Moral high ground murky in Mission vs. Blue Cross
Mission will quit accepting
If not, an immediate side-effect would be an uptick in patients for
Due to their respective customer bases, both parties presumably have significant leverage.
The conundrum gets even more complex though. Mission is the only trauma center in the region, while
With their own de facto monopoly status in these areas, tens of thousands of patients have no choice but to hold on and see how the fight plays out.
While both sides appear to have drawn a line in the sand, a compromise is nearly always reached based on past disputes. In 2015,
Mission and
"Contracts with health insurance companies greatly impact a health system's long-term financial and operational sustainability,"
Hospital margins are already squeezed by reimbursement rates of Medicaid and Medicare, which don't cover the true cost of services.
"A hospital is not clearing what it costs them to provide the care or services," said
Hospitals also lose money caring for the uninsured. While the number of uninsured has gone down recently, there's a growing number of patients with high-deductible plans who can't afford their co-pays and high deductibles, which then have to be written off.
"Charity care has gone down but bad debt has gone up," Henry explained.
Hospitals have to recoup all these losses from the remaining patient base -- namely those with private insurance.
"Hospitals for a long time have relied on private insurers to make up for these losses," Henry explained.
Known as cost shifting, it's critical for Mission to get every dime it can from private insurers to offset its operating losses on other patients. It's one reason Mission might be willing to go the distance.
Mission's payer mix is less favorable than most hospitals in the state, with only 25 percent of its patient base on private insurance plans. The small margin makes the reimbursement rate it gets from private insurance companies all the more critical.
"It's simply impossible to keep up with rising medical supply, pharmaceutical, and other operating costs, let alone provide future wage increases to our fantastic team members without appropriate annual adjustments to our payment rates from BCBSNC in the coming years," Mission Health CFO
BlueCross contends that
"The health system has chosen to become the only system in
The negotiation period between
There are 115 hospitals in
"More than 43 other hospitals across the state have agreed to work with us to slow down unsustainable cost increases," said
Reimbursement rates are not the same across all hospitals or all insurance companies. In fact, Mission already enjoys some of the highest reimbursement rates paid by
"Blue Cross NC customers already pay more for care at
Henry said it important to society to protect the financial viability of hospitals.
"We consider hospitals economic anchors in the community. When they make a profit, they reinvest it in the community. When an insurance company makes a profit, how is that getting reinvested in the local community?" Henry asked.
"Rising medical costs are one of the most urgent issues facing
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