Hospitals get better insurer rates than docs

Tools

Hospitals and outpatient care centers have been more successful at bargaining for higher rates from employer-sponsored preferred provider organization (PPO) health plans than physicians so far this year, according to the 2012 Milliman Medical Index.

Analysts at Seattle-based Milliman Inc. examined the cost of inpatient hospitalization, outpatient care, professional services and pharmacy services, and concluded that some providers are seeing higher rates from PPOs than others, according to LifeHealthPro.

For instance, hospitals costs have gone up 7.6 percent since 2011, and outpatient care costs are up 8.6 percent, the analysts found. Physician costs, however, rose only 5 percent.

Moreover, the size of hospitals and services they provide also factor into negotiated rates with insurers. A study in this month's Health Affairs found that hospital systems are using their large size and market clout to demand hefty payment rates from insurers. The study also noted that hospitals offering specialized or unique services have increased market clout and can leverage higher prices, FierceHealthcare previously reported.

Meanwhile, to help patients choose lower-cost providers, insurers are using new tools to show the rates negotiated for hospitals and physicians, as well as the projected out-of-pock costs for patients based on their health plans, reported American Medical News.  

To learn more:
- here's the index (.pdf)
- read amednews article

Related Articles:
Hospitals complain of varying insurance payments
Bigger hospitals, mergers drive higher prices
Blue Shield claims hospitals joined forces to drive higher rates
Hospitals negotiate higher-than-competitive rates with insurers