COMMERCIAL INSURERS DOUBLE DOWN ON HOSPITAL ATTACKS

The following information was released by the California Hospital Association (CHA):

Carmela Coyle

President and CEO, California Hospital Association

It'sbeen a little more than fourmonths sincecommercial insurance company executives weresummoned to Capitol Hill for acongressionalhearingin whichthey were probed oncare denials,profit-taking,consumer affordability, and more.

The response from Big Insurance: Continue to go on the attack and point fingers at providers, like hospitals and pharmaceutical companies, through barely-concealed front groups with focus group-tested names like "Better Solutions for Healthcare," the "Affordable Health Care Initiative," and "Hospital Watch."

Thesewebsites, the ads they are paying for, and the messages they are delivering are filled with half-truths at best.But to a public frustrated with a growing national affordability crisis, andtopoliticians who want to be responsive to theirconstituents'needs, truthdoesn'tseem tomatter as much as action.

Whileit'sregrettable thatthese commercial insurance companiesare choosing todouble downand spend bigtodeflectattention fromtheir profits and responsibilities, hospitals are fighting back.

American Hospital Association President and CEO Rick Pollack recently called out thehypocrisy of the commercial insurance industry."It's no surprise that large commercial insurers are trying to shift attention away from their own abysmal record," he said. And thehospital-backed Coalition to Strengthen America's Healthcare, supported by CHA,is running ads hitting insurers for"putting your health care on hold"with delays and denials.

At the state level, CHA is supporting several bills to hold commercial insurers accountable. Senate Bill (SB) 1037 (Weber Pierson, D-San Diego) would require the state to conduct an enhanced rate review that includes the annual change in health care insurance premiums to determine if they are affordable for individual and group purchasers. Another, Assembly Bill 1970 (Harabedian, D-Pasadena), would prohibit health plans and insurers from requiring step therapy protocols for medications used to treat a serious mental illness or substance use disorder. A third, SB 964 (Smallwood-Cuevas, D-Los Angeles), would reduce prior authorization barriers for medications.

This all makes fora critical moment in health care. If the response tothe public'sdesire for more affordable health care is based on lies or half-truths disseminated by a commercial insurance industry that rakes in tens of billions of dollars in profits every year, then it will be communities and patients that suffer as health care providers get squeezed.

Politicians should not be fooled by theseslick,well-funded campaigns.

Here'sthe truth.When it comes to hospitals, theyareindeedthe most expensivehealthcare setting. And with good reason: They are open 24 hours a day,365 daysa year;theycare fora growing number ofpeople with the most complex illnesses and injuries(car crashes, heart attacks, strokes, cancer, and so much more); they provide strong, high-payingjobs (even when adjusted for cost of living, Californianurses are the highest paid in the country $150,000 per year and34%morethan the national average).

In fact, hospitals have little-to-no control over their expenses, with prices for 53% of their costs dictated by the local labor market, and with entities outside the hospital directly controlling the price for the remaining 47%. Hospital spending is composed of:

53% Labor costs

15% Supplies (pharmaceuticals, medical equipment, gowns, gloves, bandages)

19% Purchased services (electronic health records, food, laundry services, and building repairs)

13% Other expenses (leases, financing costs,insurance costs, etc.)

Still,hospitals are doing their part to keep costs in check. Adjusting for California'shigh costof living, the state has the 10th lowest per capita hospital expenditures in the nationefficient carethatcomes despite hospitals facing serious financial challenges, withdozensat risk of closure and more than40% ofall hospitalsoperatingin the red.

Few dispute that the nation's health care system needs toevolveso itworksbetter forpatients and families, and hospitals stand ready to do their part.It'sjust too bad that commercial insurance companies would ratherplay a tired blame game than cooperate on actual solutions.