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Jackson Health System lowers prices to HMOs

Miami Herald, July 28, 2011

Jackson Health System is lowering its rates for private insurers in an attempt to bring in more paying customers to its financially struggling public hospitals. CEO Carlos Migoya told The Miami Herald editorial board on Wednesday that he knows that Jackson's rates to private payers are now too high. "Do you want to go to Jackson and pay 25% more, or go to Baptist and pay 25% less?" Insurers know the answer. "They'll send you to Baptist." Jackson's problem in the past is that it has based contracts with insurers on "fully allocated costs," including all the money it loses on uninsured patients, Migoya said. That often makes it uncompetitive with other hospitals. Instead, he is now looking for contracts in which are based only on incremental costs – the costs of nurses and supplies for that particular patient walking in the door.