This is the first of an occasional series of posts called “The Big Boys,” which will examine how the media are reporting on the healthcare system’s biggest players and how their business practices affect consumers—before and after they become patients. At the end of each post we suggest a story idea for further reporting.
As hospital systems across the country have grown bigger by gobbling up other hospitals and, more recently, physician practices, the media have been on the case. Several outlets have examined the healthcare ramifications of such consolidation, and taken a hard look at whether the economic trends are good for their communities. The Tampa Bay Times, The Charlotte Observer, the Raleigh News & Observer, and the Idaho Statesman all deserve a shout-out for their recent work.
These papers build on a piece we praised back in February by Margot Sanger-Katz in the National Journal, which explored hospital consolidation in Evanston, IL and in Boston. She concluded the industry is rapidly consolidating, and “the 2010 health care reform law is likely to make it much, much worse”—with consumers footing the bill. The newspapers reached the same conclusion and raised a larger question: Are these systems getting too big?
What a story the area’s hospital merger and acquisition activity has turned out to be! A few months ago, BayCare Hospital System declared war on insurance giant UnitedHealthcare, and has essentially held as hostages some 30,000 seniors who have bought United’s Medicare Advantage plans, in a contract dispute ongoing since last fall. The BayCare Health System, which dominates one-third of the Tampa region’s healthcare market and is still growing, took out a full-page ad in the Times, telling United’s policyholders they could not use any BayCare facilities except emergency rooms after November 26, while the insurer said it would honor claims through the end of last year.
Health editor Charlotte Sutton said some plans allow seniors to use BayCare hospitals, but they must pay out-of-network rates; she noted that some seniors have switched insurance carriers as a result of the dispute. BayCare said United owed it $11 million in unpaid claims, some going back four years, and argues that it needs higher reimbursement rates. BayCare had been seeking a 23 percent rate increase on policies United sold to employers, which would be paid by both employers and employees.
A United spokesperson said the increase was “unacceptable.” Paul Ginsburg, president of the Washington think tank Center for Studying Health System Change, told the Times: “I think that a lot of mergers are pursued to increase leverage with health plans—and no one is going to say that in public.” In Tampa the hospital’s actions said it all.
Last Friday night, the hospital system and the insurer finally reached a settlement. Neither side would disclose the terms of the agreement. In a phone interview with the paper, the hospital CEO, Steve Mason, refused to comment on the rate increase or any other financial deals. He cited confidentiality and competitive marketplace pressures.
In Charlotte and Raleigh
Before Christmas, the Charlotte Observer and the Raleigh News & Observer published, the results of a joint investigation: patients in North Carolina are likely to pay more for all kinds of medical services if the doc is an employee of a hospital.
Using Medicare and insurance claims, reporters Ames Alexander, Karen Garloch, and David Raynor exposed some unsavory consequences that have resulted from the actions of Charlotte’s two hospital systems, Novant Health and Carolinas HealthCare System, which are buying doctors’ shops and sometimes charging double what the docs would have charged had they not teamed up with the hospitals. Why the increase?
Medicare allows hospitals to collect more from patients than doctors can collect. Hospital officials claim they have expenses that physicians don’t have, must comply with pesky regulations, and have to treat everyone even if they cannot pay. Add to that, they have more muscle to squeeze insurers—as the Tampa paper has shown. Patients find themselves paying a lot more for care. One North Carolina woman who had been paying a $60 copayment for periodic echocardiograms ended up owing $952 for the usual test performed by the usual technician.