What Happens When Hospitals Buy Health Insurers?

When hospitals buy health insurers, the plans offered have higher premiums — and 70 percent of the additional premium cost is not attributable to higher quality care, according to a report from The New York Times.

Although consumers rated hospital-offered insurance plans as higher-quality than other plans, researchers have been unable to find any evidence showing a correlation between the higher premiums and superior benefits, according to the report.

Because there is limited data to analyze, there has been little research done concerning the hospital-offered insurance plans. The one major study directly related to hospital-insurer integration with quality and premiums was published in the journal Health Services Research shows the integration may be bad for consumers, but "more work needs to be done in this area," said Austin Frakt, PhD, health economist in healthcare finance and economics at VA Boston Healthcare System, in the report.

It would be costly to gather and analyze data concerning hospital-offered health insurance plans, but antitrust regulators and health economists believe the research is necessary to address the effects of these plans on healthcare quality and costs, according to the report.

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