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Cost-Shifting Blamed for Commercial Insurance Cost Growth

John Commins, for HealthLeaders Media, November 18, 2011

The annual growth rates are determined by calculating a percent change of the 12-month moving averages of the monthly index levels versus the same month of the prior year.

Blitzer says it would not be wise to use the cost growth trends identified in the S&P report as an argument for a wider single-payer system. "Mandating lower rates in the short term may look wonderful, but you may wake up some day and discover you don't have enough doctors, or doctors will only do the procedures that only have high-profit margins," he says. "They're not stupid, otherwise they wouldn't be doctors."

Cost-shifting in healthcare will happen as long as providers are required to offer the same services to two groups of patients at substantially different prices, Blitzer says. "Some people suggest it is evil or they are cooking the books. I don't think that is fair. You have fixed costs from running a medical practice or a hospital, and at the end of the year you total the revenues, you subtract the fixed costs, you subtract the variable costs which can be attributed patient by patient, and you hope the number that is left is a positive number."


John Commins is a senior editor with HealthLeaders Media.

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