Report: Michigan Hospital Costs, Consolidation Putting Pressure on Health Care Affordability
Blue Daily
| 2 min read
On April 9, Crain’s Detroit Business published comprehensive reporting on the impact of hospital prices and consolidation on health insurance affordability. If you’re a Crain’s subscriber, you can find the story by reporters Dustin Walsh and Mark Sanchez here.
The story, which points to hospital prices rising more than triple the rate of inflation, includes perspectives from Blue Cross Blue Shield of Michigan President and CEO Tricia Keith, health system leaders and representatives of companies that offer and purchase health insurance.
“Hospitals are the top of the list of costs impacting small, medium and large businesses,” said, Bret Jackson, CEO of the nonprofit Economic Alliance for Michigan. “I look at the numbers, the operating margins hospitals are posting are double-digit. I understand that hospitals want to be profitable, and I think they should be, but every other sector of the industry needs to be, too. They need to right-size themselves to be affordable.”
Hospital prices, along with prescription drug prices and the costs associated with physician care, comprise the vast majority of the health insurance dollar. In this era of hospital consolidation and expansion – driven by mergers among corporate health systems – competition is reduced, driving price pressures higher.
Blue Cross stands for partnering with health systems to design better payment systems that are not based on patient volume, but rather on the success of health systems in keeping their patient populations healthier and – you guessed it – out of the hospital. Our members and customers cannot afford double-digit price increases from hospitals. Blue Cross’ Blueprint for Affordability and Value Partnerships initiatives are changing how health care services are paid for – rewarding providers for achieving better patient outcomes. This has helped avoid $6.3 billion in unnecessary medical expenses that didn’t end up in the premiums our members pay for health insurance. Better population health requires fewer services. Fewer services means we are paying less – which will help make health insurance more affordable.
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