High Healthcare Costs Continue to Provoke Finger Pointing

Jeff Elliott, for HealthLeaders Media , February 9, 2011

Of course, health plans were eager to defend their territory. "Competition is vigorous among health plans across the country," America's Health Insurance Plans (AHIP) Press Secretary Robert Zirkelbach told HealthLeaders. "They operate in highly competitive markets in which consumers have numerous choices among plan types and insurers."

While stopping short of calling the report erroneous, AHIP pointed out that a former Department of Justice staff economist who analyzed last year's study concluded that AMA's accuracy and reliability could be called into question. "For example, the AMA data exclude some types of self-funded plans, a large and growing portion of the market, and show significantly higher market concentration than data available from NAIC," according to Zirkelbach.

He went one step further stating that in many markets, provider consolidation is a significant factor contributing to rising healthcare costs, citing research indicating that states often cited as examples of high market concentration actually have some of the lowest premiums in the nation.

As an industry observer, I'm left scratching my head as to who's story to believe. Turns out they're both right. Buried deeper in AMA's research about the lack of insurer competition is the fact that small physician practices are really the ones bearing the scars from contract negotiations. But considering the constant downward pressure on Medicare reimbursements, it's a bit unfair to health plans as the ultimate unruly enforcer.

That still doesn't answer the question of who's responsible for painfully high healthcare costs. Judging by what each side has to say, perhaps both should share the blame along with John Q. Public who doesn't take nearly as good enough care of himself as he should.

Comments are moderated. Please be patient.

9 comments on "High Healthcare Costs Continue to Provoke Finger Pointing"

William Mandell (3/5/2011 at 4:02 PM)
Just would like to make the distinction in pricing is what the article is really about. What things cost can be much different. The actual cost of providing care is much different than what is paid. Medicare pays much less and sometimes healthplans pay much more.

Robert Trinka (2/14/2011 at 11:04 AM)
Healthcare is the only industry in which the people who design and deliver the product/service are not responsible for the cost of the product/service. Insurance companies are financing vehicles - physicians primarily, hospitals and other providers of services are accountable for the product/service's quality and cost. Insurers and other payers including the federal government resort to reimbursement limitations and contracts only because physicians and hospitals have shirked their fundamental duty. The challenge for the healthcare system is to produce products and services that their customers/patients can afford. Then we will see real competition, real productivity improvement and real cost reduction.

R Daniel King (2/13/2011 at 10:14 AM)
The federal government has for decades mandated that a [INVALID] 2 million patient/residents are daily subjected to (1) increased consumer education and awareness, (2) prevention and wellness programs and (3) consumer-controlled comprehensive health record that facilitates monitoring, measurement and management as suggested in a following comment. All these so-called silver bullets self-interest supposedly do not want in place for the general population has been carried on in skilled nursing facilties in every state. Yet because few SNFs are efficient, quality driven facilities most of these mandated efforts fail at various degrees increasing preventable hospitalizations, medications, death, and chronic problems. To assume what has failed under the second most federally regulated environment for a population of 2 million patient/residents under minute to minute monitoring can achieve a 30% savings for the total US population is a millennium away from reality. It is easier and quicker to change the health care deliverys system's culture than the hundred of thousands of cultural difference through out American cities and towns that can lead to medical problems. Not until the health care industry has the courage to realize the barrier to the most efficient delivery of quality, universal, integrated care is the status quo will win/win/win change ever take place.




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