Hospitals With Strong Market Power Maintain Clout During Recession
Despite the recession and a decline in demand for health care services, hospitals with strong market clout continued to compete for well-insured patients and command rate increases from private insurers, according to a new study by the Center for Studying Health System Change, CQ HealthBeat reports.
The study examined hospitals every two to three years at 12 sites around the U.S., including Orange County, California. The other sites in the study were: Boston; Cleveland; Greenville, S.C.; Indianapolis; Lansing, Mich; Little Rock, Ark.; Miami; Northern New Jersey; Phoenix; Seattle; and Syracuse, N.Y.
The findings showed that hospitals experienced lower revenues and higher uncompensated care costs, as more patients failed to pay bills, shifted from private coverage to Medicaid, and avoided elective procedures.
However, many facilities avoided losses through various strategies, such as:
- Reducing select personnel;
- Lowering salaries and benefits;
- Increasing health premiums for workers;
- Improving productivity; and
- Postponing or reducing construction projects.
However, the report found that hospitals with strong market clout "typically maintained or increased negotiating leverage over private insurers."
Paul Ginsburg, president of the Center for Studying Health System Change, said, "Despite the sluggish economy, dominant hospitals and systems generally maintained strong bottom lines and many expanded beyond traditional geographic boundaries in their quest for well-insured patients" (Adams, CQ HealthBeat, 5/26).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.