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Earnings reports from insurers, hospitals send conflicting messages


The earnings reports from insurers and hospitals for the second quarter of this year have conflicting messages--hospitals are seeing a growth in volume while insurers are seeing a slower cost trend.

Aetna, WellPoint and UnitedHealth all said costs are under control and the trends are moderate. And Cigna even lowered its cost outlook, believing the increase this year will be between 4.5 percent and 5.5 percent, reported Kaiser Health News.

Meanwhile, hospitals' earnings reports are telling a different story as several hospital organizations have said that an increase in spending is due to higher utilization rates. Hospital chain HCA Holdings, for example, reported that its admissions increased, despite declining during the previous two quarters. And Tenet Healthcare saw its highest admissions covered by private insurance in six years.

These conflicting messages are the result of what insurers and hospitals focus on in their earnings reports. Insurers emphasize per capita rather than total costs, Ana Gupte, who follows insurers for Leerink Partners, told KHN.

That means insurers who say they saw moderate expense increases are referring to moderate costs per member, despite potentially having more members than they did a year ago. It's that same increase in membership that's causing hospitals to see rising admission rates, Gupte added.

What's more, this year's second quarter rise in healthcare utilization is partly due to pent-up demand from people who were previously uninsured. Consumers who bought plans through the health insurance exchanges say they have worse health than those who bought off the marketplaces, FierceHealthPayer previously reported. However, healthcare analysts predict the increased utilization won't likely continue much longer.

To learn more:
- read the Kaiser Health News article

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