Behind the Push to Invest in Hospitals
Specifically, IBISWorld points to the recent (September) start date for a rule that requires states to scrutinize health insurance rate increases of 10.0% or more for policies sold to individuals and small businesses as part of the regulations for state-level health insurance exchanges, mandated by the Patient Protection and Affordable Care Act.
What their argument boils down to is this: Cross-subsidization will carry the weight. Yes, the ability of hospitals and health systems, among other medical sector groups, to leverage strong revenue gains depends on a method of gaining higher payments from private insurers to subsidize inadequate government payers. Many, many people have predicted the demise of cross-subsidization, targeting it as a big reason for decades of ridiculously large healthcare cost increases. Let that sink in for a moment.
Not to overstate things, but IBISWorld put some serious work, and their reputation, on the line with this prediction. These are the sectors it identifies and their potential revenue gains from private insurance over the next five years:
"Several healthcare industries rely heavily on payments from private health insurance. Since much of the healthcare reform legislation is still being debated, the move to issue rules is at least one indication that these industries will ultimately gain from the legislation in regard to having a broader and more stable customer base.
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