Stanley Feld M.D.,FACP,MACE
United Healthcare and HCA settled their contract negotiations for the 850,000 patients in the Denver area. The contract is a long term contract lasting until 2011. Additionally, HCA reached a long contract settlement with United Healthcare throughout the country. None of the terms of the contract were transparent nor can we expect a reduction in insurance costs.
We have discussed the outrageous salaries of the United Healthcare Company's executives under previous contracts as they continue to raise insurance rates. We have also discussed the leveraged buyout by KKR and partners.
United Healthcare decided, rather than playing a role in changing the paradigm of the structure of healthcare insurance by promoting price transparency and Medical Savings Accounts, it would be prudent for them to remained in total control of the potential patients’ medical care and their healthcare dollars.
The Denver Post reported “Some United members sought care at hospitals outside the HCA-HealthOne network, leaving hospital beds unfilled.”
The unaddressed point was how many hospital beds were left unfilled? How much money was lost by HCA in the last few months of the dispute? The contract dispute permitted patients to choose because their own money is involved.
“United had faced the possibility of losing corporate and individual policy-holders to other insurers during the open-enrollment season."
United Healthcare rather being innovative, probably concluded that it was “too dangerous” and costly to lead the way toward insurance reform.
“More and more insurers and hospitals are looking to sign longer-term deals, given that the insurance premiums they can charge are increasing at relatively modest, single-digit rates.”
I think hospitals and insurers decided that the enemy to their outrageous profits is the major stakeholders, the patients and the physicians and not each other. I suspect United will offer employers long term contracts in order to keep patients in the ossified healthcare system that has lead to uncontrolled costs, excessive waste, and the vast number of uninsured.
"It's a case of two very large health- care companies that truly needed each other," said Paul Newsome, a financial analyst with A.G. Edwards in St. Louis. "It works both ways."
“HCA-HealthOne saw an immediate loss of business after it terminated its contract with United Sept. 1, said Jim Hertel, publisher of the Colorado Managed Care newsletter.”
"I don't think that United was being impacted to the extent that HCA was," said Hertel. "I would think the settlement was closer to United's requirements than to HCA's based on the timing."
“United had claimed that HCA-HealthOne demanded a 35 percent reimbursement rate increase over four years in Colorado. HCA-HealthOne countered that its requested increase would translate into a 1.6 percent premium increase per year for employers and individuals.”
Neither side disclosed terms of the local or national deal.
So there you have it. It is the same old, same old.
If anyone thinks the insurance industry is going to fix the system you are wrong!
If anyone thinks the hospital industry is going to fix the system you are wrong again!
I do not see any government or state officials standing up to help. I do not see organized medicine capable of fixing the system.
It is going to be up to the patients to fix the system. The doctors will follow the patients, not the hospital or the insurance company as we saw in this HCA/United Healthcare episode. Once the patients demand change, the hospitals and insurance companies will change.
Leadership for change is what is needed now! It is going to take a bright innovative company with the knowledge and capability to use information technology techniques for the benefit of the patients and the physicians to create a paradigm shift. We must remember without patients or physicians there is no need for a healthcare industry.