AHA and WellPoint CEOs Square Off on Hospitals’ Role in Rising Healthcare Costs

In an unusually direct and public confrontation, the CEO of the American Hospital Association took the CEO of WellPoint, the nation’s largest health insurer, to task for saying hospitals cause healthcare inflation during an interview with the opinion editor of the Wall Street Journal.

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Firing off a letter to the WSJ, AHA CEO Rich Umbdenstock said WellPoint CEO Angela Braly’s assertions are a “disservice to the women and men who work in America’s hospitals.” He noted that WellPoint should talk about making money on healthcare, having earned $2.7 billion in the last three months of 2009.

In the interview, Ms. Bray said, “Hospitals come in and ask for major increases. They come in and say, you know, we need a 40 percent increase. It would blow your mind, the difference we start with in some of these negotiations.”

She added, “Why does that procedure cost $10,000 in this place and down the street it costs $1,000? And when the hospital that’s getting paid $10,000 is asking for a 40% rate increase, you have to say, why?”

Mr. Umbdenstock wrote that Ms. Braly’s assertion that hospitals “are at the root of America’s rising health bill is offensive and ignores the facts.”

He added, “Improving the affordability of care will take an effort by everyone — insurers, hospitals, businesses, physicians, nurses, employers and individuals. Hospitals are committed to doing what it takes. Too bad Mrs. Braly would rather point fingers.”

Read the letter from AHA CEO Rich Umbdenstock (pdf).

Read the WSJ’s interview of WellPoint CEO Angela Braly.

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