But so what? Of course it takes money to invest in employing physicians, expanding your business footprint outside the traditional hospital-centric healthcare model, and in obtaining the most advanced clinical equipment and services.
And of course, in the largely market-based economy that has been commercial insurance rate negotiation, hospitals and health systems can't be faulted, barring any antitrust enforcement, from driving the hardest bargain they can from the private market.
Just don't get too used to being able to do that, Kaufman cautions. High commercial rates fund innovation, successful employment of a large group of physicians, development of a high-functioning clinically integrated network, and the ability to become nationally recognized for excellence.
But a rude awakening awaits when rate regulation and tiering become more prominent, as he expects.