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Contrarian CEO: Consolidation Will Hike Spending

Philip Betbeze, for HealthLeaders Media, August 23, 2013

On a macro scale, healthcare's already squeezing out other competing priorities that we all must pay for, in one way or another, such as food, shelter, defense, education, and other spending priorities.

For instance, this CEO contends, insurers, at least in his market, aren't really that interested in lowering the cost of healthcare because they've been content to pass higher costs onto their clients: large employers, and increasingly, patients themselves.

Hospitals and health systems are precluded, through contractual “gag” orders, from disclosing what they are paid by commercial insurers for a variety of procedures. Not that most of them would be willing to disclose their reimbursement even if they weren't contractually prohibited, he claims, because the biggest and most comprehensive are getting sweetheart deals because of their negotiating clout.

As head of a major employer himself, this CEO finds this particular prohibition unfair and contends it inhibits his ability to offer his employees fair wages and benefits, never mind the cost to our nation as a whole. As competition recedes, prices go up. And healthcare consolidation is no different than any other industry consolidation. The consumer pays.

He's not sitting still for it. In fact, he's working on a dramatic way to shine the light on insurer negotiations with health systems and the results they bring.

From an economic standpoint, the transparency in pricing for employers and employees and insurers is in the crosshairs of affordability in healthcare, he told me..

Makes sense to me. We have the Patient Protection and Affordable Care Act, like it or not. If anything, the cost of healthcare will likely continue to rise as the PPACA is implemented, and many on both sides of the debate on federal healthcare reform have long derided the “affordable” claim in the Affordable Care Act.

Truly affordable care requires transparency. Despite the ACA, there's still precious little of it in healthcare now. Where are the lawmakers when you really need them?


Philip Betbeze is senior leadership editor with HealthLeaders Media.
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1 comments on "Contrarian CEO: Consolidation Will Hike Spending"


Todd (8/25/2013 at 10:27 PM)
Where are the lawmakers? They're getting lobbied by the AHA who continue working to suppress quality information. Consumers and employers are continually left unable to compare costs and quality.