• Nixon Benefits

THE VALUE OF HEALTH INSURANCE NETWORKS IN QUESTION




Developed by health insurers decades ago to attract customers, networks promise discounted pricing for care received from doctors and hospitals. Initially, hospitals and doctors reduced the fees they had previously charged. Each health insurer has different and separate pricing arrangements with each medical group, each hospital, and each independent doctor. These arrangements are usually repriced every 2-3 years. Over many decades of repricing, the actual value of networks is now in question. Doctors and hospitals continue to ask health insurers for more money, while health insurers simply need to show a delta from that number. The results: price inflation and costly administrative burden on providers.

Unintended Consequence: The private sector (via insurance arrangements) now pays our hospital systems significantly more for services than the public sector (Medicare and Medicaid reimbursements). Our hospital systems are now financially dependent upon the private sector’s insurance arrangements, making a public sector single-payer funding method (state or federal) no longer a financially feasible option for the U.S.


#heathcare #hospitals #healthinsurance #networks