Hospitals Buy Health Insurers, At What Cost to Patients?

June 30, 2014 | Crandall & Pera Law
Hospitals Buy Health Insurers, At What Cost to Patients?

As the trend of hospital systems buying health insurance companies continues, reports show that patients may not be receiving the benefits they are promised, according to The New York Times.

The St. Louis-based Ascension Health, the country's largest nonprofit hospital system, is currently in talks to acquire an unnamed insurance company that operates in 18 states. These historical adversaries are now getting cozy to better design incentives for higher-quality care and cut costs, putting competitors at a disadvantage or driving them out.

A joint provider-insurer may also be better able to adapt to - and make more money from - new Medicare payment models in the Affordable Care Act.

But with less competition, an organization would be in a good position to raise premiums, which is why health economists and antitrust regulators are watching these market dynamics with a concerned eye.

A study published in the journal Health Services Research last year found that insurance plans offered by hospitals not only charge higher premiums, but show no increase in quality due to these premiums. No evidence was found to associate integration with more generous health plan benefits. Read the full details here:

When Hospital Systems Buy Health Insurers

A new trend is developing that bears closer watch: hospital systems buying the very health insurance carriers who provide payment to them for patient care. Is this smart business or consolidation of two areas that may result in worse care and less coverage for patients? Only time and close inspection will help answer that.

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