Taking a stand against provider consolidation
I'm rarely one to advocate for fighting instead of finding peace, but every now and then, you just have to stand up for what you think is right. And that's how I view the recent decision from Blue Cross Blue Shield of Illinois to not negotiate with hospitals that affiliate with each other.
There's been an increased uptick in hospital affiliations as well as mergers and acquisitions across the country. America's Health Insurance Plans and individual insurers like Blue Cross have been pushing back against consolidation, saying the trend jeopardizes insurers' attempts to move toward a value-based reimbursement system.
As the dominant insurer in Illinois, Blue Cross is well positioned to take a stand against what it believes to be an attempt to force higher reimbursement payments. Given that Advocate Health Care and NorthShore University HealthSystem are planning a merger to create a 16-hospital, $6.8 billion system, the providers would have been in a strong position to force Blue Cross into higher payments.
I recognize the right of providers to work together and address the problem of ever-rising healthcare costs. And I certainly don't think that provider consolidation is the only driver to those increasing costs. Insurers have their share of blame, as well.
But I do disagree with providers trying to form bigger and bigger health systems in order to keep reimbursement rates high. Even if that's not the intended end result of a merger, acquisition or affiliation, providers must know that it's an eventuality in most cases.
That's why I was pleased when I saw Blue Cross push back against the consolidation trend. By stopping the negotiations before they even start, Blue Cross is clearly communicating that it means business. And Advocate CEO even admitted that the Blue Cross decision could have a "chilling effect" in the market.
However, I want to add one important caveat to my delight--Blue Cross shouldn't simply walk away from all conversations and negotiations with Advocate and other affiliating providers. It should offer a different solution to the problem. Otherwise, it's just fueling the animosity that already exists between many payers and providers.
So, really, I'm advocating for Blue Cross to temporarily stand up for its rights and then work toward finding peace. Providers can't keep merging in hopes of creating conglomerates that are just as big and dominating as many insurers. They will lose their connection and engagement with patients. And insurers can't just refuse to talk to providers. They will miss opportunities to cover quality care for their members.
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Insurers fight provider consolidation
Illinois Blues refusal to negotiate with affiliated health systems could have 'chilling effect'