COLUMBIA: Strong-Arms Humana In FL Hospital Contract
In a move that "may just be brinkmanship," Columbia/HCA Healthcare Corp. has threatened to not renew its Florida hospital contract with Humana Inc.. If Columbia makes good on the threat, Humana's 500,000 Florida members "would no longer be able to use Columbia's 50 hospitals across the state, effective in April." Humana spokesperson Greg Donaldson said the impasse stems from Columbia's request for "outrageous" rate increases. He said, "We have a moral and financial obligation to our members to keep health care as affordable as possible. And their rate requests are exorbitant." He downplayed the possible effects that a Columbia pullout would have on Humana members, noting, "Our network includes nearly every hospital in the state and, except in one or two isolated places, our members will have other options. We're also finding that Columbia hospitals may not even be the hospitals of choice for many of our members."
Keep It Local
Columbia spokesperson Jeff Prescott said while rates are certainly an issue, "the company's main goal is to change the structure of the Humana contract," which was "negotiated at a statewide, rather than local or regional, level." He said the contract was negotiated in 1993 and "quite frankly, it had very favorable terms for Humana. It doesn't make sense to have a statewide contract when things differ so much from market to market." Allan Baumgarten, a consultant who recently issued a study on the managed care market in Florida, said, "You've got people crunching numbers on both ends of this and calculating what they've got to gain and lose. They're flexing their muscles and pushing each other to see how far they'll go." Pretty far, apparently: Earlier this month, HIP Health Plans of Florida and United HealthCare canceled their contracts with three and five Columbia hospitals, respectively (Hundley, St. Petersburg Times, 12/17).