Health Plans Don't Always Play Hardball with Providers
4.Bluffing doesn't work.
If an insurer doesn't have a reasonable threat of excluding a hospital from a network, then it loses a lot of negotiating leverage. In that case, Berenson says the only hospitals an insurer can legitimately threaten are facilities that don't see a lot of the insurer's members.
5.Employers often look the other way in insurer-hospital confrontations.
Berenson says Boston is a perfect example of this phenomenon. Employers may complain about their healthcare costs, but when Tufts Health Plan tried to take on the powerful Partners, employers balked at the possibility of not having the healthcare system in their networks. "You don't do business in Boston if you're a health plan without Partners. So what's the threat against Partners? It's a must have for employers."
In the end, Berenson says negotiating leverage between insurers and hospitals is a more nuanced process than previously considered. It makes you wonder if public policy focused on health plan rates increases is really getting to the root of the problem. Berenson and his team conclude that "a range of other market and regulatory approaches also need to be examined."
Margaret Dick Tocknell is a reporter/editor with HealthLeaders Media.
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