Some major systems forbid insurers to sell any plan excluding the hospital from the network. They could also require insurers to design plans that discourage enrollees' use of less expensive providers.
Senate Judiciary Chair Charles Grassley, R-Iowa, has asked the Federal Trade Commission to look into contracts between major health systems and insurers to see whether they might be anticompetitive.
According to Modern Healthcare, Grassley wants the FTC to see whether such contracts are playing a role in the rise of health care costs. Grassley cited a September article from the Wall Street Journal that mentioned “hidden financial arrangements between hospital systems and insurers that included limitations on coverage offered by the plans to their enrollees, which in turn would save the hospitals money.”
The country's top 15
health systems, and what
they have in common
Among the systems mentioned in the article were Johns Hopkins Medicine in Maryland, OhioHealth system and Aurora Health Care in Milwaukee.In Grassley's request to the FTC, he asked FTC Chair Joseph Simons for the agency's evaluation on whether hidden inter-industry connections are making rising health care costs worse. The report says that in 2016, healthcare accounted for nearly a fifth of U.S. GDP—approximately $3.3 trillion.Grassley wrote, “Spending is projected to grow at an average rate of 5.5 percent per year and reach $5.7 trillion by 2026. The last thing American patients and consumers need at this time is a healthcare system that permits or encourages anticompetitive agreements that hinder access to lower-cost care.”
Some major systems forbid insurers to sell any plan excluding the hospital from the network. They could also require insurers to design plans that discourage enrollees' use of less expensive providers.
“Other terms allow hospitals to mask prices from consumers, limit audits of claims, add extra fees and block efforts to exclude healthcare providers based on quality or cost,” the article says.
In August, according to Modern Healthcare, an investigation was launched on hospital consolidation by House Republican leaders of the Energy & Commerce Committee. In addition, congressional Medicare advisors were asked to analyze federal policies to see if those policies are hastening hospital consolidations—and if consolidations are contributing to the rise in health care costs.
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Marlene Satter
Marlene Y. Satter has worked in and written about the financial industry for decades.
