, Bai says policymakers, hospitals and insurance companies should take action to limit the lowest price that affects insurers to the minimum bargaining power. Or If market forces do not create a reasonable price for these patients, policymakers should step in to address the failure in this market, “he says.

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