How Florida's HCA-dominated for-profit market affects insurance payments

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In 2016, nearly a fifth of commercial insurance payments for the 20 highest-priced hospitals in Florida came from casualty, workers' compensation and travel insurers, according to a study published in the October 2018 issue of Health Affairs.

The 20 hospitals with the highest prices in 2016, which charged commercial insurers between 7.8 and 14.1 times the Medicare rate, were affiliated with Nashville, Tenn.-based HCA Healthcare. While a relatively small number of patients were covered by casualty, workers' compensation and travel insurers at the hospitals in 2016, they still represented 24 percent of commercial net revenue for those hospitals, according to researchers with Baltimore-based Johns Hopkins University.

For their analysis, the study authors analyzed hospital prices paid by commercial health plans and those paid by casualty, workers' compensation, liability and travel insurers from 2010-16. What they found is commercial health plans saw medium prices increase from 1.9 to 2.5 times the Medicare price within the study period. At the same time, the other insurers saw median prices increase from 2.8 to 3.8 times Medicare rates.

While the consolidation of commercial health plans can lower prices among hospitals, other insurers often don't have enough market power to leverage in negotiations with hospitals. This allows hospitals to have more bargaining power against these types of insurers, according to the researchers.

"Attention must also be given to the other payer market, where prices are highest. It will be challenging to address the excessively high prices for other payers by relying on market forces alone. Limiting the price for any commercial payer based on each hospital's negotiated price with [health maintenance organization and preferred provider organization] payers could be a promising policy option," the study concludes.

To view the full study, click here.

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